Microsoft Cloud Strength Drives Fourth Quarter Results
Microsoft Corp. announced the results for the fourth quarter and full fiscal year 2022, as compared to the corresponding period of last fiscal year. Revenue was $51.9 billion and increased 12%, operating income was $20.5 billion and increased 8%, and net income was $16.7 billion and increased 2%. Diluted earnings per share was $2.23 and increased 3%.
“In a dynamic environment we saw strong demand, took share, and increased customer commitment to our cloud platform. Commercial bookings grew 25% and Microsoft Cloud revenue was $25 billion, up 28% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “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.”
Impact of Recent Events
In the fourth quarter of fiscal year 2022, evolving macroeconomic conditions and other unforeseen items had an impact on financial results beyond what was included in our forward-looking guidance provided on April 26, 2022.
· Unfavorable foreign exchange rate movement within the quarter negatively impacted revenue and diluted earnings per share $(595) million and $(0.04), respectively.
· 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 of over $(300) million
· Reductions in advertising spend contributed to a negative impact on LinkedIn as well as Search and news advertising revenue of over $(100) million
· With the ongoing war in Ukraine, we made the decision to significantly scale down our operations in Russia. As a result, we recorded operating expenses of $126 million related to bad debt expense, asset impairments, and severance.
· As part of a strategic realignment of our business groups, we recorded employee severance expenses of $113 million, excluding Russia
Revenue in Productivity and Business Processes was $16.6 billion and increased 13%, with the following business highlights:
· Office Commercial products and cloud services revenue increased 9% driven by Office 365 Commercial revenue growth of 15% (up 19% in constant currency)
· Office Consumer products and cloud services revenue increased 9% and Microsoft 365 Consumer subscribers grew to 59.7 million
· LinkedIn revenue increased 26%
· Dynamics products and cloud services revenue increased 19% driven by Dynamics 365 revenue growth of 31%
Revenue in Intelligent Cloud was $20.9 billion and increased 20%, with the following business highlights:
· Server products and cloud services revenue increased 22% driven by Azure and other cloud services revenue growth of 40%
Revenue in More Personal Computing was $14.4 billion and increased 2%, with the following business highlights:
· Windows OEM revenue decreased 2%
· Windows Commercial products and cloud services revenue increased 6%
· Xbox content and services revenue decreased 6%
· Search and news advertising revenue excluding traffic acquisition costs increased 18%
· Surface revenue increased 10%
Microsoft returned $12.4 billion to shareholders in the form of share repurchases and dividends in the fourth quarter of fiscal year 2022, an increase of 19% compared to the fourth quarter of fiscal year 2021.
Fiscal Year 2022 Results
Microsoft Corp. today announced the following results for the fiscal year ended June 30, 2022, as compared to the corresponding period of last fiscal year:
· Revenue was $198.3 billion and increased 18%
· Operating income was $83.4 billion and increased 19%
· Net income was $72.7 billion GAAP and increased 19%, and $69.4 billion non-GAAP and increased 15%
· Diluted earnings per share was $9.65 GAAP and increased 20%, and $9.21 non-GAAP and increased 16%
· GAAP results include a $3.3 billion net income tax benefit explained in the Non-GAAP Definition section below