Summary
Microsoft Corporation reported total revenue of $52.7 billion for the second quarter of fiscal year 2023, a 2% increase year-over-year, driven by growth in its Intelligent Cloud and Productivity and Business Processes segments. Net income for the quarter was $16.4 billion, a 12% decrease compared to the prior year, impacted by a $1.2 billion "Q2 charge" related to employee severance, hardware impairments, and lease consolidation. Despite a decline in the More Personal Computing segment due to weaker PC market conditions, the company demonstrated resilience with strong performance in cloud services. Microsoft Cloud revenue grew 22% to $27.1 billion, with Azure and other cloud services showing robust growth of 31%. The company continues to invest in strategic growth areas, particularly cloud engineering and AI, while also announcing significant workforce reductions impacting operating expenses. Shareholders received $10.1 billion in dividends and share repurchases during the six months ended December 31, 2022, highlighting a commitment to returning capital.
Financial Highlights
53 data points| Revenue | $52.75B |
| Cost of Revenue | $17.49B |
| Gross Profit | $35.26B |
| R&D Expenses | $6.84B |
| Operating Income | $20.40B |
| Interest Expense | $490.00M |
| Net Income | $16.43B |
| EPS (Basic) | $2.20 |
| EPS (Diluted) | $2.20 |
| Shares Outstanding (Basic) | 7.45B |
| Shares Outstanding (Diluted) | 7.47B |
Key Highlights
- 1Total revenue increased by 2% to $52.7 billion, driven by growth in Intelligent Cloud (18% increase) and Productivity and Business Processes (7% increase), partially offset by a decline in More Personal Computing (-19%).
- 2Microsoft Cloud revenue saw a substantial 22% increase to $27.1 billion, with Azure and other cloud services growing by 31%.
- 3Net income decreased by 12% to $16.4 billion, impacted by a $1.2 billion "Q2 charge" which included severance costs, hardware impairments, and lease consolidation.
- 4Diluted earnings per share (EPS) decreased by 11% to $2.20, also affected by the Q2 charge.
- 5The company announced a workforce reduction of approximately 10,000 jobs, leading to $800 million in severance expenses recognized in the current quarter.
- 6Shareholders received $10.1 billion in dividends and share repurchases during the six months ended December 31, 2022.
- 7A change in accounting estimate regarding the useful lives of server and network equipment increased operating income by $945 million and net income by $768 million for the quarter.