Microsoft reports record first-quarter revenue

Devices and Consumer revenue grew by four per cent, while Commercial revenue grew by 10 per cent
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Microsoft has reported record revenue of $18.53 billion (£11.44 billion).

The revenue for the first quarter, which ended on September 30th, includes a gross margin of £13.42 billion (£8.28 billion), an operating income of $6.33 billion (£3.91 billion), a net income of $5.24 billion (£3.23 billion) and diluted earnings of 62 cents (38p) per share.

The results also reflect the deferral of $113 (£69.75 million) million of revenue, primarily related to Windows 8.1 pre-sales.

The revenue was bolstered by growth in two of Microsoft’s key categories.

Devices and Consumer revenue grew by four per cent, reaching $7.46 billion (£4.6 billion). The growth comes despite a decline in Windows OEM revenue, which fell by seven per cent. Windows Pro revenue, on the other hand, grew for the second consecutive quarter. Search advertising revenue also grew, increasing 47 per cent, which Microsoft attributed to “an increase in revenue per search and volume”.

In the Commercial sector, revenue grew by 10 per cent to $11.2 billion (£6.91 billion). SQL Server revenue was particularly fruitful; growing by double digits, including SQL Server Premium revenue, which grew by more than 30 per cent. Lync, SharePoint and Exchange also collectively grew by double digits, while Commercial cloud revenue grew by 10 per cent.

"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, CEO at Microsoft, in a statement regarding the results.

"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," added 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."

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