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Microsoft FY22 Q3 earnings: $49.4 billion in revenue, beating expectations

Microsoft Logo 2022
Microsoft Logo 2022 (Image credit: Daniel Rubino / Windows Central)

What you need to know

  • Microsoft just released its FY22 Q3 earnings report.
  • The company brought in $49.4 billion in revenue during the quarter, which is an increase of 19%.
  • Microsoft's net income was $16.7 billion, which is an increase of 8% GAAP.
  • Windows Commerical products and cloud services revenue increased 14% year-over-year.

Microsoft just released its earnings report for FY22 Q3 (opens in new tab) (the third quarter of the 2022 fiscal year). The company saw an overall revenue increase of $49.4 billion (19% YoY) and a net income increase of $16.7 billion (8% GAAP). Microsoft's overall revenue of $49.4 billion beat the expectation of $49.05 billion, according to Refinitiv (via CNBC).

Here are some of the biggest highlights of the report:

  • Revenue was $49.4 billion and increased 18%
  • Operating income was $20.4 billion and increased 19%
  • Net income was $16.7 billion and increased 8% GAAP (up 13% non-GAAP)
  • Diluted earnings per share was $2.22 and increased 9% GAAP (up 14% non-GAAP)

"Continued customer commitment to our cloud platform and strong sales execution drove better than expected commercial bookings growth of 28% and Microsoft Cloud revenue of $23.4 billion, up 32% year over year," said Executive Vice President and Chief Financial Officer of Microsoft Amy Hood.

Business highlights

Consumer growth was expected to be in the high single digits, meaning Microsoft beat expectations with an 11% YoY increase.

Microsoft's Productivity and Business Processes revenue was $15.8 billion, an increase of 17% year-over-year. That beat industry expectations of $15.75 billion. Here are the company's business highlights:

  • Office Commercial products and cloud services revenue increased 12% (up 14% CC) driven by Office 365 Commercial revenue growth of 17% (up 20% CC)
  • Office Consumer products and cloud services revenue increased 11% (up 12% CC) and Microsoft 365 Consumer subscribers grew to 58.4 million
  • LinkedIn revenue increased 34% (up 35% CC)
  • Dynamics products and cloud services revenue increased 22% (up 25% CC) driven by Dynamics 365 revenue growth of 35% (up 38% CC)

Revenue in Intelligent Cloud went up 26% YoY, hitting $19.1 billion in the quarter.

  • Server products and cloud services revenue increased 29% (up 32% CC) driven by Azure and other cloud services revenue growth of 46% (up 49% CC)

Personal computing revenue was $14.5 billion, marking an increase of 11% compared to the previous year. That also beat expectations, which were $14.27 billion, according to StreetAccount consensus.

  • Windows OEM revenue increased 11%
  • Windows Commercial products and cloud services revenue increased 14% (up 19% CC)
  • Xbox content and services revenue increased 4% (up 6% CC)
  • Search and news advertising revenue excluding traffic acquisition costs increased 23% (up 25% CC)
  • Surface revenue increased 13% (up 18% CC)

What's next

Microsoft CEO Satya Nadella will join other Microsoft higher-ups in an investor call at 2:30 PM Pacific time (5:30 PM Eastern time) today, April 26, 2022. You can watch the webcast through Microsoft's investor portal (opens in new tab).

We'll update this post following the earnings call.

Sean Endicott
News Writer and apps editor

Sean Endicott brings nearly a decade of experience covering Microsoft and Windows news to Windows Central. He joined our team in 2017 as an app reviewer and now heads up our day-to-day news coverage. If you have a news tip or an app to review, hit him up at sean.endicott@futurenet.com (opens in new tab).

27 Comments
  • It's insane how much LinkedIn keeps growing. That purchase looks like genius now.
  • Awesome ! Now take a billion and put windows 11 on the surface duo and watch sales skyrocket!!
    Please
  • Nothing will make sales of that device skyrocket.
  • $16B net profit?
    (After paying for Nuance.)
    Times 5 = $80B.
    A bit more than the price the price of Activision, expected to close next June.
    Looks like they won't have to break the piggy bank just yet.
    (But the hardware shortages look to be biting them.) No sign of slowing down just yet.
  • We used to talk about the military industrial complex dominating the socio-economic direction of a nation. But now we should talk about the information entertainment complex dominating the socio-economic direction of a nation. We can talk about the lock downs and the Chinese insistence on zero covid. We can talk about Russia's desire to return to the Russian empire and control most of eastern Europe. If you take Apple, Microsoft, Google, IBM, Intel, Oracle, and the many other companies providing goods and services to the World's population, you can see how Putin and Xi do not control a large segment of the world's GDP. Further, I do not think they can control the policies that drive MSFT long term investments and market performance. Out of 150 plus countries, many will simply allow MSFT to deliver their services without too much push back. $18 billion in three months. Add in everyone else in the cloud/info/computer/gaming industry sectors, and these companies will earn a profit greater than almost every country in the world generates in GDP. In ten years is MSFT earning $50 billion every 3 months? That is just a ton of money. And by the way, what happens to Russia if MSFt and others just simply turn off the data centers in and serving Russia?
  • That last already happened.
    Worse for Russia, they tried to stop Starlink over Ukraine by jamming and by hacking and SpaceX stopped them cold. In hours. Russia blustered about their importance to the Space station and SpaceX responded by launching their reusable "broomsticks" a half dozen times in a month.
    New age, new rules. Of note, MS was the first cloud services provider to team up with SpaceX. Google quickly followed. AWS can't and they won't be able to offer the same kind of service until Amazon's Kuiper is functional. If ever.
    So for now MS has the high ground in their contest with AWS. No end in sight to that growth. Microsoft is moving into a whole different realm than any other tech company except, perhaps Tesla and SpaceX; they are so far ahead of their competitors it'll take them years to get even close to where tbey are now and by then...? The scariest part isn't the necessarily the $50B gross or even the $16.7B net by themselves but the productivity the two numbers reveal: 33% profit margin at that scale? At some point tbey're going to run out of things to productively invest that cash flow.
  • I was not talking about $50 billion gross a quarter in ten years. I was talking about $50 billion net profit every three months in 10 years. Did not know those facts about Starlink and MSFT's work with SpaceX. thanks
  • I know.
    But as far as I'm concerned, today's numbers are scary enough. 😮
    Your projection of $200B net a year is a buffer overflow.
    Again, how are they going to spend that? Buy AMD? ASML?
  • MSFT does not spend the money. They invest funds in creating more goods and services for customers. I will get a better Computer. More productive software services. More importantly they will return capital to stockholders. They will pay me dividends.
  • Agreed.
    Do note the phrase "productively spend".
    As in buying Bethesda and Activision but avoiding UBISOFT (for now).
    MS spends with an eye to improving their bottom line, usually by adding festures or service, or skills. (Like buying NUANCE.)
  • Judging by revenue (which may not be the right measure, admittedly), Microsoft is 1% of the massive US economy ($200B out of $20T). That is huge. Why can't other countries make tech companies as successful as Microsoft, Apple, and Amazon? Why do their companies "need" so much government support? (The extent to which Amazon benefits from tax support has been exaggerated; they'd have become huge without it.) Here's another question: With politicians who openly threaten free discourse, independent business, and science, will the innovation of the past and present continue in the US?
  • First since MSFT and many large US corporations have global operations, it would be best to measure MSFT revenues as a percentage of Global GDP. In this measure, MSFT really is an insignificant institution in human activities. The US has historically provided the least government intrusion in human activities. We provide liberty. Many countries have adopted liberal institutions which has allowed companies like MSFT to conduct business around the world. But the US still possesses the largest free market cohesive market in the World. Setting up US operations provides access to a large opportunity. Politicians have always threaten liberty by seeking government power. But the US system of the separation of powers ensures politicians have the least ability to impose tyranny on the country. Does not always prevent government intrusion in markets and suppress liberty, but on the whole we do a pretty good job of preserving liberty.
  • Good questions.
    Complicated answers.
    First, MS is a global company with a presence in over a hundred countries. Most sites are support but they have R&D and software development in most of the bigger ones. Look at the distribution of tbeir gaming studios. So it's not just American brains working for MS. Second, MS has a strong H1B VISA program that lets them import talent as needed. They provide dedicated assistance to help employees get Green Cards and, if desired, citizenship. All by the letter of the law. They treat their people well, usually paying well above average. They can afford it and it helps retain talent without violating antitrust. (See Apple, Adobe, et al) Third, they have history on their side: they had the first mover advantage (Bill Gates wrote the first functional BASIC for the first commercial microcomputer, the ALTAIR) and never lost it. Gates actually brought in experienced corporate management (from Proctor&Gamble of all placex) early on. (Apple, likewise started out with corporate investors from day one.) Fourth, they have vision ( "a computer in every home and MS software on every computer" was the first,back in 1978) and the courage to stand by their strategy whether it be fighting IBM at its height, resisting a political antitrust trial (they *were* right, an OS shipping without a browser is useless), switching their core business from discrete sales to subscriptions, and building out a robust cloud operation early, or most recently, investing heavily in disrupting gaming both on PCs and Consoles. Fifth, the US has a highly developed system of venture capital that understands tbat not every project succeeds, but the ones tbat do outproduce the ones that don't, so competent startups don't often get strangled by lack of resources. Or politically connected competitors or bureaucratic regulation. Smart companies play by the rules. It pays off in the long run. Plys, until now, the US has never been afraid of big companies that succeed on merit. (That may change.) All this and more comes from a relentless desire to do better. Even at their worst, under Ballmer, tbe company grew and expanded its scopd, always profitably. They were "firstest with tbe mostest" and have never looked back or settled down to counting their money. As to other countries, notably Europe, this explains it best: https://www.youtube.com/watch?v=zSU5MFPn6Zk Fundamentally, US entrepreneurial capitalism offers people a fertile environment to build businesses into empires to tbe limit of their vision and competence. (MS is not unique; look up Elon Musk's career starting with literally nothing and ramping up tbrough a half dozen businesses--building and selling--to be tbis wedk's richest person, all in pursuit of a vision other than just making money). And you are correct to worry about tbe future given the outcry from loudmouthed politicians promoting tbe idea that "too much success" is bad, tbat it can't possibly be achieved honestly, that government *must* take from the productive to give to the unproductive (to buy votes and power). They are being resisted but they are just the tip of an iceberg of marxist ideologues entrenched in academia trying to institutionalize tbeir autocratic ideals. Tough times are coming all decade (the "Crisis of tbe 20's has been repeatedly predicted for a couple of decades) so tbey might actually succeed in destroying the American entrepreneurial culture and with it tbe current golden age of tech. This might be the peak era of tech...
    ...or it might be the prelude to a whole new era of higher tech. TBD.
  • While I appreciate the comments above, neither of you really caught onto that last question. Last time I checked, bullying corporations to toe a political line is a direct threat to capitalism. The party that is doing that is called the Republican Party.
  • Insane amount of money
  • Are we still firing the CEO? 🤔
  • lol "bUt mAh WiNdowS PhOnE!"
  • I'm still waiting for a response from "you know who" about how Microsoft has been "bumbling" 😂
  • Never said they don’t make money, the enterprise bit certainly does. Doesn’t mean they don’t bumble certain projects.
  • If you never fail, you're not doing it right.
    Nobody is perfect but maximum growth only comes from taking big risks. (Usually before being forced into "bet the company" hail Marys.)
    If anything, a lot of MS failures have come out of failing to stick with the internzl effort (Windows CE, MSReader, Neo?, etc ). Fewer from bad acquisitions like Nokia. MS does their best when tbey push the market rather than reacting to somebody else.
    Like GamePass. That is already pushing $100B but that shoukd deliver double or more over a decade.
  • Right, I agree, unless you are failing because you make obviously dumb decisions and not learning from them. After doing something that didn’t work at all (Duo 1), Microsoft didn’t make any meaningful changes and tried again (Duo 2). Now they are surprised it didn’t work and cancel the next version, which I assume had no meaningful changes from either of the failures. After Duo 1 didn’t work, they needed to make big changes before coming back to market. They had the same issue with WP7. When it performed so poorly, they should have went back to the drawing board and tried something else. Instead they made no perceptible changes and released WP8. I assume, like Gates said about WP, Duo doesn’t have anyone paying much attention to it. It is someone’s pet project and doesn’t actually have the company behind it.
  • :-) Still miss mine. :-) I can't help but wonder had they had put a bit more effort/money/advertising into some of there other products such as Win phone, Band, Hololens, would they have been an even bigger power house now. "You love us in the office? Go ahead, take us home"
    As I have stated before, I am also a small share holder, so I certainly can't complaining about the growth, but I read articles about some of their bumbling on things (one right here a few months back BTW :-) ) and I can't help but SMH. How can they do some things so very right and then with other things not just fail, all companies do that, but fail so spectacularly?
  • From my view, a company can't always be all things. With respect to WP, MS put a massive amount of resources and effort to try and get windows phone to work, When was that going to pay off? If you can't answer that, then it's hard to justify keeping a product going. Also coming from Microsoft stores, I can tell your, while I liked the Band. We would exchange dozens of Band 2 daily for all sorts of defects. Multiply they by every MS store or place offering exchanges, and I'm sure MS was bleeding money on quality issues with that. IMO that's why they just canceled the 3. The only major mistake I feel MS did with the phone, was trying to leverage the old model of exclusivity between the carriers, as well as taking too long to offer carrier financing. If people simply could choose any of the WPs on the market regardless of carrier and had the flexibility of financing, it may have seen better adoption
  • It wasn’t up to Microsoft which carriers sold their phones. Back in that day, even Samsung couldn’t force the carriers. Remember all the different models of the Galaxy S2? That was the only way Samsung could get each carrier to sell them. I think it was the Galaxy S3 that was the first time all the carriers had the same device. None of the other manufacturers were able to do that. Even today it is just Apple and Samsung that is universal across carriers. Microsoft themselves said what the issue was. They didn’t put effort into Windows phone. It was always half baked as they were concentrating on anti-trust issues instead.
  • The amount of money they spent on marketing Windows phone was huge, it was half a billion one year! Marketing only gets you so far though, the product has to perform when you get it home. It doesn’t matter how much the advertise, if the product is half baked, it won’t be sustainable.
  • $500m is peanuts in tbat market.
    In 2015 Apple spent $1.8Billion. By now tbey're over $2B.
    (Last year they spent $500m on Apple TV alone and that is their least productive effort.)
    MS was coming from behind: they needed to spend more.
  • It was beyond over by 2015. WP had no chance after WP7 flopped, especially since WP8 didn’t have any meaningful changes. Apple could afford that budget in 2015. In 2010/2011, the iPhone marketing budget was similar to Windows Phone, and possibly less once you add all Microsoft’s partners in. The issue wasn’t marketing. WP just sucked. It may have been a good idea, but Microsoft didn’t get it done well.