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Microsoft reports unrelenting growth in Q3 2022

Yes, you read the headline correctly. Microsoft’s Q3 coincides with other companies’ Q1. The name notwithstanding, Microsoft has reported a very lucrative last quarter, buoyed by the cloud, Office, and Windows.

The software giant enjoyed another double-digit growth, as investors have become used to. Revenue closed at $49.4 billion, an 18 percent increase year on year, with net income totaling $16.7 billion, representing an 8 percent rise year on year.

The majority of the growth came from Microsoft’s cloud business, which brought in $23 billion combined with server products. The former grew 32 percent, while the latter expanded by 29 percent.

Microsoft bucked the industry trend in many aspects last quarter. For example, even though the PC market suffered a decline, the shortfall was attributed to Google’s Chromebooks instead of Microsoft’s Windows PCs. In the gaming department, Xbox saw its best sales in 11 years and overtook its main rival, Sony’s PS5, which suffered more from supply chain issues.

The more personal computing bucket, where Microsoft places Windows and Xbox, witnessed 11 percent growth to bring in $14.5 billion. Windows OEM revenue, which Microsoft generates from companies putting Windows OS on their hardware, jumped by 11 percent.

Xbox sales improved by 14 percent, with content bringing in 4 percent more revenue. The latter was down to increasing Xbox Game Pass subscriptions and the availability of first-party games. The CEO, Satya Nadella, revealed that 10 million users had streamed games from the company’s cloud. Other game streaming services are reluctant to reveal their numbers, so it is impressive that Microsoft has attracted so many users while still in beta. In comparison, PlayStation Now reported 3.2 million users, but the offering has been converted to another subscription service.

Still on gaming, Xbox Game Pass saw its subscribers playing 45 percent more over the past year, making up billions of hours of playtime.

Microsoft’s Office and cloud businesses are still money-spinners as the Productivity and Business Processes segment pulled in 17 percent more revenue. Office on its own grew by 12 percent. It now boasts 58.4 million users, up 2 million over last quarter and 8 percent more than it was this time last year.

Another business growing by leaps and bounds is LinkedIn which saw a 34 percent rise over the last quarter. Even though impressive, the growth has been slowing down as it witnessed 37 percent, 42 percent, and 46 percent growth in the three previous quarters.

The surprise of the pack was the Surface division which actually grew by 13 percent in revenue. Microsoft had predicted a dip in the previous quarter, but the business did quite the opposite by posting an eight percent rise. The division capitalized on the success last quarter. This year marks the tenth anniversary of the surprise announcement of the hardware line. Hopefully, Microsoft has some exciting refreshes in the works to mark the milestone.

Microsoft says its purchase of Activision Blizzard may not close until next year, when the company will become the third-largest gaming business globally.

The company is expecting single-digit growth in most of its businesses next quarter.

Written by HackerVibes

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