What you need to know
- Microsoft has released its FY 2023 Q4 earnings report today.
- More Personal Computing generated $13.9 billion which is a decrease of 4%.
- Both Windows OEM and Surface (Devices) revenue were down, while cloud services and Xbox divisions saw revenue increases.
- The drops in revenue continue a trend from previous financial reports.
Microsoft has reported today that the company is continuing to the feel the sting of the shrinking PC market. In an earnings report for investors Microsoft revealed that revenue for the corporation had increased 8% for the period ending June 30, but the news for the More Personal Computing division was a bit bleaker.
More Personal Computing—which includes the Microsoft Surface family of products, as well as Windows, Xbox and Bing—reported $13.9 billion in revenue for Q4, a decrease of 4% or $556 million. While Bing and Xbox both saw increases in revenue, Windows OEM and Surface Devices both were hit sharp drops. According to Microsoft, Windows OEM revenue decreased by 12% while Devices, which refers to Surface products, was down 20% or $339 million.
Despite the decline in Windows OEM and Devices the report wasn't all bad. Windows Commercial products and cloud services saw a boon in revenue, increasing 2%. Search and news advertising, including Bing, also saw a bump in revenue totaling an 8% increase. AI revenue further bolstered Microsoft's earnings report, allowing the company to share its strongest quarter ever despite the drops in Windows and Devices revenue.
The sharp decline in revenue for Windows OEM and Surface products continues an ongoing battle for Microsoft as it struggles with a dwindling PC market in the wake of the COVID-19 pandemic, though Microsoft acknowledges the offset in Windows OEM revenue may be in part due to an uptick of approximately 7% in revenue thanks to early back-to-school sales.
Windows Central's Take
The PC market has been in a bit of a tailspin since the COVID-19 pandemic, enjoying a rush of sales as people scooped up computers and laptops for remote work and virtual classrooms. The drop off from that pandemic-motivated purchasing spree has been brutal on the earnings report for these devices, even though it continues to remain higher overall.
There doesn't seem to be much Microsoft can do to ride out this wave except to focus on other areas of growth—Gaming, cloud and AI in particular— while the PC market finds its new normal.
