Microsoft Surface, Windows, and Seach revenue for FY22 Q2 blows past own expectations in a massive quarter

Source: Daniel Rubino / Windows Central

What you lot need to know

• Microsoft's More Personal Calculating beat expectations with 17.47 billion in revenue.
• Surface revenue grew by 8%, driven by Surface Laptop, despite expectations of a "single-digit decline" in revenue due to supply chain issues.
• Windows OEM licensing was up past a massive 25%, driven by connected growth in the PC market place.
• Search and news advertising acquirement grew 32% with improved customer advertisement spend.

Update January 25, 2022, at half-dozen:25 p.1000. ET: Comments from Microsoft's FY22 Q2 earnings call have been added to the cease of this report.

Microsoft reported its FY22 Q2 earnings this afternoon, and it was a doozy. The company reported overall revenue was $51.7 billion upward 20% over the same period in 2022.

Under the More Personal Calculating division, which includes Windows licensing, Surface, Xbox, and Bing, the company reported a substantial $17.47 billion, a 15% increase of the aforementioned menstruation in 2022. Microsoft had anticipated More Personal Computing to bring in betwixt just $16.35 and sixteen.75 billion during investor guidance terminal October.

Source: Microsoft

Microsoft's Surface broke $2 billion this time in 2022. While we don't take a dollar corporeality to report (Microsoft stopped sharing those in the previous quarter), it did better than expected with viii% growth for the 2022 holiday season.

Microsoft had predicted much worse numbers during its terminal investor call, expecting a unmarried-digit decline in Surface acquirement, calling out the impact on premium devices due to ongoing supply chain issues.

Microsoft says Surface revenue was driven primarly by Surface Laptop, which is interesting.

Terminal quarter, Microsoft reported a sharp 17% decline compared to October 2022, due to those supply chain constraints.

Indeed, but recently did Microsoft kickoff running national Telly ads in the US for the new Surface Pro 8, suggesting information technology is finally getting its supply concatenation support and running. The company is likewise finally releasing LTE and business versions of its latest Surface devices, besides as expanding Surface Laptop Studio to other countries like the United kingdom of great britain and northern ireland.

Surface Laptop Studio has barely launched in well-nigh countries. Source: Daniel Rubino / Windows Cardinal

Surface Laptop Studio, so far, has just launched in the U.s.a. and Canada, only information technology is expected to launch in 47 other markets in the coming months.

Turning to Windows OEM licensing, Microsoft expected growth this quarter in the "low to mid-teens" in its contempo guidance. Today, it reported that revenue was upward by 25%, blowing by its expectations.

The news lines upward with OEM acquirement from more than significant PC makers like Dell, Lenovo, and HP, who all beat estimates and prepare records for their most recent quarters. It also accords with reports from Canalys and Gartner that 2022 was the best twelvemonth for PC shipments since 2022, even despite a slight dip during the recent holiday season.

During last quarter's investment call, Microsoft CEO Satya Nadella notes a "structural shift in PC demand" due to the pandemic. Microsoft CFO Amy Hood remarked that Windows OEM revenue was "stronger than expected" due to commercial involvement with higher rev per Windows license.

Windows Commercial Products, which includes Microsoft 365, was also upwardly by a salubrious xiii% compared to twelvemonth-over-year (YoY).

Search, and news advertising related to Bing and MSN.com had its revenue abound by a whopping 32% with "improved customer advertizement spend."

Finally, Xbox and gaming were as well up 8% in acquirement YoY with steady growth for Xbox beyond hardware, games, and services.

What's next

During the investor call, Microsoft delivered its forward-looking statement. It expects Surface acquirement to grow adjacent quarter (FY22 Q3) in the "mid-teens" driven by the need for premium devices. Windows OEM acquirement growth is also expected in the "high unmarried digits." Overall acquirement for the entire More Personal Computing sectionalisation is anticipated to range from $14.15 to $14.45 billion. If accurate, that would exist up from $13 billion in the same menstruation for 2022.

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Source: https://www.windowscentral.com/surface-windows-fy22-q2-revenue-report

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