Surface revenue went up 2%, beating expectations, while Windows OEM took a huge hit
Microsoft’s FY23 Q1 results fall primarily in line with expectations, although the PC market softened more than anticipated.
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What you need to know
Microsoft isreporting its FY23 Q1 resultstoday, netting $50.1 billion in revenue, which beat street estimates of $49.7 billion. That’s the good news.
Turning to the More Personal Computing division, Microsoft came in at $13.33 billion (Redmondhad predictedbetween $13 and $13.4 billion). That number is effectively flat compared to year-over-year as FY22 Q1 also saw $13.37 billion in revenue for More Personal Computing.
More specifically, Surface and devices revenue (excluding Xbox consoles) was up 2%, which beat Microsoft’s expectations of a “decline in the high single digits.” Of course, these numbers came well before the launch ofSurface Pro 9 and Surface Laptop 5, and it is unlikely that those will be huge draws for FY23 Q2.
Windows OEM was down a massive 15%, indicating that demand for laptops and PCs is taking a big dive. Indeed, Microsoft had only predicted a decline in the “high single digits,” making this a rare miss for the company. That 15% is offset by “5 points of positive impact from the prior year Windows 11 revenue deferral,” suggesting things may be much worse than previously believed.
Windows Commercial products and cloud services revenue grew 8% “driven by demand for Microsoft 365.” Likewise, search and news advertising via Bing continues to grow as revenue increases by 16%, which aligns with expectations.
Otherwise, it was an outstanding quarter for Microsoft, which mainly saw double-digit growth across Azure, LinkedIn, Office 365 Commercial, Office consumer products, and Dynamics.
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Daniel Rubino is the Editor-in-chief of Windows Central. He is also the head reviewer,podcast co-host, and analyst. He has been covering Microsoft since 2007, when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, laptops, next-gen computing, and watches. He has been reviewing laptops since 2015 and is particularly fond of 2-in-1 convertibles, ARM processors, new form factors, and thin-and-light PCs. Before all this tech stuff, he worked on a Ph.D. in linguistics, watched people sleep (for medical purposes!), and ran the projectors at movie theaters because it was fun.
