Microsoft FY22 Q4 earnings: Surface up, Xbox down, as tech giant falls short of expectations
Microsoft just reported its earnings from the final quarter of its 2022 fiscal year.
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What you need to know
Microsoft fell short of industry expectations in several key areas, as revealed by the company’s FY22 Q4 report. Total revenue and earnings per share both fell short of projections. Microsoft’s Productivity and Business Processes, Intelligent Cloud, and More Personal Computing sectors all fell short of what Wall Street experts expected, according to Bloomberg.
Microsoft adjusted its expectations back in April 2022, but the company stated that “unforeseen items” had a larger impact than expected. The quarterly report pointed to an unfavorable exchange rate, extended production shutdowns in China that went into May, reduced spending on advertising, and the ongoing war in Ukraine as factors that affected earnings and revenue. Severance expenses of $113 million also played a role.
Personal Computing (up 2%) had $14.4 billion in revenue. Microsoft highlighted the following figures in itsearnings report:
The dip in Microsoft’s OEM revenue was somewhat offset by growth in the Windows Commercial segment. Microsoft pointed to “production shutdowns and a deteriorating PC market” when discussing its OEM revenue.
Microsoft’s Surface and Windows resultsdelivered positive news whileXbox gaming revenue fell 6% year-over-year.
The tech giant’s revenue from Productivity and Business Processes was $16.6 billion in the quarter (up 13%). Office Commercial products and cloud services revenue increasing 9%, Office Consumer products and cloud services revenue going up 9%, and LinkedIn revenue increasing 26% were among the company’s highlights.
Intelligent Cloud increased 20% and brought in $20.9 billion, largely driven by Azure and other cloud services seeing revenue growth of 40%.
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“We see real opportunity to help every customer in every industry use digital technology to overcome today’s challenges and emerge stronger,” said Satya Nadella, chairman and chief executive officer of Microsoft. “No company is better positioned than Microsoft to help organizations deliver on their digital imperative – so they can do more with less.”
“In a dynamic environment we saw strong demand, took share, and increased customer commitment to our cloud platform. Commercial bookings grew 25% and Microsoft Cloud revenue was $25 billion, up 28% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “As we begin a new fiscal year, we remain committed to balancing operational discipline with continued investments in key strategic areas to drive future growth.”
Microsoft also announced results for its fiscal year that ended on June 30, 2022. Here are the highlights:
Coming up
Microsoft CEO Satya Nadella will be part of awebcastat 2:30 PM Pacific time (5:30 PM Eastern time). During the call, company higher-ups will discuss predictions for the upcoming quarter.
Sean Endicott is a tech journalist at Windows Central, specializing in Windows, Microsoft software, AI, and PCs. He’s covered major launches, from Windows 10 and 11 to the rise of AI tools like ChatGPT. Sean’s journey began with the Lumia 740, leading to strong ties with app developers. Outside writing, he coaches American football, utilizing Microsoft services to manage his team. He studied broadcast journalism at Nottingham Trent University and is active on X @SeanEndicott_ and Threads @sean_endicott_.
