Microsoft beats estimates with $56.5 billion revenue and $26.9 billion operating income

Microsoft yesterday announced the financial results for the quarter ended September 30, 2023. Microsoft was able to beat analyst estimates with revenue of $56.5 billion (up 13% YoY), operating income was $26.9 billion (up 25%) and net income was $22.3 billion (up 27%). The EPS was $2.99 (up 27%). These strong results were driven by Microsoft Cloud revenue of $31.8 billion, up 24% YoY.

You can find the business highlights below:

Revenue in Productivity and Business Processes was $18.6 billion and increased 13% (up 12% in constant currency), with the following business highlights:

• Office Commercial products and cloud services revenue increased 15% (up 14% in constant currency) driven by Office 365 Commercial revenue growth of 18% (up 17% in constant currency)
• Office Consumer products and cloud services revenue increased 3% (up 4%in constant currency) and Microsoft 365 Consumer subscribers grew 17% to 76.7 million.
• LinkedIn revenue increased 8%. LinkedIn session grew 12% with record engagement.
• Dynamics products and cloud services revenue increased 22% (up 21% in constant currency) driven by Dynamics 365 revenue growth of 28% (up 26% in constant currency)

Revenue in Intelligent Cloud was $24.3 billion and increased 19%, with the following business highlights:

• Server products and cloud services revenue increased 21% driven by Azure and other cloud services revenue growth of 29% (up 28% in constant currency). Enterprise Mobility installed base grew to over 259 million seats.

Revenue in More Personal Computing was $13.7 billion and increased 3% (up 2% in constant currency), with the following business highlights:

• Windows revenue increased 5% with Windows OEM revenue growth of 4% and Windows Commercial products and cloud services revenue growth of 8%
• Devices revenue which includes Surface and Xbox hardware decreased 22%. Especially, Xbox hardware revenue decreased 7%.
• Xbox content and services revenue increased 13% (up 12% in constant currency)
• Search and news advertising revenue excluding traffic acquisition costs increased 10% (up 9% in constant currency)

“With copilots, we are making the age of AI real for people and businesses everywhere,” said Satya Nadella, chairman and chief executive officer of Microsoft. “We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.”