Microsoft reports Q3 revenue up 7% YoY to $52.9B, net income up 9% YoY to $18.3B, Office Commercial up 13% YoY, Dynamics 365 up 25% YoY, and LinkedIn up 8% YoY
REDMOND, Wash. — April 25, 2023 — Microsoft Corp. today announced the following results for the quarter ended March 31, 2023 …
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Context & Ripple Effects
This quarter provides a baseline for Microsoft’s subsequent reported growth: revenue growth rose to 13% in the following Q1 report and 18% in the following Q2 report, while Office Commercial remained a consistent double-digit contributor. The later Q2 results showing 18% revenue growth make this period’s 7% growth an early point in that improving sequence.
Within the reported commercial portfolio, Dynamics 365 grew faster than Office Commercial and LinkedIn. That mix matters because it shows growth concentrated not only in broad productivity software but also in business workflow products, consistent with continued mid-20% Dynamics 365 growth in the next quarter.
First-order effects
Microsoft enters the next reporting period with revenue of $52.9B and net income of $18.3B, both higher year over year, while Office Commercial, Dynamics 365, and LinkedIn each add growth within its commercial businesses.
Dynamics 365’s 25% growth makes it the fastest-growing named segment, ahead of Office Commercial’s 13% and LinkedIn’s 8%, increasing its importance in Microsoft’s commercial growth mix.
Second-order effects
Sustained growth across Office Commercial and Dynamics 365 raises the competitive bar for enterprise productivity and business-software vendors competing for the same customer workflows.
The combination of productivity, business applications, and professional-network revenue gives Microsoft multiple commercial surfaces through which to deepen customer relationships, rather than relying on a single product category.
Third-order effects
If this mix persists, enterprise software competition will increasingly center on workflow-native bundles that combine productivity, business processes, and professional data rather than stand-alone applications.
The subsequent acceleration in Microsoft’s reported revenue growth suggests that recurring commercial software portfolios can provide resilience, though this single quarter alone does not establish the durability or source of that acceleration.
The trend: This is one data point in the continued shift toward monetizing integrated enterprise workflows across productivity, business applications, and professional platforms.
And of course, Bing has more than 100 million daily active users and daily installs of the Bing mobile app have grown 4X since launch 😊We look forward to continuing this journey in what is a generational shift in the largest software category - search.
· In 3 months since we made Copilot for Business broadly available, over 10,000 organizations have signed up · We have nearly 33 million MAU of Power Platform, up nearly 50% YoY · Teams usage is at an all-time high and surpassed 300 million MAU this quarter
Microsoft Cloud run rate revenues to ~$114 billion. To put that number in context, Microsoft's TOTAL revenues were ~$110 billion in fiscal 2018. https://twitter.com/...
· Nearly 720,000 organizations use Azure Active Directory, up 33% YoY · Nearly 600,000 customers now have four or more security workloads, up 35% YoY · LinkedIn saw record engagement with more than 930 million members
We continue to focus on 3 priorities: 1) Helping customers use the breadth and depth of the Microsoft Cloud to get the most value out of their digital spend
Interesting @microsoft statements this quarter on gaining share in @Azure, Dynamics, Security, @MicrosoftTeams, @LinkedIn, and @MicrosoftEdge. I like this more aggressive Microsoft. $MSFT
$MSFT Q3 2023 Revenue up 7% to $52.9 billion Net income up 9% to $18.3 billion Azure up 27% Office Commercial up 13% Office 365 Commercial up 14% Office Consumer up 1% LinkedIn up 8% Windows OEM down 28% Windows Commercial up 14% Devices down 30% Xbox up 3%
Sharing some momentum metrics Satya noted on our earnings call: · We have more than 2,500 Azure OpenAI Service customers, up 10X QoQ · We have more than 15,000 Azure Arc customers, up over 150% YoY · 76% of the Fortune 500 use GitHub to build, ship, and maintain software
Office 365 and Azure are really the crown jewels of Microsoft's business right now. Both Windows revenue and XBox hardware revenue are down 30% year over year. Windows is suffering due to the PC upgrade cycle as everyone bought new devices during COVID. https://www.theverge.com/.…
Microsoft's quarterly earnings call is starting. big picture: - Azure growth bit better than feared - big expected Windows OEM slump continues - Office ARPU bump comes in handy more to follow here https://www.cnbc.com/...
Microsoft CEO Satya Nadella on Xbox in Q3, 2023 fiscal. “We set third quarter records for monthly active users and devices.” Nearly $1 billion in revenue from subscriptions this quarter, too https://www.theverge.com/... https://twitter.com/...