Microsoft rides the cloud, Office and Windows to sustained growth in Q3 2022 | TechBuzz

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Microsoft’s third quarter 2022 financial results are here, and the company’s posting double-digit growth yet again: revenue of $49.4 billion and net income of $16.7 billion. Revenue is up 18 percent, and that profit represents an 8 percent jump year over year. Microsoft is crediting a chunk of this quarter’s growth to the cloud, with server and cloud services revenue up 29 percent specifically.

There was plenty of reason to suspect Microsoft would still sport a smile this quarter. While the PC industry has started to decline from its pandemic highs, it was flagging Chromebook sales — not Microsoft Windows machines — that were responsible for the entirety of the recent dip. Meanwhile, the Xbox just had its best sales in 11 years, handily beating the relatively supply-constrained PS5.

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Sure enough, Microsoft says its “more personal computing” business, including Windows and Xbox, was up 11 percent to $14.5 billion in Q3 — and “Windows OEM revenue growth,” which should include the price manufacturers pay to put Windows 11 on the laptops and desktops you buy, was up 11 percent specifically. Xbox hardware revenue was up 14 percent, with a 4 percent jump for Xbox content and services revenue, for an overall 6 percent boost to gaming revenue.

We were eager to see if Microsoft’s big Office and cloud businesses also stayed rosy as some employees return to physical offices, and the answer is definitely yes: 17 percent revenue growth in “Productivity and Business Processes” segment this quarter, with Office up 12 percent and 11 percent in the commercial and consumer divisions, respectively. Cloud revenue was up 26 percent overall to $19.1 billion.

We expect Microsoft will comment further on all these segments during the earnings call this afternoon, and we’ll add those comments to this post.

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Microsoft Surface is also seemingly doing well at 13 percent revenue increase after its revenue surprisingly increased 8 percent last quarter (even though the company previously warned of a dip). 2022 is the 10th anniversary of the Microsoft Surface, and we expect the company has more up its sleeves than the lackluster Surface Laptop SE and this fascinating and fancy teleconferencing camera.

Here’s one image with all the gains (and one loss) for Microsoft’s individual businesses:

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Microsoft’s purchase of Activision Blizzard, which is set to make Microsoft the “third-largest gaming company by revenue, behind Tencent and Sony,” likely won’t feature in these earnings — the deal isn’t likely to close until next year.


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