Below are several areas where we would expect softness to creep into Microsoft’s business – primarily in the back half of the calendar year (recall that MSFT is on a June 30 fiscal year end). MSFT reports today after the close.
- Office 365 Commercial revenue: We would expect seat revenue growth to soften in 2H CY’22. Perhaps some of this softness bled into the June Q. March Q saw 16% Rev growth Y-O-Y.
- LinkedIn: It would be logical to expect that the Talent Solutions business has started to soften and will remain soft for the remainder of CY’22. LinkedIn Rev growth was 34% Y-O-Y in the March Q for comparison purposes.
- MSFT is not unique here as many Technology companies have slowed hiring. HRMS/HR Tech Software companies in general will experience softness/slower bookings in 2H CY’22.
- Server Products: We would expect Server Products revenue to slow in 2H CY’22. For comparison purposes Server Products grew 5% Y-O-Y in the March Q.
The points above refer to constant currency organic revenue and therefore do not contemplate the revenue benefit from acquisitions such as the Nuance deal which closed on March 4th 2022.