Microsoft Missed Estimates In Fiscal Q4 2022, Records Lowest Revenue Growth In Two Years

Microsoft (Nasdaq: MSFT) reported on Tuesday its financial results for fiscal Q4 2022, highlighting a quarterly revenue of US$51.87 billion. The topline figure is both an increase from fiscal Q3 2022’s US$49.36 billion and fiscal Q4 2021’s US$46.15 billion.

The quarterly revenue, however, fails to beat the consensus estimate of US$52.39 billion. But it falls above the lower end of the company’s guidance between US$51.80 billion and US$52.60 billion–itself lowered twice in the past two months after the company considered the impact of changes in foreign exchange.

The increase in revenue year-on-year this quarter is also the firm’s lowest since two years ago, ending at 12.38%.

The tech firm identified a number of factors that affected its quarterly revenue, mainly the foreign exchange headwinds.

“The US dollar strengthened throughout the quarter creating an additional headwind beyond what we shared mid-quarter. As a result, for the full quarter, revenue and EPS were negatively impacted by $595 million and $0.04 cents per share beyond our expectations shared in April,” said CFO Amy Hood in the earnings call.

Breaking down the topline revenue figure, the intelligent cloud business contributed US$20.91 billion (mainly driven by Azure), productivity and business processes contributed US$16.60 billion, and personal computing added US$14.36 billion–the only revenue source item that missed the company’s revised guidance range.

Further down, the gross margin came in at 68.32% for the quarter, marginally down from last quarter’s 68.37% and last year’s 69.86%. The quarter also ended with US$16.74 billion in net income, marginally up from US$16.73 billion last quarter and US$16.46 billion last year.

The bottomline figure translates to US$2.23 earnings per diluted share, hitting on the dot the lower end of the revised guidance. Nevertheless, this failed to hit the street estimate of US$2.29 per diluted share.

The quarter also saw US$24.63 billion in generated cash flow from operations, with an increase of “8% driven by strong cloud billings and collections.” This contributed to the firm ending the quarter with a cash and cash equivalents balance of US$13.93 billion, putting the total current assets balance at US$169.68 billion.

For the whole fiscal year, the firm ended with US$198.27 billion in revenue, up from last year’s US$168.09 billion.

The annual gross margin fell to 68.40% down from last year’s 68.93%. Net income for the year came in at US$72.74 billion, up from last year’s US$61.27 billion.

For the first quarter of the next fiscal year, the firm is expecting total revenue guidance of US$49.25 billion – US$50.25 billion, a 4.1% decrease from last quarter and a 7.8% increase from last year based on the range’s midpoint.

Microsoft last traded at US$251.90 on the Nasdaq.

Information for this briefing was found via Edgar and the companies mentioned. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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