Credit: Rob O'Neill
Microsoft's New Zealand's revenue surged to $1.06 billion dollars in the year to 30 June, well up on 2021's result of $774.9 million.
Profit before tax more than doubled, lifting from $21.4 million to $51.3 million while net profit grew from $11.4 million to $40 million.
Cost of sales also lifted sharply, however, from $639.3 million to $902.3 million.
Product revenue increased from $288.8 million to $394.8 million while services revenue grew from $405.6 million to $588.2 million with most of the remainder being commission revenue from a related party.
The pace of adoption of software such as Microsoft Teams is known to have boomed during the pandemic as organisations moved fast to support remote working and collaboration. At the same time, many were also shifting workloads out of local datacentres and into Microsoft's Azure cloud.
Activity also picked up in the cyber security realm. In July, for instance, Microsoft NZ teamed with EY to create two cyber security centres powered by Microsoft Azure sentinel built on previous work with major client Fonterra.
Microsoft is also building a local Azure cloud regions in Auckland which is already attracting significant activity from the likes of the Department of Internal Affairs, which is using the platform to rebuild its many registers.
Despite the surge in sales and profit, Microsoft paid only marginally more tax, $11.3 million compared with $10 million in 2021. However, 2021's tax bill had been increased due to a one-off impairment of goodwill.
That related to Microsoft NZ's 2021 acquisition of Open Cloud NZ from another Microsoft subsidiary, Metaswitch Networks, which Microsoft bought in July 2020. Open Cloud NZ performs R&D activities for Microsoft.
At the start of the 2022 financial year, Microsoft created a new A/NZ business region to accelerate growth and offer more opportunities to customers and partners.
Previously, Microsoft NZ stood within the company's Asia Pacific region reporting into Singapore, alongside the Philippines, South Korea and Indonesia.
The change was expected to allow Australia and New Zealand to combine their strengths and make the most of their similar cultures and economies, without losing sight of each country's unique characteristics, Microsoft said.
