Microsoft 2022 quarterly revenue exceeds expectations but fears its cloud service sales have peaked.
Microsoft has offered the financial results for its second fiscal quarter of 2022. Its income during this period was $ 51.7 billion (Euro45.6 billion).
It is 20 % more than in the same period of the previous year.
In terms of net profits, the software giant Redmond reached 18,770 million dollars (16,600 million euros), which is 21% more than the previous fiscal year.
With these results, Microsoft has exceeded the expectations of expert analysts: the average expected revenue was 50,880 million dollars and about 17,500 million in net profit, according to Reuters.
Microsoft 2022 quarterly revenue exceeds expectations
Microsoft shares fell at the close of the market by 4 % to end up rising in afterhours just over 1.2%.
Microsoft Office, cloud services and Windows were the products responsible for driving these satisfactory results during the last 3 months, followed by the console and video game division.
Of all the products mentioned above, the most notable growth is that of Azure, the cloud computing service: sales have risen by 46 %. However, expert analysts have not been very satisfied with this result.
Growth of 50% had been forecast for the past fiscal quarter.
So, the final data, below the expected, can be interpreted as Azure has peaked in sales and that, in the coming quarters, its income will be increasingly static (according to Diario Financiero).
Meanwhile, the demand for computers still during the pandemic has given the PC market a particularly good year: 340 million were distributed throughout 2021.
Presentation of Microsoft 2022 quarterly revenue exceeds expectations
During the results presentation, Satya Nadella, CEO of Microsoft, spoke of "a structural change in the demand for PC" and "a renaissance of the PC thanks to the increase in time that people invest in their computers" (through The Verge).
Despite the good health of this sector, Microsoft's previous forecasts that predicted good sales of Surface did not end up being fulfilled.
Surface product revenues rose only 8 % during the past fiscal quarter, less than expected.
Behind the growth lie the October releases of Surface Pro 8 and Surface Laptop Studio.
Microsoft claims to launch more Surface products throughout 2022 to celebrate its 10th anniversary, so there will be more opportunities to trace their range of laptops.
About computer software, it is already in its second quarter, and it is already having a positive economic impact.
Although for most consumers Windows 11 is a free upgrade, revenue from Windows licenses (so that, for example, computer manufacturers can include the preinstalled operating system) increased by 25% over the same quarter of the previous year. Windows commercial products increased their revenue by 13 %.
Plans to Microsoft 2022 quarterly revenue exceeds expectations
Meanwhile, Microsoft's plans to convince consumers of new Office subscription models and products (such as Microsoft Teams, built into Windows 11) have had their effect: Microsoft 365 Consumer subscriptions have reached 56.4 million. It is a 20% growth over the same period of fiscal year 2021.
As for the world of video games, Microsoft took advantage of the review of the results to reveal that twenty million people have already played Halo Infinite (it went on sale on December 8) and another eighteen million have already played Forza Horizon 5 (it came out on November 9).
The good health of these two titles confirms rebound the success of the Xbox Game Pass subscription service. Thanks to the existence of Game Pass, both the new Halo and the latest Forza Horizon can be enjoyed without paying directly for them.
Would both titles have gotten so many players if they had only been put on sale by the classic option of paying 70-60 euros for them? If you look at the data, the answer is no.
For example, in late 2020, Microsoft announced that twenty-four million people had played Forza Horizon 4, the previous instalment of this driving series. However, this figure was only achieved 2 years after the game was released and one year after it was released on Game Pass.
Games and Microsoft 2022 quarterly revenue exceeds expectations
By comparison, Forza Horizon 5 has garnered eighteen million players in just over 3 months and has been available in the Game Pass catalogue since launch day.
As for Halo Infinite, it is difficult to compare exact data due to the hybrid nature of the game (its multiplayer is free-to-play and came out before its paid campaign), but Nadella has revealed that it has been "the biggest release in Halo history".
Although Microsoft did not give much more data about Game Pass during its last financial results, it is expected that this service will give a lot of talk in the economic field during this year. MS has already confirmed that it will add Activision Blizzard games to Game Pass, such as World of Warcraft or Call of Duty, once its acquisition of Activision-Blizzard is completed.
Finally, and more than a year after its launch, the revenue of Xbox Series X / S consoles rose by 4% last quarter thanks to the continuous demand for new video consoles. Gaming revenue was up 8 %, while Xbox services were up 10 % compared to the same quarter last year.
Beyond the anticipated acquisition of Activision Blizzard, Nadella took the opportunity to talk about her vision of the metaverse:
"We feel very well positioned about it and I think we can catch what I think will be the next internet trend. I think this new era will be a more open world where people will be able to create their own worlds on the metaverse, whether they are organizations, console developers or any other type of person."
