Microsoft PC, Windows, Search, LinkedIn Drive Up Revenue

Amid inflation and plummeting stock prices, Microsoft managed 20% gains in revenue to reach $51.7 billion for fiscal second-quarter results.

Search and news advertising revenue rose by 32% year-over-year (YOY).

Continued advertising market growth drove another strong quarter in LinkedIn Marketing Solutions.

LinkedIn revenue rose 37% YoY, driven by strong advertising demand.

Microsoft says LinkedIn sessions have also grown by 22%, with “record engagement,” with more than 20,000 events.

“LinkedIn has become one of the world’s largest platforms for professional events,” said Microsoft CEO Satya Nadella, during the company’s earnings call.

LinkedIn revenue rose 37%. Its Sales Solutions business surpassed $1 billion in revenue during the quarter.

The business continues to see record engagement on the platform.

Today, more than 1 million sellers turn to LinkedIn Sales Navigator to build relationships with buyers, with advertising revenue increasing 43% YoY. 

During the past 12 months, Microsoft’s total advertising revenue -- inclusive of LinkedIn -- surpassed $10 billion, excluding traffic acquisition costs.

Strong PC sales lifted revenue by 15% to $17.47 billion in its More Personal Computing unit -- which includes Windows, advertising, devices and gaming.

Microsoft Cloud, which combines the company’s cloud-related businesses, grew revenue 32% year over year to $22.1 billion compared with a 36% increase in the September quarter.

Xbox hardware revenue rose 4% one-year after Microsoft launched Xbox Series X and Series S consoles.

Gaming, which now represents nearly 11% of total revenue, became a focus for investors this month, after the company announced plans to acquire Activision Blizzard for $68.7 billion. 

"Following the Activision acquisition announcement, there has been much debate over the price tag of $69 billion and how that translates to tangible value for Microsoft,” said Mediaocean CMO Aaron Goldman. “To get a sense of how that could play out, it’s worth looking at Microsoft’s biggest acquisition to date, LinkedIn in 2016 for $26 billion.”

Goldman said that Microsoft’s acquisition of LinkedIn gave the company new revenue streams like advertising while capitalizing on the larger trend of social media. With Activision, Microsoft can boost its gaming revenue stream and build around larger ongoing trends such as the metaverse, esports, and streaming.

Today, he notes, LinkedIn generates more than $10 billion quarterly.

Nadella called the metaverse the next wave of the Internet, giving Microsoft yet another revenue stream. Just as the first wave of the Internet allowed people to build websites, “I think the next wave of the Internet will be a more open world where people can build their own metaverse world, whether they're organizations or game developers or anyone else.”

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