Microsoft’s financial results for the 2nd quarter of FY23 (Oct – Dec 22) don’t make the usual pretty reading this time.
Revenue was $52.7 billion – an increase of just 2%
Net income was $16.4 billion – a decrease of 12%
That’s the first decrease for a long time, showing even Microsoft are not immune to the impacts of rising costs and global recessions. However, it’s not all doom and gloom:
Productivity & Business Processes
Revenue = $17 billion…up 7%
- Office 365 Commercial revenue up 11%
- LinkedIn revenue up 10%
- Dynamics 365 revenue up 21%
All increases but quite a bit lower than we’re used to from previous quarters. Office Commercial (i.e. on-premises) has dropped 30% as customers continue to move to the cloud.
Intelligent Cloud
Revenue = $21.5 billion…up 18%
- Azure = 31% up
In most scenarios, 31% growth is good, great even…but not for Azure after a couple of years of 50%+ growth! Although the most recent quarters dipped just below that 50% marker, this quarter still represents a significant drop. Microsoft do mention higher energy costs as a factor in the decreased margin.
Earnings call
There are now 12,000 Azure Arc customers, a 100% increase in 12 months.
45,000+ Power Automate customers – a 50% increase over last year.
Satya Nadella mentions new functionality to build workflows from natural language prompts…that would be really useful for me!
280 million Monthly Active Users (MAU) for Teams
Teams Phone added over 5 million PSTN seats in the last 12 months and is the market leader
Microsoft Security is now over $20 billion and Nadella states they’re taking market share in all the major categories. He also states that a customer has consolidated from 10 security vendors down to just Microsoft – this is something I often advise that organisations explore.
EMS is now at 241 million seats.
Overall, LOTS of mentions of AI from Satya Nadella (as expected) and a real focus on the future with AI, Platforms, Viva, E5 and more. The expectations for future growth and advances seem to more than outweigh the slight disappointment of these results.
You can se the Microsoft details here.
Cloudy with a chance of Licensing 