Microsoft’s earnings for the third quarter of fiscal 2022 were strong again, thanks in large part to continued momentum in its cloud services. The Microsoft Cloud division’s revenue for the quarter was $23.4 billion, up 32% year-over-year. Azure and “other cloud services” grew 46% in the quarter. Microsoft still does not provide Azure revenue independently of the rest of its activities in the field.
Total revenue for the quarter was $49.4 billion, up 18%. Earnings per share was $2.22, up 9%. Expert forecasts called for earnings of $2.19 per share and revenue of $49.05 billion.
Image: Microsoft.
Solid turnover for all products
Revenue was high across Microsoft’s three product categories: Productivity and Business Processes (Office, LinkedIn and Dynamics); Intelligent Cloud (server products and cloud services) and More Personal Computing (Windows, Xbox, Search and Surface). Microsoft 365 consumer subscribers increased 16% to 58.4 million. Office 365 commercial subscriber growth increased 16% year over year.
Microsoft executives attributed the strong results to stronger-than-expected sales, commercial bookings from new, renewed and large customers that far exceeded expectations, and growth in large, long-term Azure contracts. . The $19.7 billion acquisition of Nuance that closed in March has had little impact so far. Going forward, Nuance financial data will be part of the Intelligent Cloud Servers and Services segment.
Windows had a strong quarter driven largely by business growth, with the Windows OEM business growing 11% year-over-year. Surface also performed well despite a very strong quarter last year, with revenue up 18%.
Cyber security activity is still growing
Asked by CNBC, Microsoft pointed out that its cybersecurity business is worth $15 billion a year, adding that it is growing faster than any of the company’s other businesses. In January 2021, Microsoft revealed that this activity represented $10 billion for the company.
However, Microsoft is subject to criticism on this topic, for having praised the rapid growth of this activity, while its customers always have to spend money to strengthen the security of Microsoft software and services that they have already paid for.
For those wondering what impact the war in Ukraine is having on the Redmond giant’s revenue, Amy Hood, CFO, assured during the conference call about the results of the quarter: Russia represents less than 1% of revenue from Microsoft. Earlier this year, the company announced it was halting all new business with Russia following its invasion of Ukraine.
Source: ZDNet.com