Microsoft is expecting revenue and operating income to grow at a double-digital pace during FY23, despite weak currency exchange rates and slowing PC demand hampering its June quarter results.

On a conference call overnight, Microsoft assured investors that currency fluctuations will only cut sales by 4 per cent for the current financial year. Shares rose 6 per cent following this assurance.

For the June quarter, Microsoft’s revenue was US$51.9 billion and increased 12 per cent. Operating income was US$20.5 billion, up 8 per cent, while net income was up 2 per cent to $16.7 billion.

Microsoft noted the unfavorable foreign exchange rate, coupled with extended production shutdowns in China that continued through May, and a deteriorating PC market in June, contributed to a negative impact on Windows OEM revenue by over US$300 million.

In addition, reductions in ad spend impacted LinkedIn, as well as Bing and news ad revenue, to the tune of over US$100 million.

Severance payments of US$113 million, plus expenses of US$126 million for the scaling down of Russian operations also impacted the quarterly earnings.

Cloud computing was the saving grace for the quarter, and will continue to be lucrative in the current financial year.

Microsoft just announced a five-year cloud deal with Telstra, in which Microsoft will become the anchor tenant on Telstra’s ultra-fast intercity fibre network, which is currently under construction.

The company boasted this was “one of the largest partnerships Microsoft has established with a telecommunications provider globally.”

“In a dynamic environment we saw strong demand, took share, and increased customer commitment to our cloud platform,” said CFO Amy Hood (pictured above).

“Commercial bookings grew 25 per cent and Microsoft Cloud revenue was $25 billion, up 28 per cent year over year.

“As we begin a new fiscal year, we remain committed to balancing operational discipline with continued investments in key strategic areas to drive future growth.”