Microsoft Surface revenue is up 10%, while Windows rev is down 2% for FY22 Q4

  • Microsoft brought in $14.36 billion in more personal computing, just below forecast, for FY22 Q4
  • Surface revenue grows 10%, driven by commercial sales
  • Windows OEM revenue fell 2% due to May “shutdowns” and deteriorating PC market
  • Search and news advertising grew 18%, just below the 20% forecast

Microsoft released its results for the fourth quarter of fiscal year 22 (opens in a new tab) today reporting total revenue of $51.9 billion (up 12% year-over-year), just below the $52.4 billion estimate, marking one of the first times the company failed to exceed Wall Street expectations.

In More Personal Computing, which includes Surface, Windows, Bing, and more, revenue was $14.36 billion, below the estimated $14.65-14.95 billion forecast on the call. to the results of the last quarter. Still, the number is up 2% year over year, with Microsoft grossing $14.09 billion in 2021.

(Image credit: Microsoft)

Windows OEM was down 2%, as PC production shutdowns in China hampered the release of new PCs announced earlier this year at CES. These constraints have now been corrected as many of these laptops now come with Intel 12th, Qualcomm 8CX Gen 3 and the latest AMD chips. However, Microsoft estimated that Windows OEM growth in the lower to mid-single digits was “driven by the continued transition to a commercial-dominated PC market where revenue per license is higher.”

For Surface, things weren’t quite so bad. Microsoft had expected “low double-digit” revenue growth, and it hit 10%, year-over-year, hitting the low end of that estimate. Commercial purchases instead of consumers primarily drove Surface sales, according to Microsoft.

Search, including news advertising, grew 18%, below the 20% forecast last quarter. Microsoft notes that search revenue was negatively impacted by “reductions in customer ad spend,” likely due to concerns about inflation and a possible recession.

Games, including Xbox, saw declines, but were in line with last quarter guidance.

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Steven L. Nielsen