In the second quarter, Microsoft earned $ 52.7 billion. Windows and Xbox performed poorly, in contrast to the cloud Aroged

In the second quarter, Microsoft earned $ 52.7 billion. Windows and Xbox performed poorly, in contra ...

Microsoft has issued its financial report for the second quarter of 2022, citing large-scale layoffs in the company. The software company generated $52.7 billion in revenue (up 2%) and net income of $16.4 billion (down 12%).

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According to Canalys' analysis, Windows OEM revenue and hardware had previously predicted a difficult quarter for the business. PC shipments fell 16% in 2022, and Gartner reported a nearly 29% year over year decline in the fourth quarter.

Microsoft claims that this decline in Windows OEM revenue is attributed to "the weakness of the PC market" and "a good year."

The decline in the PC market has impacted Microsoft's device revenue (down 39%), which now includes HoloLens (augmented/mixed reality headset) and PC and Surface accessories.

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According to Microsoft CFO Amy Goode, the PC market would not improve in the next quarter, with an average 40% decline in device revenues.

Microsoft is canceling $1.2 billion in Q2 revenue as a result of these changes, layoff costs, and rental consolidation costs.

The job losses in Microsoft's HoloLens division have been particularly severe after former HoloLens director Alex Kipman left the company following allegations of misconduct and Microsoft reportedly dropped plans for HoloLens 3.

The Xbox did poorly this quarter, owing to a "strong performance" from the previous year, which was "partially offset by growth in Xbox Game Pass subscriptions."

Microsoft sold fewer Xbox Series S/X consoles during the holidays than at higher prices during the same period in 2022, according to the Xbox Game Pass revenue decline.

Microsoft announced that Xbox Game Pass subscribers would reach 25 million last year, but the company hasn't provided further information since. In October, Microsoft Gaming CEO Phil Spencer said the console service's user growth had stalled.

Spencer said that Xbox Game Pass would continue to make up about 10 to 15 percent of Microsoft's Xbox revenue and that the service was profitable.

After weeks of discussions about Call of Duty's future, Microsoft is still reeling from negative regulatory sentiment. The European Commission has launched an "in-depth inquiry" into the deal, which it intends to complete in fiscal 2023 (end June).

Gaming revenue is expected to decrease "high single digits," while Xbox content and services revenue will decrease "low single digits."

In the second quarter, Microsoft Office, cloud, and server products generated significant revenue. Compared to the previous year, total intelligent cloud revenue increased by 18%; Server products and cloud services revenue increased by 20%, while Azure and other cloud services revenue increased by 31%.

Microsoft has also increased its investment in OpenAI, and intends to integrate ChatGPT into its own search engine, Bing, in the coming months. Through a long-term partnership, Microsoft will become the exclusive cloud partner for OpenAI, where the corporation's services will power all of the startup's workloads in products, API services, and research.

Microsoft is rumored to be able to eat 75% of OpenAI's profit until it recovers its investment.

Microsoft 365 subscriptions increased by 12% this quarter, to a total of 63.2 million. In January, the company launched a new Microsoft 365 Basic subscription for $1.99, which is expected to affect subscribers in the next quarterly reports.

Microsoft Teams attracted more than 280 million monthly users in the previous quarter, and Nadella said the company is "continuing to increase its share in all areas, from collaboration to meetings and calls."

Commercial Office products and cloud services revenue increased by 7%, while Office 365 commercial revenue increased by 11%. LinkedIn revenue increased by 10% year over year, while search and news advertising revenue increased 10%.

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