Microsoft's LinkedIn Sees Continued Growth Despite Shutting Down Chinese Business

Microsoft reported strong financial results for the third quarter of 2024, with revenue increasing to $61.86 billion from $52.86 billion in the same period of 2023. Net income also rose to $21.9 billion or $2.94 per share, up from $18.3 billion or $2.45 per share in the previous year. The company's cloud business segment was a key driver of the robust performance.

Despite shutting down its Chinese business in May 2023, Microsoft's LinkedIn division saw an 11% growth in sessions and record engagement during the quarter, continuing a 6-year trend of growth. LinkedIn's continued success highlights the platform's global appeal and ability to connect professionals worldwide.

Microsoft's Q3 2024 earnings surpassed analyst estimates, with the company reporting earnings of $2.94 per share on sales of $61.9 billion. The Intelligent Cloud unit, which includes Azure, was the top performer with revenue increasing 21% to $26.7 billion. Microsoft Cloud revenue was up 23% year-over-year, demonstrating the strength of the company's cloud computing business.

The Productivity and Business Processes unit, which includes LinkedIn, also saw a 12% sales increase. This growth was driven in part by the integration of artificial intelligence (AI) across Microsoft's cloud services. The company's investments in generative AI, such as its partnership with OpenAI and the launch of the Copilot tool, have helped lift its enterprise software and Windows businesses, along with a recovery in personal computer sales.

Why this matters: Microsoft's strong financial performance and the continued growth of LinkedIn, despite challenges in the Chinese market, underscore the company's resilience and ability to adapt to changing global conditions. The integration of AI across Microsoft's cloud services positions the company well for future growth and innovation in the rapidly evolving tech landscape.

Microsoft provided a Q4 2024 revenue forecast of $63.5 billion to $64.5 billion, slightly below analyst estimates. However, the company's Azure revenue grew 31%, higher than the expected 29% growth, and Microsoft forecast fourth-quarter intelligent cloud revenue and Azure growth to be mostly ahead of Wall Street targets. "In the third quarter of fiscal year 2024, LinkedIn revenue increased 10% (9% in constant currency)," Microsoft reported in its earnings release, highlighting the platform's consistent performance.

Key Takeaways

• Microsoft Q3 2024 revenue increased 17% to $61.86B, net income rose 20% to $21.9B.
• LinkedIn saw 11% growth in sessions and record engagement despite China business shutdown.
• Microsoft's Intelligent Cloud unit, including Azure, was the top performer with 21% revenue growth.
• Microsoft's Productivity and Business Processes unit, including LinkedIn, saw 12% sales increase.
• Microsoft forecasts Q4 2024 revenue of $63.5B-$64.5B, with Azure revenue growth expected to exceed 29%.