Microsoft reported that it earned a net income of $16.7 billion on revenues of $51.87 billion in the quarter ending June 30. But several of its businesses, including Windows and Xbox, took a tumble, and the results fell short of expectations.
“We see real opportunity to help every customer in every industry use digital technology to overcome today’s challenges and emerge stronger,” Microsoft CEO Satya Nadella said. “No company is better positioned than Microsoft to help organizations deliver on their digital imperative – so they can do more with less.”
But CFO Amy Hood offered up some actual insight, noting that the software giant is “committed to balancing operational discipline with continued investments in key strategic areas to drive future growth.” In other words, the company needs to do better in a challenging financial environment: Microsoft had lowered its guidance for the quarter in June, but the final results came in even lower.
Microsoft’s top two businesses, Intelligent Cloud, with $20.9 billion in revenues, and Productivity and Business Processes, with $16.6 billion in revenues, both experienced double-digit growth of 20 and 13 percent, respectively. But More Personal Computing stumbled into third place with just $14.4 billion in revenues and just 2 percent growth.
Windows revenues from PC makers declined 2 percent in the quarter, while Windows commercial products and services grew by just 6 percent, driven by demand for Microsoft 365. And Xbox revenues fell by 6 percent year-over-year. Surface revenue, curiously, was a highlight, with 10 percent growth.
Office commercial revenue was up 9 percent, while Office 365 commercial surged 15 percent. But Azure growth was just 40 percent.