Server Products Drive Microsoft's Revenue Growth
With $52 billion in revenue and a net income of $16.7 billion generated between April and June 2022, Microsoft closed out its fiscal year on a high note and delivered its best sales performance since the start of the pandemic. While some segments like Windows, Gaming, and Office products saw a year-over-year decrease in revenue, its corporate IT offerings remain a reliable source of revenue growth, as our chart shows.
Continuing an ongoing trend, the Server and Office segments made up roughly 59 percent of the tech giant's 4Q22 revenue, two percent more than in the previous quarter. Year over year, Azure and other cloud solutions stood out as the fastest-growing subsegment with a revenue increase of 82 percent.
Microsoft's gaming branch, which saw record numbers between October 2021 and January 2022 likely due to the continued growth of Xbox Game Pass and the release of the highly anticipated new Halo game, decreased by eight percent compared to 4Q21. If the much-discussed acquisition of Activision Blizzard King is successful, this segment could potentially outperform Windows products and become the third-biggest revenue pillar for the company.
Even though the company had a successful fourth fiscal quarter, parts of its business were nevertheless impacted by Covid-induced production stoppage in China and unfavorable exchange rates. Based in part on its record-setting cloud revenue of $25 billion, Microsoft still expects "another strong quarter of revenue and share growth", but "growth moderation in [their] small and medium-sized business segment".