Jan 24, 2023 - Technology

Microsoft quarterly sales show slowest growth in years

Ina Fried

Microsoft CEO Satya Nadella, speaking ất the company's Ignite conference — Microsoft CEO Satya Nadella. Photo: SeongJoon Cho/Bloomberg via Getty Images

Microsoft on Tuesday reported its slowest quarter of sales growth in six years as the company deals with a cooling economy and a slowing PC market. Quarterly revenue of $52.7 billion came in slightly below Wall Street estimates, though its adjusted per-share earnings slightly topped expectations.

Between the lines: Its earnings report comes less than a week after Microsoft said it was cutting 10,000 employees, or less than 5% of its staff. Microsoft also announced in recent days it is investing billions more in OpenAI to incorporate that company's generative AI products like ChatGPT and Dall-E into various Microsoft products.

By the numbers:

Revenue was $52.7 billion, up 2% from a year ago and below analysts' expectations of about $52.9 billion.
Per-share earnings, excluding certain items were $2.32, ahead of estimates of around $2.30.

On a segment-by-segment basis:

Server product and cloud revenue was up 20%, with Azure and other cloud services up 31%.
Commercial sales of Office were up 7%, while the consumer side of Office was down 2%.
Windows revenue from PC makers as well as Microsoft's own Surface devices were both down 39%.
Revenue from search and advertising, as well as LinkedIn, were both up 10%.
Xbox content and services revenue was down 12%. Xbox hardware was down 13%.

Shares of Microsoft rose in after-hours trading following the earnings report, changing hands recently at $251.25, up $9.21 or nearly 4%.

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Microsoft quarterly sales show slowest growth in years

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