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The Drum Digital Transformation Festival launch

Gordon Young
Editor-in-chief at The Drum

Microsoft's quarterly revenues top $24bn but LinkedIn continues to drag

LinkedIn generated $1.1bn in revenue for the latest quarter

Microsoft revenues were $27.4bn in the three months to June 30, up 9% year-on-year, with the company reporting that its online B2B network LinkedIn contributed $1.1bn with both revenues from its search advertising and gaming up 10% and 3% respectively.

The bulk of the corporation’s earnings continues to come from PC-based sales, although enterprise software revenue – such as its cloud and server offerings – also contributes a significant chunk (see chart below).

Meanwhile, LinkedIn generated $1.1bn in revenue for the latest quarter with search advertising revenues (which it includes in its PC revenues) up 10%. Gaming revenue growth was limited to 3% as its lowering hardware revenues offset the increases in its Xbox software earnings, with this section of the business now boasting 53 million users.

However, LinkedIn was loss-making operation for the wider Microsoft organization with the professional services outfit generating a $361m loss in the final quarter of the year, while PC revenues were down 2% due to declining phone revenue, which offset the increase in its desktop search business during the period.

“Innovation across our cloud platforms drove strong results this quarter," said Satya Nadella, Microsoft chief executive officer. "Customers are looking to Microsoft and our thriving partner ecosystem to accelerate their own digital transformations and to unlock new opportunity in this era of intelligent cloud and intelligent edge.”

Addressing questions from financial analysts, Nadella was quizzed on rumors on potential reorganization of its sales team, and answered that the corporation was in a constant state of change. It was reported that, in Singapore, all but one of the small sales marketing team was laid off.

The company also used the same opportunity to release details of its fiscal year 2017 (see below).

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