March 29, 2024

Microsoft Reported 22% YoY Growth in Revenue in Q1 FY22

The US-based tech behemoth Microsoft announced the first-quarter (Q1) results on Tuesday. It reported a revenue of USD 45.3 Billion, a 22% year-over-year (YoY) growth. The company generated USD 20.2 Billion in operating income, a significant increase of 27% since the last year same quarter. It also posted a net income of USD 20.5 Billion GAAP, up by 48% since Q1 2020.

“We delivered a strong start to the fiscal year with our Microsoft Cloud generating $20.7 billion in revenue for the quarter, up 36% year over year,” Microsoft’s Vice President and CFO, Amy Hood said in a statement. The company reported its most prominent growth since 2018, as in the previous quarter it reported 21% YoY growth. Following the quarterly results, its share price surged 2% on Tuesday. It has beat Wall Street expectations by a considerable margin.

Microsoft mentioned that its Productivity and Business Processes segment delivered USD 15 Billion in revenue, which includes Office Consumer and Office Commercial products. The company’s professional social platform, LinkedIn reported a 42% increase in revenue. Meanwhile, its Dynamic products and cloud services revenue witnessed a 31% YoY growth.

The company’s Intelligent Cloud segment, which includes System Center, Visual Studio and Window Server, Azure Cloud, and GitHub, generated USD 16.96 Billion in revenue. This is a robust growth of 31% growth since Q1 FY21. Microsoft’s cloud service segment Azure witnessed a 50% YoY growth. On the future of the cloud service segment growth, Amy Hood said that “we expect healthy broad-based growth in our Azure consumption business consistent with recent trends and our user business while continuing to benefit from Microsoft 365 momentum to see a moderation of growth rates given the size of the install base.”

Microsoft’s More Personal Computing business, which comprises gaming and search advertising and Windows devices, reported USD 13.3 Billion in revenue in this quarter. However, its Xbox segment revenue witnessed 2% YoY growth while its Surface revenue tanked 17% since Q1 FY21. Hood said in the conference call that Microsoft witnessed strong growth in sales of commercial PCs. She added the company may observe acceleration in sales of Window PCs to “low and mid teens.”

Company’s Developments in Q1 FY22

In August 2021, Microsoft hired former cloud executive Charlie Bell for the corporate vice president role. He will be reporting to the executive vice president and chief human resources officer, Kathleen Logan. In the same month, it announced that it will increase the prices of Office commercial subscriptions, which includes Microsoft Excel and Word. The company’s 365 corporate vice president Jared Spataro said in a blog post that it’s “the first substantive pricing update since we launched Office 365 a decade ago.”

In July 2021, Microsoft announced the acquisition of security company CloudKnox to limit access to cloud resources. The latter company’s software works on Azure and even on Amazon and Google cloud platforms. Satya Nadella-led firm said in January that the company reported around USD 10 Billion in revenue in security services. Prior to the acquisition of CloudKnox, Microsoft had already announced the plans to purchase security service provider RiskIQ. The acquired company can spot security threats in an organization and assist them to resolve critical issues.