MS Earnings Call - FY23Q3 | 4% decline for MS Gaming, Xbox HW down 30%

R

reksveks

Member
Gaming Summary:
- Gaming Revenue decline 4% (down 1% CC)
- Xbox content and services up 3% (up 5% CC) due to growth in GP
- Xbox HW down 30% (down 28% CC)
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MS Summary:

Business Highlights

Revenue in Productivity and Business Processes was $17.5 billion and increased 11% (up 15% in constant currency), with the following business highlights:

· Office Commercial products and cloud services revenue increased 13% (up 17% in constant currency) driven by Office 365 Commercial revenue growth of 14% (up 18% in constant currency)
· Office Consumer products and cloud services revenue increased 1% (up 4% in constant currency) and Microsoft 365 Consumer subscribers grew to 65.4 million
· LinkedIn revenue increased 8% (up 10% in constant currency)
· Dynamics products and cloud services revenue increased 17% (up 21% in constant currency) driven by Dynamics 365 revenue growth of 25% (up 29% in constant currency)

Revenue in Intelligent Cloud was $22.1 billion and increased 16% (up 19% in constant currency), with the following business highlights:
· Server products and cloud services revenue increased 17% (up 21% in constant currency) driven by Azure and other cloud services revenue growth of 27% (up 31% in constant currency)

Revenue in More Personal Computing was $13.3 billion and decreased 9% (down 7% in constant currency), with the following business highlights:

· Windows OEM revenue decreased 28%
· Devices revenue decreased 30% (down 26% in constant currency)
· Windows Commercial products and cloud services revenue increased 14% (up 18% in constant currency)
· Xbox content and services revenue increased 3% (up 5% in constant currency)
· Search and news advertising revenue excluding traffic acquisition costs increased 10% (up 13% in constant currency)

Microsoft returned $9.7 billion to shareholders in the form of share repurchases and dividends in the third quarter of fiscal year 2023.
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Presentation Slides:

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Tweets:


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Earnings Call will be at https://www.microsoft.com/en-us/Investor/events/FY-2023/earnings-fy-2023-q2.aspx
Earnings Slide: https://www.microsoft.com/en-us/Inv...3/document/viewdocument/SlidesFY23Q3.pptx/URL] Earnings Excel: [URL]https://www.microsoft.com/en-us/Investor/earnings/FY-2023-Q3/document/viewdocument/FinancialStatementFY23Q3.xlsx

- Azure OpenAI being using adept and inflection (???)
- 2000 openai service costumers, up 10x
- Unilever went all in on Azure
- OpenAI using CosmoDB for Chatgpt.
- 76% of the fortune500 using github
- bunch of people using Github CoPilot
- Powerplatform usage up 50%
- Cloud for sustainability used by BBC.
- Teams up to 300m MAU, 60% of customers buy Teams room or one of the other additional software like premium or hardware.
- Record monthly windows devices
- 930m LinkedIn users, 100m in India
- Bing up to 100m monthly usage (??)
- Bing grew share in the US and Edge grew for the 8th in
- Q3 record in terms of gaming MAU
- Revenue from subs grew to 1bn
- 500m players across first party titles
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Will update when I get a chance.
 
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Not as bad as I was anticipating. Hardware sales being down is expected with Series X consoles still being so hard to find.

Surprised to see content and services actually continuing to grow despite this rough patch.
 
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That hardware number is concerning if they want to grow more GP subs. I wonder what the console/PC GP split is.
 
reksveks said:
Mod of War Mod of War can I change the X% to 4%?
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Throw the hardware decline in the title as well while you're at it.

I'll be tuning into the earnings call. Looking at the initial reaction and the fact that it's based on beating sandbagged guidance/estimates there's a big opportunity here going into tomorrow.
 
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Gamepass is running good, but Hardware is way too low. It will be interesting to see what the numbers look like after Starfield.
 
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Not having starfield last year is seriously hurting them badly.

GG Phil spencer. You let the platform down by not having any 3rd party AAA games ready incase of an event like this.
 
You hate to see the hardware decline, but hopefully they can get back in to marketing mode a bit with the upcoming showcase and move past the "we're so bad" shtick they were kind of forced into with the ABK deal.

At least GP numbers are still going up.

Insert that "we still have GP" gif the ponies like to use.
 
With 53B in revenue and 18B in net income within 3 months, they can buy whatever they want :messenger_tears_of_joy:


Interesting that Game Pass allowed them to get increase in revenue in content services. Hi Fi Rush did its job I guess :messenger_tears_of_joy:

reksveks said:
it is, the disconnect to software and content is weird.
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Not necessary. I think content includes PC. And that's actually without mobile. The fact is that despite hardware being down, they were able to gain in content services.
 
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The 30% decline is troubling. But when you take a step back and look at their hardware decline, quarter after quarter, since the launch of Series X Coupled with the stats Microsoft released to regulators, The reality is that XBOX console sales are like...

fall-off-cliff-mountain.gif
 
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Pelta88 said:
The 30% decline is troubling. But when you take a step back and look at their hardware decline, quarter after quarter, since the launch of Series X Coupled with the stats Microsoft released to regulators, The reality is that XBOX console sales are

fall-off-cliff-mountain.gif
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2022 no first party game effect.

Heisenberg007 said:
Did we get new Game Pass subscribers number?

It has been almost 450 days since we last got any update from Microsoft.
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Maybe this june(hopefully). Its been so long since they stopped reporting it.
 
I do wonder why content and services grew 3% despite hardware being 30% comparatively to the previous Q3 2022 that was the highest (hardware wise) for Xbox.

Game Pass and game sales I guess (and aside Hi fi Rush they did not release anything - I presume April releases are not included right?)
 
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ChuckeRearmed said:
I do wonder why content and services grew 3% despite hardware being 30% comparatively to the previous Q3 2022 that was the highest (hardware wise) for Xbox.

Game Pass and game sales I guess.
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I'm expecting to hear that yet again, PC will be responsible for the vast majority of any GP growth that there was.
 
30% down in 3rd year is awful. No way to spin this. Even more worrying is how do they improve this? Starfield alone will not change anything. What do Microsoft do if console sales keep declining?
 
Darsxx82 said:
We are talking about hardware revenue, which is not indicative of units sold.

Sure, unit sales are lower, but that 30% figure may also be a consequence of XSS selling more than XSX.
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True, could be more discounts on the XSS as well. Although the XSX units they have been selling have been bundles with a game tacked on.
 
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