Microsoft spent more than expected on the development and operation of artificial intelligence-based solutions in the third business quarter, but more money also came into the coffers in the given financial period in Redmond, precisely thanks to the rise of AI and cloud solutions. Meanwhile, the company’s hardware department still can’t find itself, Surface and Xbox sales also fell.
In the three months ended March 31, Microsoft’s revenue reached $61.68 billion, a 17% year-over-year increase, while net profit was up roughly 20%, from $18.30 billion to $21.94 billion. grew.
The Intelligent Cloud business contributed the most to the increase in sales, the division collected $26.7 billion in three months, which is a 21% increase. Within the business, the Azure product family grew by 31%, of which 7 percentage points of growth is due to artificial intelligence-based solutions – the business report reveals.
The Productivity and Business Processes division, which includes Office products, LinkedIn and Dynamics, had sales of $19.6 billion in the given period, which corresponds to an increase of 12%, while, among other things, Windows, devices and the More Personal Computing business, which includes games and related services, generated $15.6 billion in sales (up 17%).
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In the third business quarter, the performance of the latter department developed remarkably in two areas. On the one hand, Windows OEM sales were able to grow to a small surprise, which is due to the slow recovery of the PC market – Microsoft expects further growth in this segment thanks to the appearance of AI PCs in the following financial periods.
In the current quarter, the company can launch its own PCs advertised with AI capabilities, the new Surfaces, which will contain Qualcomm’s brand new processors. The Snapdragon X Elite and the recently introduced little brother, the X Plus, can shake up the personal computer market to an extent not seen since the appearance of Apple’s own Arm processors – this time also on the Windows line.
Microsoft would really need this shake-up, as Surface sales fell even in the last quarter despite the presentation of the new portfolio: the sales revenue of the device division fell by 17% in its third business quarter.
It is also telling that while in the case of gaming products, Xbox services soared (turnover increased by 62%, although the inclusion of Activision Blizzard contributed significantly to this), while Xbox hardware sales fell by 31% in the quarter, undeclared due to declining console sales.
By the way, the most recent quarter shows in an extremely spectacular way how much the acquisition of Activision Blizzard brought to the kitchen for Microsoft, because without the acquisition of the game publisher, the gaming sales would have gone into a slight negative instead of the actual, 51% increase.
