Microsoft shared, on October 25, its financial statement for the first quarter of its new fiscal year 2023, from July to September. The tech giant unveils its weakest growth since March 2017. A slowdown caused by the complicated context in which companies in the industry operatehit by falling demand and the strengthening US dollar.
Declining growth for Microsoft
Microsoft registered an 11% increase in revenue, generating $50.1 billion during its first quarter of 2023. At the same time, however, net profits fell by 14% compared to the same period of the previous year, reaching $17.6 billion. According to the New York Times, the strengthening of the US dollar following the war in Ukraine and economic difficulties in the UK cut company revenue by $2.3 billion.
Windows operating system sales on new computers decreased by 15%. A weakening justified by a declining PC market worldwide. Industry experts estimate that the number of purchases of these devices is expected to fall 9.5% over the full year of 2022.
Azure, Microsoft’s cloud service, continues to grow with a 35% increase in turnover, a little below the expectations of American society. An ambition based on a strong migration of professionals to cloud offers of the company. Amy Hood, Microsoft’s chief financial officer, told investors that if they had to expect a slowdown in this growth of at least 5 percentage points for the current quarter. In total, cloud revenues grossed $25.7 billion to Microsoft in the past three months.
Subscriptions to the Microsoft Office suite, soon to be renamed Microsoft 365, grew by 13% to reach 61.3 million users. Supported by growth in LinkedIn and Office and Consumer Products Division, Microsoft’s productivity and business process arm generated $16.5 billion of recipes.
Finally, the revenues of Microsoft’s gaming part increased by 4%. Xbox sales increased by 13%. Satya Nadella, Chairman and CEO of Microsoft, pointed out that ” nearly half of Xbox Series S buyers are new to our ecosystem “. In contrast, Xbox game sales fell 3% this quarter.
When presenting these results, Microsoft indicated that the company should continue to encounter difficulties for the second quarter of its financial year 2023. Amy Hood said the company will continue to invest in strategic areas while keeping an eye on spending. Moreover, Microsoft does not intend to recruit more staff and even plans to dismiss a thousand employees, or 1% of its workforce.