Microsoft reported its strongest financial quarter to date after becoming a $3 trillion company.
News research and advertising revenue rose 8% year-over-year, excluding traffic acquisition costs that Microsoft pays publishers. However, despite the increase in search and news advertising revenues they marked a slowdown in growth compared to the 10% increase in the previous quarter.
LinkedIn revenue also increased 9%, and overall Productivity and Business Process revenue increased 13% to $19.2 billion.
Meanwhile, total sales for the three-month period ending December 31, 2023 generated $62 billion for Microsoft, an 18% year-over-year increase, with net income up 33% to $21.9 billion.
Successful drivers. Microsoft’s success was driven by Office and cloud revenues, which account for nearly 60% of the company’s overall revenue. In addition, the tech giant’s revenue from Xbox games and services increased 61% compared to last year, mainly because Xbox acquired Activision Blizzard, increasing total gaming revenue by 49%.
Why we care While Microsoft did well overall, the money the tech giant makes from search and news advertising didn’t increase as much in the last quarter. LinkedIn’s revenue, on the other hand, remained flat, which could indicate that LinkedIn is delivering stronger results than other Microsoft platforms.
What Microsoft says. Microsoft Chairman and CEO Satya Nadella said in a statement:
“We’ve gone from talking about AI to applying AI at scale.” “By introducing AI at every layer of our technology stack, we’re winning new customers and helping drive new profits and productivity gains across industries.”
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Earnings report. Read the full text from Microsoft Performance Q2 report for more information.
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