Microsoft profits soar 48% in last quarter due to Xbox, Office and the cloud


Microsoft

Microsoft has published a report on financial results for the first quarter of fiscal 2022. The company’s revenue grew 22% year-on-year to $ 45.2 billion, while profit increased 48% to $ 20.5 billion under GAAP. The strong performance was achieved in the cloud and server segments, with Microsoft Office becoming another important source of revenue.

Most recently, Microsoft released Windows 11, but a few months earlier, US PC sales had begun to decline due to supply issues. However, this fact did not affect Microsoft’s income from Windows. Windows OEM revenue grew 10% over the past quarter. Microsoft and its OEM partners have high hopes for Windows 11 – the new system should boost demand for laptops and desktops if supply problems don’t worsen. Company CEO Satya Nadella said: “PCs will be more important than ever. Due to the pandemic, there has been a structural shift in PC demand. ” Therefore, in the second quarter of fiscal 2022, Microsoft expects revenue growth from Windows.

In the Surface segment, the current products are the Surface Laptop 4 and the Surface Pro 7 Plus tablet – here revenues have decreased by 17%, and, Microsoft is sure, this is due to the higher performance last year as a whole. It doesn’t look like Surface’s revenue will increase in the next quarter either. Microsoft CFO Amy Hood warned that revenues in the second quarter are expected to fall within 10%. This is probably due to problems with the supply of chips and other components.

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Microsoft profits soar 48% in last quarter due to Xbox, Office and the cloud

In the consoles segment, however, the results continue to impress, with revenues growing 166% thanks to consistently strong demand for Xbox Series X and Series S. As stated by Ms. Hood, the company “was able to ship more Xbox Series X and S consoles than expected, although demand continues exceed the offer”. The head of Microsoft’s Xbox division has already warned that the deficit will remain at least until the end of this year. The company’s total gaming revenue grew 16% to $ 3.6 billion, a record for the Xbox division. At the same time, income from Xbox content and services increased by only 2%. The company did not give the exact number of Xbox Game Pass subscribers this time (as of January 2021 there were 18 million of them), but here Microsoft still recorded some growth.

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Traditionally, strong results are observed in the cloud segment – here the total revenue increased by 31% compared to last year. The quarter was also successful for Office: revenue from consumer products and Office cloud services grew by 10%; and the number of Microsoft 365 subscribers increased by 19% to 54.1 million. Business versions and cloud services of Office also provided an 18% increase in compared to last year.

As for the distribution of income by areas, the picture is as follows. The Productivity and Business Processes division, which includes Office, LinkedIn and Dynamics, generated about 33% of revenue. Intelligent Cloud (Auzre, server products and cloud services) generated 38% of Microsoft’s revenues. The remaining 29% came from More Personal Computing (Xbox, Windows, and Surface).

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