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Microsoft reports $45.3 billion in revenue, Windows and cloud on the rise as Surface struggles

Stonks meme showing Microsoft revenues of Cloud Xbox Windows and Microsoft 365 going up

Today, Microsoft revealed the results of the first quarter of its 2022 fiscal year, reporting $45.3 billion in revenue. This is a 22% increase compared to the same period in the previous fiscal year. Operating income also jumped to $20.2 billion, which is a 27% increase. Net income grew to $20.5 billion (GAAP) and $17.2 billion (non-GAAP), which is a positive change of 48% and 24%, respectively. This resulted in diluted earnings per share of $2.71 (GAAP) and $2.27 (non-GAAP), which is an impressive growth of 49% and 25%, respectively.

A lot of this revenue jump can be attributed to Microsoft's cloud business, which continue to do well in the quarter that ended on September 30, 2021. Office Commercial and cloud services revenue was up by 18% (16% in CC), while Office 365 Commercial grew by 23% (21% in CC). Similarly, Office Consumer products and cloud services jumped by 10% (8% in CC) as the company reported that Microsoft 365 Consumer now has 54.1 million subscribers. LinkedIn's revenue increased by 42% (39% in CC) and Dynamics suite grew by 31% (29% in CC). Microsoft also reported massive growth for Server products at 35% (33% in CC) and Azure at 50% (48% in CC). Overall, the company's revenue in the Productivity and Business Processes domain stood strong at $15 billion, an increase of 22% (20% in CC) while Intelligent Cloud commanded $17.0 billion, a growth of 31% (29% in CC).

In the area of More Personal Computing, Microsoft reported an overall revenue of $13.3 billion, which is an increase of 12% (11% in CC). This was spearheaded by Windows OEM revenue that grew by 10%, Windows Commercial (12%), Xbox (2%), and Search and news advertising revenue (40%). The company's Surface business continued to decline, and reported a revenue decrease of 17% (19% in CC). That said, Microsoft's new Surface hardware just launched a month ago, so this figure isn't too surprising. However, the report is notably missing the total number of Xbox Game Pass subscribers, which was officially reported to be at 18 million back in January of this year.

Microsoft CEO Satya Nadella stated that:

Digital technology is a deflationary force in an inflationary economy. Businesses – small and large – can improve productivity and the affordability of their products and services by building tech intensity. The Microsoft Cloud delivers the end-to-end platforms and tools organizations need to navigate this time of transition and change.

Overall, Microsoft returned $10.9 billion to shareholders via dividends and share repurchases. This is a growth of 14% compared to the same quarter of the previous fiscal year.

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