Microsoft FY23 Q1 Earnings: What Customers Need to Know

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In their most recent earnings call for FY23 Q1, Microsoft beat revenue expectations, but posted the lowest rate of revenue growth in five years.  Microsoft covered a lot in the call, but some of the key highlights customers should be thinking about as they move towards their negotiations and renewals include:

  • Total revenue at $50.1B, up 11% from last quarter
  • Microsoft Cloud revenue at $25.7B, up 24% and, for the first time, exceeding 50% of Microsoft’s overall company revenue
  • Office365 commercial revenue grew 11% and was tied to expansion and higher ARPU from E5
  • Dynamics 365 revenue grew 24%
  • LinkedIn revenue grew 17%
  • Azure (and other cloud services) revenue grew 35%, down from 50% Q1 FY22
  • Expect FX to decrease total FY23 revenue growth by approximately 5 points

Their go-forward success will continue to be directly tied to Microsoft Cloud, including solutions like Azure, Office365, LinkedIn, Dynamics 365, and the Power Platform products.  It is clear that Microsoft is going to continue to focus all their energy on getting customers to adopt as much of these as possible in order to meet their larger revenue goals.

Customers need to pay attention to Microsoft’s earnings, including the earnings call itself, so that they can most effectively leverage the results and Microsoft’s clear focus areas during their negotiations. Listen to the podcast below for insights on what levers Microsoft customers have right now with Microsoft and how to use them.  You’ll also learn what customers need to do to ensure they appropriately prepare for their upcoming Microsoft negotiations, so they are not as painful as they often are and ensure no money is left on the table.