Microsoft Reports Record FY14 Q1 Revenue of $18.53 Billion; Exceeds Expectations

Microsoft today announced revenue of $18.53 billion for the quarter ended September 30, 2013. Gross margin, operating income, net income, and diluted earnings per share for the quarter were $13.42 billion, $6.33 billion, $5.24 billion, and $0.62 per share.

Microsoft stock is up over 7% in after hours trading.

These financial results reflect the deferral of $113 million of revenue primarily related to Windows 8.1 Pre-sales.

 

Three Months Ended

September 30,

Percentage Change

(In millions, except per share amounts and percentages)

Revenue

Operating income

Diluted EPS

Revenue

Operating income

Diluted EPS

2012 As reported (GAAP)

$16,008

$5,308

$0.53

 

 

 

Revenue deferred for Windows Upgrade Offer, Windows 8 Pre-sales, and Office Offer

$1,356

$1,356

$0.13

 

 

 

2012 As adjusted (non-GAAP)

$17,364

$6,664

$0.65

 

 

 

2013 As reported (GAAP)

$18,529

$6,334

$0.62

16%

19%

17%

Revenue deferred primarily related to Windows 8.1 Pre-sales

$113

$113

$0.01

 

 

 

2013 As adjusted (non-GAAP)

$18,642

$6,447

$0.63

7%

(3)%

(3)%

 

“Our devices and services transformation is progressing and we are launching a wide range of compelling products and experiences this fall for both business and consumers,” said Steve Ballmer, chief executive officer at Microsoft. “Our new commercial services will help us continue to outgrow the enterprise market, and we are seeing lots of consumer excitement for Xbox One, Surface 2 and Surface Pro 2, and the full spectrum of Windows 8.1 and Windows Phone devices.”

“We saw strong focus across our teams, generating record first-quarter revenue even as we navigate a fundamental business transition. Our enterprise renewals were very healthy and our devices and consumer business continued to improve,” said Amy Hood, chief financial officer at Microsoft. “We are making strategic investments in areas like technological innovation, supply chain management, and global cloud operations to build for the future and create long-term shareholder value.”

Devices and Consumer revenue grew 4% to $7.46 billion.

  • Windows OEM revenue declined 7%; Windows Pro revenue grew for the second consecutive quarter.
  • Surface revenue grew to $400 million with sequential growth in revenue and units sold over the prior quarter.
  • Search advertising revenue grew 47% driven by an increase in revenue per search and volume.

Commercial revenue grew 10% to $11.20 billion.

  • SQL Server revenue grew double-digits, with SQL Server Premium revenue growing more than 30%.
  • Lync, SharePoint, and Exchange, our productivity server offerings, collectively grew double-digits.
  • Commercial cloud revenue grew 103%.

“We continue to execute well across our businesses and we are seeing robust demand for our enterprise products and cloud services. Strong customer adoption of Office 365, Azure, and Dynamics CRM Online is accelerating our business transition to the cloud,” said Kevin Turner, chief operating officer at Microsoft. “Our investments in SQL database platform, Hyper-V, SystemCenter, and Lync are driving market share gains as these comprehensive solutions enable customers to increase their insight and efficiency.”

Webcast Details

Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor. The webcast will be available for replay through the close of business on October 24, 2014.

Adjusted Financial Results and Non-GAAP Measures

For the first quarter of fiscal year 2014, GAAP revenue, operating income, and diluted earnings per share included the deferral of $113 million of revenue primarily related to Windows 8.1 Pre-sales. During the first quarter of fiscal year 2013, GAAP revenue, operating income, and diluted earnings per share included the deferral of $1.4 billion of revenue related to the Windows Upgrade Offer, Windows 8 Pre-sales, and Office Offer.

Forward-Looking Statements

  • intense competition in all of Microsoft’s markets;
  • increasing focus on services presents execution and competitive risks;
  • our acquisition of Nokia’s Devices and Services business, may have an adverse effect on our business;

 Source: Microsoft

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