Microsoft’s Service Segment Revenue was Up 20% in 2023 Q1

Microsoft (NASDAQ: MSFT) announced its 2023 Q1 financial results on October 25, 2022. According to the announcement, total revenue, operating income were up 11% and up 6%, respectively(GAAP, YoY, 3 months). However, net income was down 14%. Product revenue was down 5%, while service and the other revenue was up 20% (YoY, 3 months).

Microsoft's app icons are displayed on a smartphone.
Photo by Ed Hardie on Unsplash

Looking at revenue by segment, Azure and other cloud services had the largest growth of up 35% (YoY, 3 months). This was followed by Dynamics 365 of up 24% and Microsoft cloud revenue of up 24%. However, Windows OEM was down 15%.

Net cash from operations was down 5% while free cash flow was down 6%.

Although Microsoft’s profit decreased, it showed strong revenue growth. In particular, revenue growth in the services segment could support the company’s growth amid growing supply chain constraints.

Microsoft Corporation (NASDAQ: MSFT) Stock Chart

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