Microsoft has reported its latest quarterly earnings and, while the figures are good for its Office and Cloud businesses, as well as LinkedIn advertising, the rest of the company has struggled.
While Microsoft made an overall profit – something not all other tech giants can boast – its revenue grew 11 per cent to $78.5 billion but net income of $27.6 billion had dropped by 14 per cent, meaning profits are down compared to the previous quarter.
LinkedIn, however, bucked an overall industry trend for falling ad spend, and reported a 17 per cent increase. Search and news advertising on the oft-forgotten Bing browser, remarkably, grew by 16 per cent.
Office Commercial products and cloud services revenue increased 7 per cent, largely driven by Office 365 Commercial revenue growth of 11%· Office Consumer products and cloud services revenue jumped 7 per cent, as well, while the number of Microsoft 365 Consumer subscribers grew to 61.3 million.
“In a world facing increasing headwinds, digital technology is the ultimate tailwind,” said Satya Nadella, chairman and chief executive officer of Microsoft.
“In this environment, we’re focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way.”
Amy Hood, executive vice president and chief financial officer of Microsoft, added:
“This quarter Microsoft Cloud revenue was $40.24 billion, up 24 per cent year-over-year. We continue to see healthy demand across our commercial businesses including another quarter of solid bookings as we deliver compelling value for customers.”
But, as with Snap, Alphabet, and Spotify, Microsoft saw its share price tumble after the markets closed. Currently, the price is sitting around 6.71 per lower than it did at the start of the day and 19.17 per cent lower than it did at the start of the year.
Microsoft also didn’t release an update on its Xbox Game Pass subscription service and hasn’t done so since the service hit 25 million users in January following some big releases.
“In gaming, we saw usage growth across all platforms, driven by strength off console,” said Nadella. “PC Game Pass [not Xbox Game Pass] subscriptions increased 159 per cent year-over-year.”
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