Zhi DongXi (public number: zhidxcom)
Author | Li Shuiqing
Edit | Heart edge
Today, Microsoft announced its financial results for the third quarter of fiscal 2022 (ending March 31), with revenue of $49.4 billion, up 18% year-on-year, and net profit of $16.7 billion, up 8% year-on-year.
Microsoft attributed much of the quarter's growth to cloud-related businesses. Its Servers and Cloud Services segment saw revenue growth of 29 percent, while Microsoft Cloud grew 32 percent, totaling $23.4 billion.
Despite the good results in the third quarter, Microsoft still fell 3.82% in after-hours trading.
Revenue increased by 18%, and server and cloud services revenue increased by $17 billion
In the third quarter of fiscal 2022, Microsoft achieved steady growth. Its revenue for the current period increased by 18% year-on-year to $49.4 billion and net income of $16.7 billion, an increase of 8% year-on-year. However, compared with the previous quarters, Microsoft's revenue and net profit have declined.
In the quarter, in Microsoft's various business segments, the largest proportion of revenue was server and cloud services, office software Office and cloud services, and Windows operating system, with the amounts of $17.038 billion, $11.164 billion and $6.077 billion, accounting for 34%, 23% and 12% of the total revenue, respectively.
In the next quarter, Microsoft expects its performance to continue to grow. However, the war in Ukraine could affect its revenue by about $110 million; in addition, production shutdowns in China could affect hardware shipments such as Windows, Surface series laptops and Xbox game consoles.
Second, the smart cloud revenue reached $19.1 billion, and office 365 users increased by 2 million
Microsoft's large Office and cloud businesses achieved better growth in the third quarter of fiscal 2022.
Revenue in the Productivity & Business Processes segment increased 17 percent, with the Office Commercial segment up 12 percent and the Office Consumer business up 11 percent. Office 365 now has 58.4 million consumers, up 2 million from the previous quarter and 8 million from the same period last year. "Smart Cloud" revenue increased 26% overall to $19.1 billion.
The recruitment platform LinkedIn (LinkedIn) continues to maintain considerable growth, growing 34% in the current quarter after growing 37%, 42% and 46% respectively in the first three quarters.
Microsoft's Surface devices grew a further 13 percent this quarter after an unexpected 8 percent increase in revenue in the previous quarter. 2022 is the 10th anniversary of the advent of Microsoft Surface, and foreign media estimate that the company will have more new products in addition to the bland Surface Laptop SE and a conference call camera.
Windows and Xbox grew 11 percent, and Blizzard acquisitions were not included in the earnings report
Although the demand for PCs has begun to decline from the high point of the epidemic, from the perspective of Microsoft's business fundamentals, the decline is mainly due to the sales of Chromebooks, a network notebook equipped with Google ChromeOS, rather than the use of Microsoft Windows machines, which are the main profit points of its PCs.
Meanwhile, Xbox just hit its best sales in 11 years, easily beating out Sony's relatively tight-supply PS5 console.
According to Microsoft's earnings report, its "more personalized computing" businesses, including Windows and Xbox, grew 11 percent in the third quarter to $14.5 billion.
Among them, Windows OEM (original equipment manufacturer) revenue also rose by 11%. "Enterprises are adopting Windows 11 faster than any other version." Microsoft CEO Satya Nadella spoke on an earnings call.
Meanwhile, Microsoft Xbox hardware revenue grew 14 percent in the quarter, with Xbox content and services revenue up 4 percent.
Driven by xbox game pass subscriptions and first-party game growth, Microsoft's game revenue grew 6 percent overall to $3.74 billion. Nadella said at the earnings conference that 10 million people are now experiencing streaming games from Microsoft's cloud. Nadella said Xbox Game Pass users also increased their playtime by 45 percent over the past 12 months, totaling "billions of hours" throughout the year.
Last quarter, Microsoft reported the acquisition of U.S. gamemaker Activision Blizzard, which would make Microsoft "the third-largest game company after Tencent and Sony," but the deal didn't make it into those gains — a deal that could not be completed until next year.
Amy Hood, Microsoft's chief financial officer, said game revenue should actually decline because "engagement time is decreasing year by year and console supply is limited."
Conclusion: Steady growth, the cloud business has become Microsoft's main driver
Technology giant Microsoft still maintains steady growth, of which the growth of cloud business, Windows, games and other sectors is particularly obvious, with an important pulling effect. Some sectors, although the proportion of growth is not large, are still stable.
In the next quarter, according to Microsoft's expectations, although its performance may fluctuate due to the Russian-Ukrainian war, the suspension of production of some parts and components, etc., the overall expectation is still optimistic.