Microsoft announced making $51.9 billion in revenue and $16.7 billion in net income. The financial results represented an increase of 12 per cent in revenue and 2 per cent in net income.
However, the company’s main businesses, Windows and Xbox, suffered losses. For example, its PC shipment saw a 13 per cent decline, and the Windows OEM revenue declined by 2 per cent.
Clearly, the increase that Microsoft saw in its PC business during the pandemic lockdown has now gone down. With it went the spending on accompanying software that powers the devices.
Kendra Goodenough, director of Microsoft investor relations, told The Verge that the entire market had weakened and affected the company’s results.
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“Consumer side is definitely dropping off at a faster rate when it comes to overall demand environment right now, so when we think of the commercial strength on Surface that’s where we get a little bit more help on that Surface [revenue] number,” Goodenough said.
Surface sold more than enough units during the period under review, increasing its revenue by about 10 per cent. However, Xbox sales were a different story. Its hardware revenue dropped by 11 per cent while its software and services saw a 6 per cent dip.
“The decline you’re seeing in Xbox hardware is partly a reflection of the fact we had that launch… about two years ago, so with the supply constraints that we had seen over the last couple of years it has kind of extended out that period for consoles,” Goodenough explained further. “We’re still seeing strong demand, but coming off those highs that we saw in the last couple of years with the launch.”
The company’s other products, such as Office, cloud, Azure, and server services, also experienced revenue growth too of 22 per cent. Even its not-so-popular social media platform, LinkedIn, reported a 26 per cent revenue growth.
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