Microsoft Booming, Surface, Office 365 & Xbox Report Double Digit Growth
Sales of Surface tablets are up 13% at Microsoft, Xbox sales had its best result in 11 years up 14%, while Office 365 subscription sales were up 17% according to their latest quarterly filings.
The big US company’s posted double-digit growth delivering $49.4 billion in revenue and net income of $16.7 billion.
Revenue is up 18 percent overall, while profits climbed 8 percent year over year.
Microsoft is crediting a chunk of this quarter’s growth to the cloud, with server and cloud services revenue up 29 percent specifically, and Microsoft Cloud up 32 percent to $23.4 billion.
While the PC industry has started to decline from its pandemic highs, it was flagging Chromebook sales — not Microsoft Windows machines — that were responsible for the entirety of the recent dip.
Meanwhile, the Xbox just had its best sales in 11 years, beating Sony’s PS5 that is facing major supply problems.
Microsoft claims its “more personal computing” business, including Windows and Xbox, was up 11 percent to $14.5 billion in Q3 — and “Windows OEM revenue growth,” which should include the price manufacturers pay to put Windows 11 on the laptops and desktops you buy, was up 11 percent specifically.
Xbox hardware revenue was up 14 percent, with a 4 percent jump for Xbox content and services revenue “driven by growth in Xbox Game Pass subscriptions and first-party titles,” for an overall 6 percent boost for gaming revenue to $3.74 billion.
The Companies cloud-based Office 365 business division delivered 17 percent revenue growth with Office up 12 percent and 11 percent in the commercial and consumer divisions, respectively.
Office 365 is now at 58.4 million consumer subscribers, up 2 million over last quarter and up 8 million since this time last year. “Intelligent Cloud” revenue was up 26 percent overall to $19.1 billion.
And LinkedIn is still experiencing dramatic growth, up 34 percent this quarter, after growth of 37 percent, 42 percent, and 46 percent the three previous quarters, respectively.
Microsoft’s Surface devices which are available at JB Hi Fi and The Good Guys was up 13 percent revenue after the company previously warned of a potential slowdown in sales.
Microsoft’s purchase of Activision Blizzard, which is set to make Microsoft the “third-largest gaming company by revenue, behind Tencent and Sony,” likely won’t feature in these earnings — the deal isn’t likely to close until next year.
We expect Microsoft will comment further on all these segments during the earnings call later this orning.
Here’s a breakdown of the gains (and one loss) for Microsoft’s individual businesses: