Microsoft has just announced the financial results for the fourth and final quarter of its 2023 fiscal year. The company registered $56.2 billion in revenue and a net income of $20.1 billion in Q4, an increase of 8% in revenue and a 20% rise in net income.
While the revenue from Windows and devices saw another downturn this quarter, Xbox experienced a slight recovery, particularly in terms of content. The weaker PC market was compensated for by Microsoft’s continued strong performance in its cloud, office, and server divisions.
Windows and PCs
Looking at the entirety of fiscal 2023, Windows and devices revenue did not perform as well as it did in fiscal 2022.
The revenue from Windows OEM, the fee that PC manufacturers pay to Microsoft for installing Windows on their laptops and PCs, witnessed a considerable decrease throughout the fiscal year, declining in each of the four quarters. In Q4, Windows OEM revenue saw a decrease of 12%, which Microsoft attributes primarily to conditions in the PC market.
Xbox
In Q4, Xbox hardware revenue declined by 13%, which could be a sign that Microsoft is still grappling with supply chain issues and a decreased demand for its Xbox Series S/X consoles. Alternatively, it could be linked to Microsoft’s broader strategic approach of weighing the expenses of hardware against the prospects of content and cloud services.
However, revenue from Xbox content and services, encompassing Xbox Game Pass, has seen a 5% rise. Total gaming revenue also witnessed a marginal growth of 1%.
Cloud and Office
Microsoft’s cloud businesses remain the major revenue engines for the company. The number of Microsoft 365 Consumer subscribers has surged to 67 million, marking an increase from the 65.4 million reported in the previous quarter.
Revenues from Office commercial products and cloud services also expanded by 12% year over year, largely fueled by a 15% growth in Office 365 Commercial revenue. Microsoft’s intelligent cloud division recorded revenues of $24 billion this quarter, reflecting a 15% increase.
A significant factor contributing to this growth was Azure and other cloud services, which saw revenue growth of 26% this quarter, propelled by robust demand for Microsoft’s consumption-based services.
Source: The VergeÂ
