TagEarnings Report

• Microsoft reported its slowest sales growth in more than six years last quarter, with revenue expanding 2% to $52.7 billion and net income falling 12% to $16.4 billion.
• Intelligent Cloud business, which includes Azure cloud-computing business, grew 18% to $21.51 billion, with Azure growing 31%.
• Microsoft’s commentary on the PC market was encouraging, with Windows OEM revenue expected to decline in the mid to high 30s, in line with the PC market, and usage intensity of Windows continuing to be higher than pre-pandemic with time spent per PC up nearly 10%.
• Azure growth moderated, particularly in December, and Microsoft expects Q3 growth to decelerate roughly 4 to 5 points in constant currency.
• Office 365 Commercial is seeing slowing seat growth, but is being offset by upselling current customers to the highest per-seat pricing plan (E5). E5 offers integrated and automated security, advanced compliance capabilities, audio conferencing and calling capabilities, and Power BI capabilities.

Published January 31, 2023
Visit Stratechery to read Ben Thompson’s original post Microsoft Earnings, Azure’s Slowdown, Office Strikes Back