Microsoft FY22 Q1 earnings: $45.3 billion in revenue, surpassing forecasts

Microsoft HQSource: Windows Central

What you need to know

  • Microsoft has reported its FY22 Q1 earnings.
  • The company managed $45.3 billion in revenue, a 22% year-over-year (YoY) increase.
  • Microsoft Cloud produced $20.7 billion in revenue this past quarter.

Microsoft’s FY22 Q1 (fiscal year 2022, quarter one) earnings are in. As is the trend for Microsoft, it increased revenue by a sizeable percentage (22% year over year), coming in with $45.3 billion and beating Wall Street estimates yet another quarter in a row. The company highlighted its earnings as follows:

  • Revenue was $45.3 billion and increased 22%
  • Operating income was $20.2 billion and increased 27%
  • Net income was $20.5 billion GAAP and $17.2 billion non-GAAP, and increased 48% and 24%, respectively
  • Diluted earnings per share was $2.71 GAAP and $2.27 non-GAAP, and increased 49% and 25%, respectively
  • GAAP results include a $3.3 billion net income tax benefit explained in the Non-GAAP Definition section below

Microsoft Cloud was cited as a major breadwinner this quarter, pulling in $20.7 billion in revenue. That’s a 36% year-over-year (YoY) jump.

Cloud, productivity, and computing gains

Intelligent CloudSource: Microsoft

Productivity and Business Processes revenue was up by 22% YoY thanks to $15 billion in revenue. Below are the key elements that came together to make that number possible:

  • Office Commercial products and cloud services revenue increased 18% (up 16% in constant currency) driven by Office 365 Commercial revenue growth of 23% (up 21% in constant currency)
  • Office Consumer products and cloud services revenue increased 10% (up 8% in constant currency) and Microsoft 365 Consumer subscribers increased to 54.1 million
  • LinkedIn revenue increased 42% (up 39% in constant currency) driven by Marketing Solutions growth of 61% (up 59% in constant currency)
  • Dynamics products and cloud services revenue increased 31% (up 29% in constant currency) driven by Dynamics 365 revenue growth of 48% (up 45% in constant currency)

Keep an eye on LinkedIn revenue over the following quarters given the news surrounding the service and how future quarters may be impacted.

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More Personal ComputingSource: Microsoft

Intelligent Cloud saw a 31% jump with $17 billion in revenue. And More Personal Computing (yes, that’s the category name) hit $13.3 billion, which represents a 12% jump year-over-year. News advertising, Windows (once again, bid welcome to Windows 11), and gaming hardware were contributors to the division’s success. Here are the highlights from that category:

  • Windows OEM revenue increased 10%
  • Windows Commercial products and cloud services revenue increased 12% (up 10% in constant currency)
  • Xbox content and services revenue increased 2% (relatively unchanged in constant currency)
  • Search and news advertising revenue excluding traffic acquisition costs increased 40% (up 39% in constant currency)
  • Surface revenue decreased 17% (down 19% in constant currency)

More Personal Computing HighlightsSource: Microsoft

As can be seen via the graphs and images above, as well as the highlight bullets, though Microsoft’s cloud business saw gains, other departments didn’t have booming revenue growth for the quarter, including the Surface line of products. However, other Microsoft hardware, such as the Xbox Series X and S, contributed to Xbox hardware revenue percentage gains of 166% year over year. For Xbox content and services, third-party titles didn’t hold up as well as usual but were partially balanced out by Xbox Game Pass revenue and first-party title successes.

What’s next

As is the standard, every quarter after Microsoft releases its report, it holds an investor call later in the day. You can listen in on the call at 2:30 p.m. PT / 5:30 p.m. ET over at the company’s investor portal. You’ll want to listen in if you’re interested in learning about figures and nuggets of information not quite standard for earnings report coverage but still enlightening about the company’s upcoming plans and general trajectory.

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