Microsoft yesterday announced its financial results for the fourth quarter of the financial year 2021, with a profit of $16.5 Billion and Revenue of $46.2 billion.
Shareholders must be very happy, but a second look at the company’s financials shows that some parts of its business are hurting. It’s Windows OEM, the Surface line businesses bled in the quarter in review.
It’s Windows OEM revenue declined by 3%, OEM Pro by 2%, and non-pro OEM by 4%. All caused by “supply chain constraints” Microsoft said. This is from the current global chip storage.
Even Surface revenue decreased significantly by 20% “driven by supply constraints” Microsoft said.
Microsoft’s Gaming business revenue increased 11%, but its Xbox content and services revenue fell slightly by 4%.
Despite the huge demand for Personal computers this year, the global chip storage has damped supply. Microsoft will be looking to boost its PC sales with its new operating system Windows 11.
On the brighter side, Microsoft’s Office, Cloud services, and Linkedin helped the company get strong profits for the second quarter of the year.
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Office 365 subscribers were 51.9 million, increasing 22% year-over-year. Its Cloud services business grew 34%, with Azure having a chunk of 51%.
Microsoft’s overall cloud business did $17.4 billion, a large 37% of the company’s $46.2 billion revenue.
Linkedin also did well, increasing its revenue by 46%, which was driven by Marketing solutions growth of 97%.
Company CEO Satya Nadella mentioned “In the past 3 years, gaming, security, and now LinkedIn, have all surpassed $10 billion in annual revenue,” during its earnings call yesterday.
Xbox consoles did quite well. “The Xbox Series S and X are our fastest selling consoles ever, with more consoles sold life-to-date than any previous generation,” he said.
Shareholders couldn’t be happier,
The company returned $10.4 billion to shareholders in the form of share repurchases and dividends in the fourth quarter of the fiscal year 2021. An increase of 16% compared to the fourth quarter of the fiscal year 2020.
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