The first-quarter earnings of Microsoft affected by the deterioration of the demand of computer market | Biden News


Microsoft announced its financial results for the quarter ended September 30, 2022, the first quarter of its new financial year. The tech giant’s earnings were hit by a deterioration in PC market demand, affecting its Windows OEM and Surface businesses.

The net income of the manufacturer of Windows in the fourth year was $ 17.6 billion, less than 14% compared to the corresponding period of the last fiscal year. Its first-quarter revenue was $50.1 billion, up 11% year over year.

The tech company noted that its Windows OEM business revenue, including its Windows operating system, fell 15% with continued deterioration in the PC market. It is in line with a recent Gartner report, which stated that global PC shipments fell 19.5% in the third quarter of 2022, the steepest decline in more than two decades.

“Despite the drop in PC shipments during the quarter, Windows continues to see usage growth,” Microsoft CEO Satya Nadella said during the company’s Q1 earnings call. He added that there are nearly 20% more monthly active Windows devices than pre-pandemic.

While the revenue of Microsoft’s “More Personal Computing” segment fell due to a decline in Windows, its cloud business, Azure, as highlighted by the company, was a main driver of its first quarter earnings. Microsoft cloud revenue in the quarter touched $25.7 billion, up 24% year over year.

“We continue to see healthy demand across our business businesses, including another quarter of solid bookings as we deliver compelling value for customers,” said Amy Hood, CFO of Microsoft.

The software company’s revenue from Office business products and cloud services increased 7%, driven by Office 365 Business revenue growth of 11%. Its Office consumer products and cloud services revenue increased 7% as Microsoft 365 Consumer subscribers grew to 61.3 million.

LinkedIn’s revenue rose 17% from the company’s business and recruiting-oriented online service, ahead of expectations driven by better-than-expected talent solutions growth, Hood said.

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For Microsoft, gaming is one of its main focus areas and it has made significant progress in this area in recent years, including the launch of its next-generation consoles, cloud gaming, and its proposed acquisition of “Call of Duty” for $68.7 billion. . ‘maker Activision Blizzard, which it expects to close by the end of the fiscal year, according to Hood. It would be the biggest ever and Microsoft’s largest game industry deal.

The company’s Xbox hardware revenue grew 13%. However, revenue from Xbox content and services fell 3% in its first quarter.

“We are adding new players to our ecosystem, as we fulfill our ambition to reach players wherever and whenever they want, on any device,” Nadella said. “We saw usage growth across all platforms, driven by console strength. PC Game Pass subscriptions were up 159% year over year.”


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