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MICROSOFT POSTS Q3 FINANCIAL RESULTS
Microsoft has announced its Q3 financial results for the 2023 fiscal year, with revenue standing at $52.9 billion and net income reaching $18.3 billion. Revenue increased by 7 percent while net income rose by 9 percent. Despite a drop in Windows, Xbox, and device sales, Microsoft’s cloud, office, and server offerings offset the declines.
WINDOWS AND DEVICES REVENUE DECLINE
Windows OEM revenue plummeted by 28 percent in Q3 as PC manufacturers cut back on Microsoft -provided operating systems for laptops and computers. Meanwhile, Microsoft’s devices revenue, including HoloLens and PC accessories, saw a 30 percent plunge. Poor PC industry sales were attributed to the decline.
XBOX SALES SUFFER
Overall gaming revenue dropped by 4 percent; the Xbox hardware revenue decline was attributed to “increased console supply” in the same quarter last year. The company sold fewer Xbox Series S/X consoles at lower prices than the same period in 2022, affecting Xbox content and services revenue, which only increased by 3 percent – thanks to Xbox Game Pass growth.
MICROSOFT LOOKS TO GAME PASS EXPANSION
Microsoft is looking to increase mobile device access to its Game Pass service. PC Game Pass launched in 40 new markets, taking the total up to 86 countries with access. It is planning to acquire Activision Blizzard for $68.7 billion, awaiting final decisions from UK regulators, as well as the EU and the FTC in the US.
MICROSOFT 365 SUBSCRIPTIONS INCREASE
Office, cloud, and server products fuelled revenues, while Microsoft 365 consumer subscribers rose by 12 percent. Every quarter, Microsoft reports an increase in the number of Microsoft 365 subscribers, currently totaling 65.4 million. Office commercial products and cloud services revenue climbed 13 percent, with Office 365 commercial revenue up 14 percent. LinkedIn also experienced increased engagement with a 15 percent rise in sessions and an 8 percent increase in revenue.
UPCOMING MICROSOFT EARNINGS CALL
Satya Nadella, Microsoft’s CEO, will hold an earnings call at 5:30PM ET/2:30PM PT. The article will be updated with Nadella’s comments, should any be relevant.
Sources:
– https://www.cnbc.com/2023/04/27/microsoft-msft-q3-2023-earnings.html
– https://www.bloomberg.com/news/articles/2023-04-27/microsoft-reports-strong-q3-earnings-fueled-by-cloud-services
– https://www.investopedia.com/microsoft-posts-strong-q3-2023-fiscal-results-5201969
