Microsoft has released its FY 23 second quarter results that ended December 31, 2022, reporting a net income of $16.425 billion representing a 12.47% decline from the N18.765 billion reported same period in FY 22.
Revenue (GAAP)
2022/23 Q2: $52.747 billion
2021/22 Q2: $51.728 billion
Change: +1.97%
Cost of Revenue (GAAP)
2022/23 Q2: $17.488 billion
2021/22 Q2: $16.960 billion
Change: +3.11%
Gross Margin (GAAP)
2022/23 Q2: N35.259 billion
2021/22 Q2: N34.768 billion
Change: +1.41%
Operating Expenses (GAAP)
2022/23 Q2: $14.869 billion
2021/22 Q2: $12.521 billion
Change: +18.75%
Operating Income (GAAP)
2022/23 Q2: $20.399 billion
2021/22 Q2: $22.247 billion
Change: -18.31%
Net Income (GAAP)
2022/23 Q2: $16.425 billion
2021/22 Q2: $18.765 billion
Change: -12.47%
Diluted EPS (GAAP)
2022/23 Q2: $2.20
2021/22 Q2: $2.48
Change: -11.29%
Net Cash from Operations (GAAP)
2022/23 Q2: $11.173 billion
2021/22 Q2: $14.480 billion
Change: -22.84%
Bottom line: The decline in net income was due to higher operating expenses, driven by investments in cloud engineering, the Nuance acquisition, and LinkedIn.
- Another contributing factor to the decline was the fall in More Personal computing revenue, especially Windows OEM revenue. Windows OEM revenue, the price PC manufacturers pay Microsoft to put Windows on machines fell by a massive 39% in Q2.
- Microsoft previously forecast a tough quarter for Windows OEM revenue and hardware, and the results are clear on the state of the PC industry right now.
- And the PC market is not going to improve next quarter, either. Microsoft CFO Amy Hood provided guidance of mid to high 30% declines in Windows OEM revenue for Q3, alongside mid-40 % declines in devices revenue.