Microsoft reports Q1 revenue up 11% YoY to $50.1B, net income down 14% YoY to $17.6B, Office Commercial revenue up 7% YoY, LinkedIn up 17% YoY; stock drops 5%+
REDMOND, Wash. — October 25, 2022 — Microsoft Corp. today announced the following results for the quarter ended September 30 …
Microsoft
Context & Ripple Effects
Microsoft entered the quarter after a Q4 in which revenue grew 12% while net income grew only 2%, alongside 40% Azure growth and 26% LinkedIn growth. The new results preserve double-digit top-line growth but mark a sharper earnings reversal, while Office Commercial and LinkedIn continue to expand.
Microsoft’s investors immediately repriced the quarter, with shares falling more than 5% after revenue rose 11% but net income declined 14%.
Office Commercial revenue growth slowed to 7%, while LinkedIn grew 17%, making LinkedIn the faster-growing of the two named commercial businesses in the report.
Second-order effects
The stock reaction raises the bar for Microsoft’s next disclosures: investors will focus on whether revenue growth can again translate into net-income growth, as later reported in the subsequent Q3 results.
The gap between LinkedIn and Office Commercial growth puts greater attention on the relative contribution of Microsoft’s workflow and professional-network businesses to commercial expansion.
Third-order effects
Across the covered quarters, Microsoft’s earnings story shifts from a period of profit pressure to renewed revenue and income growth, suggesting that investors will judge the company on the durability of commercial monetization rather than revenue growth alone.
If Office Commercial’s later reacceleration holds, Microsoft’s large installed workflow base becomes a more consequential source of earnings leverage than a single quarter’s growth-rate swing.
The trend: Microsoft’s results illustrate how large software platforms are increasingly evaluated on the conversion of commercial-product growth into sustained profit growth.
“In a world facing increasing headwinds, digital technology is the ultimate tailwind. ” - Satya Nadella Read the full Microsoft's Q1 earnings release here: https://www.microsoft.com/... Note about Forward-Looking Statements: https://view.officeapps.live.com/ ...
Based on current trends continuing, we expect our broader commercial business to grow at around 20% in CC this fiscal year, as we manage through the cyclical trends affecting our consumer business.
Big drop in OEM revenue as the work-from-bome/new PC boom fades, but cloud seems chipper. LinkedIn revenue jumps (but only seen int expressed in % terms so far, so not sure how impressive it is in $) No guidance yet but coming on conf call https://twitter.com/...
Azure growth rate forecast is for a decline of 5% in the second quarter. That's not going to calm investor worries about a deceleration in that closely-watched metric and that business. https://twitter.com/...
Microsoft says more than 20 million people have used Xbox Cloud Gaming. That's double the 10 million users earlier this year. It's clear the Fortnite deal is boosting Xbox Cloud Gaming usage https://www.theverge.com/...
Four years since our acquisition, GitHub is now at $1 billion in annual recurring revenue. More than 90 million people now use the service to build software for any cloud or platform, up 3X.
Microsoft CEO @satyanadella on gaming / PCs for Q1, 2023 fiscal quarter: • PC Game Pass subscriptions up 159% year over year • more than 20 million people have now used Xbox Cloud Gaming • Nearly 20% more active Windows devices than before pandemic https://www.theverge.com/...
Between GitHub and Office365, Microsoft still has ownership of more things in the world than people realize. They're aiming Teams right at Slack/Zoom, and likely to succeed. https://twitter.com/...
Microsoft seems to have actually done quite well with its acquisitons of Github ($7.5b) & LinkedIIn ($26b), bucking the usual post-takeover trend. Not sure if $33.5b worth of well tho. And let's just quietly forget about Skype ($8.5b ) & Nokia's handset biz ($7b) https://twitter.…
I'm obviously hugely biased (while I'm not & have never been a GitHub employee, I have worked on their Archive Program over the last three years) but nonetheless this is legitimately impressive https://techcrunch.com/...
I wonder if the media is making a mistake or if someone at Microsoft misled them, but GitHub does *not* have 90m *active* users, it's *total* users. It always reported signups, not active. https://techcrunch.com/...
Recently I've had a handful of conversations reflecting on the early days at GitHub (chaotic, interesting, intensely challenging, mostly fun). This update took my breath away. You'd damn sure be able be able to knock 25 yo me over with a feather. https://twitter.com/...
Microsoft CEO Satya Nadella also says “nearly half of the Xbox Series S buyers are new to our ecosystem.” That's why Microsoft built the Xbox Series S. It's the Xbox Game Pass console for people who have never touched an Xbox before https://www.theverge.com/... https://twitter.co…
Microsoft now breaks out “devices revenue” in total in its earnings as it now includes Surface, HoloLens, and PC accessories instead of just Surface hardware revenue https://www.theverge.com/...
Microsoft is expecting a rough quarter for Windows and devices for Q2, 2023 fiscal • Windows OEM revenue to decline in the high 30 percent • Devices revenue should decline around 30 percent • Xbox content and services to decline low to mid teens https://t.co/XATKTuTPTl
Microsoft's fiscal Q1, 2023 earnings are out: • Windows OEM revenue down 15% • Devices revenue (Surface) up 2% • Xbox hardware revenue up 13% • Xbox content and services revenue down 3% full details here: https://t.co/XATKTuTPTl