Microsoft brings in $18.53b in revenue, $5.24b in net income

Microsoft has announced that for the third calendar quarter of 2013 (which is considered the first quarter of 2014 in Microsoft's fiscal year) the company generated $18.53 billion in revenues, along with $5.24 billion in net income. This compares to $16.01 billion in revenues and $4.47 billion in net income from the same period a year ago.

This is the first financial report that Microsoft has issued under its new organization that it announced in July. Under the new structure, revenues from its Devices and Consumer businesses came in at $7.46 billion for the quarter, up four percent. The company added that Windows OEM revenue went down by seven percent. Windows Pro revenue grew for the second consecutive quarter but the company did not provide specifics.· Surface revenue came in at $400 million for the quarter "with sequential growth in revenue and units sold over the prior quarter" but again Microsoft did not provide specifics. ·Search advertising revenue grew 47 percent for the quarter "driven by an increase in revenue per search and volume."

The company's Commercial businesses brought in $11.20 billion, up 10 percent. Microsoft stated that SQL Server revenue went up "double-digits", with SQL Server Premium revenue growing more than 30 percent. Lync, SharePoint, and Exchange went up "double-digits" collectively, but that's all the information Microsoft revealed. Commercial cloud revenue grew a whopping 103 percent.

The company added that $113 million of revenue was deferred for the quarter, which it said was "primarily related to Windows 8.1 pre-sales." Microsoft will offer more information on its earnings later today at 5:30 pm Eastern Time as part of its conference call with financial analysts.

Source: Microsoft | Image via Microsoft

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What it comes down to is that Microsoft gets absolutely ZERO respect - in any market that it's either in or entering. If it succeeds, it had to have done something dastardly; however, if it either doesn't succeed as well as it has in the past or it fails, the FAILURE is greeted with a rousing chorus of "serves you right", while doing merely as well as the mid-place competition is tossed aside with "meh". Basically, Microsoft is respected LESS for succeeding, and is still cursed when it fails. The first Surface devices are jeered at for being priced higher than Android devices, though they are priced lower than iPads (notice that I'm not referring to the Surface Pro, mind), and the $900 million write-down was actually greeted with that "serves Microsoft right" - and on Neowin. Notice that Surface has better specs than the majority of Android tablets with the same screen size - however, does Microsoft get ANY respect for that? Not only no, but HECK no - instead, the clamor is for Microsoft to lower the price - not increase the quantity of available devices (while there were some calls for that, the same folks making that request also wanted prices on par with, if not lower than, Android tablets - a lot of which are being sold at no profit or a loss). Is Windows (8 or 8.1) treated any better? Again, no - never mind that the software compatibility (with Windows 7) is actually better than Windows 7's own backward-compatibility with either Vista or XP (Windows 8.1 has better backward-compatibility with Windows XP than Windows 7 does); it's all about the aesthetics - specifically, the lack of a Start menu. The lack of a Start menu can be dealt with, and any number of ways. Looked at realistically, what is the loss from Windows 7 to Windows 8.1? From an application standpoint, I have lost only those applications that became moot due to new or improved features now included with the operating system. (And, except for upgrades that I could easily have done with Windows 7, we are talking not merely similar hardware, but the SAME hardware - this IS a desktop. One third-party application that got mooted was Diskeeper - which I have a fifteen-YEAR history with. Do I miss it? Surprisingly, no - not even a little bit.) Microsoft is taken for granted like almost no other company in technology.

calimike said,
$400 million sales in Surface tablets = 1,00,000 units sold? Surface or Surface 2?

Seeing as the Surface 2/Pro 2 just went on sale 3 days ago I think that's all Surface RT and Surface Pro, not the new devices.

RommelS said,
Microsoft is going to crumble soon because iWorks will be FREEEEEEEEEEEEEEE on iPads!

/s

Microsoft is going to crumble because OS X is FREEEEEEEEEEEEEEEEEE!

/s

Dot Matrix said,

Microsoft is going to crumble because OS X is FREEEEEEEEEEEEEEEEEE!

/s

Free with the purchase of any mac $1000 or more xD

scorpian007 said,
Imagine if Windows 8.1, Surface and Xbox was actually doing really well. All hell would break loose

I'm sure it start with everyone screaming bloody murder about MS's "monopoly" and trying to drag MS back into court so the EU can hit it with some more fines and browser ballots.

DaveGreen93 said,
So much sarcasm in these comments!

It's actually pretty funny. Even with the "/s" tag, people still aren't getting that its sarcasm and lampooning of trolls. Just shows you how hard MS gets ridiculed on a normal basis. That or everyone's sarcasm detectors are on a collective fritz lol.

for a tech site, it's pretty incredible how non-tech savvy a lot of neowinians are

Microsofts profit mainly come from the enterprise sector. Just because they haven't gotten it right with the 'new age' ecosystem consumer shift, they are still the main player.

The next few years are going to be very interesting. Technology has slowly been moving away from 'OMG, I NEED MORE MHZ!!!!" to smaller, more power efficient mobile devices with a powerful cloud based backend. Microsofts Azure platform is right there ready and waiting. They just need the interface and to win consumers back.

either way, it's a win for MS

No, I believe that's true. We still have servers and desktops running our business just like 30 years ago. Smartphones have been an additional aspect but not replacing anything.

This is all Windows 8s fault!!! If Microsoft has only listened to desktop users, they'd...

... what was that? They made MORE money?

Oh

/s

ZipZapRap said,
This is all Windows 8s fault!!! If Microsoft has only listened to desktop users, they'd...

... what was that? They made MORE money?

Oh

/s

MS does not sell Windows OS only; and as you may have noted OEM revenues are down 7% which is a concern.

Fritzly said,

MS does not sell Windows OS only; and as you may have noted OEM revenues are down 7% which is a concern.

I don't see that as concern unless your main business is hardware. The replacement cycle is getting longer because you simply don't need to upgrade until it wears out these days. Capacities have exceeded what most people need.

Spicoli said,

I don't see that as concern unless your main business is hardware. The replacement cycle is getting longer because you simply don't need to upgrade until it wears out these days. Capacities have exceeded what most people need.


It also means that MS is no longer the only, significant, player in the OS market.
The Russians nobles were not concerned as well when the Bolshevik were demonstrating in the streets of Moscow; I am sure that people at MS are smarter than them though.

Fritzly said,

It also means that MS is no longer the only, significant, player in the OS market.
The Russians nobles were not concerned as well when the Bolshevik were demonstrating in the streets of Moscow; I am sure that people at MS are smarter than them though.

I don't believe there is an "OS Market". You don't put on your shopping list "OS" and then start looking at the hundreds of them out there.

Fritzly said,

It also means that MS is no longer the only, significant, player in the OS market.

This.

Windows revenue is going down, that's the reality. But people read more into than what they should. There are now valid alternatives to Windows for basic computing (iOS and Android), on devices that can be upgraded yearly (hell I've had 8 phones in 3 years) instead of every 5 years or so for a PC/laptop.

Of course Windows is going to suffer in that environment. That's why they're going mobile, they're just late to the game.

StandingInAlley said,

That's a bit of a concern tbh.

Concern? Not really. Not for Microsoft. If OEMs want to be profitable, they know how. If they're more interested in shooting themselves in the head, there's not much Microsoft can do about it.

StandingInAlley said,

That's a bit of a concern tbh.

I think it's the sign of a declining PC market and the position OEMs have taken with RT.

StandingInAlley said,

That's a bit of a concern tbh.

in line with the decline in the pc market. I would say its concerning if its like that in another few quarters.

but I still attribute the decline in pcs in the last few quarters to pricing. there were zero windows 8 netbooks for example, and OEMs were over pricing the crap out of their touch products because Microsoft did with the surface. for example, Samsung was selling a clover trail tablet for $750, and others doing the same. Maybe they wanted to see if they could get away with it.

the strategy has just obviously changed, as this month we are starting to see even faster devices than clover trail for around half the price.

StandingInAlley said,

That's a bit of a concern tbh.

Due to the colossal failure of windows 8 and now 8.1 at the retail level the 7% should come as no surprise to anyone, expect it to continue its downward spiral.

Order_66 said,

Due to the colossal failure of windows 8 and now 8.1 at the retail level the 7% should come as no surprise to anyone, expect it to continue its downward spiral.

You keep saying Windows 8 has failed, but time and time again outside sources disagree. Perhaps it's time to come back to Earth.

Dot Matrix said,

You keep saying Windows 8 has failed, but time and time again outside sources disagree. Perhaps it's time to come back to Earth.

Please, don't bring logic or common sense into it..

Order_66 said,

Due to the colossal failure of windows 8 and now 8.1 at the retail level the 7% should come as no surprise to anyone, expect it to continue its downward spiral.

So Windows 8 contributed to the decline of desktops before it was released? Amazing!

StandingInAlley said,

That's a bit of a concern tbh.


Here is what I think. PC form factor is changing and there is no question on that, but PC will not be going anywhere. I have already seen some businesses and corporations adopt all-in-one touch solution for their point of sales, simply because its easier for operator to work with company's custom app and the way corporate can manage anc control app store. Huge potential out there. Its just people that is hard for them to adapt to new changes. Microsoft OS is still best OS you can find and I think this touch screen support is the right way for MS that has stepped into. its matter of few year until everybody adopt to new OS and Modern UI.

Order_66 said,

Due to the colossal failure of windows 8 and now 8.1 at the retail level the 7% should come as no surprise to anyone, expect it to continue its downward spiral.


or may be back in the days, we used to upgrade pc (and OS) every year or so. Now even a cheap PC is powerful enough to be used for at least three years without much issues.

You can't expect to grow infinitely. Sooner or later, it will slow down.

Dot Matrix said,

You keep saying Windows 8 has failed, but time and time again outside sources disagree. Perhaps it's time to come back to Earth.

Order_66? He's left the orbit a long time ago, there's no coming back from where he is floating around.

For all the flack Surface gets $400 million in revenue isn't bad, I mean they're not sold at anywhere near to a loss so how much of that is profit I wonder?

GP007 said,
For all the flack Surface gets $400 million in revenue isn't bad, I mean they're not sold at anywhere near to a loss so how much of that is profit I wonder?

Not sure what you mean by that, but the Surface family is priced perfectly for the high-end hardware you're getting.

Jarrichvdv said,

Not sure what you mean by that, but the Surface family is priced perfectly for the high-end hardware you're getting.

I'm just saying they're not selling it for a loss or for close to it like Amazon for example. I expect the margins on the Surface to be pretty good so out of that $400million a good % should be income/profit.

Jarrichvdv said,

Not sure what you mean by that, but the Surface family is priced perfectly for the high-end hardware you're getting.

That's not what he meant

Microsoft drops the price of Surface by 200$. Internet response: Price drop indicates that the product is a failure, not worth buying, blah blah, Microsoft doomed.

Apple releases a reader app update that allows full screen reading. Internet response: This is amazing!!!11

Relativity_17 said,
Microsoft drops the price of Surface by 200$. Internet response: Price drop indicates that the product is a failure, not worth buying, blah blah, Microsoft doomed.

Apple releases a reader app update that allows full screen reading. Internet response: This is amazing!!!11

What's Apple got to do with this?

The price drop came AFTER a write down on the product. I wouldn't say that's a failure, just didn't do as well as they thought it would.

stevan said,

The price drop came AFTER a write down on the product. I wouldn't say that's a failure, just didn't do as well as they thought it would.

No, the price drop IS IS IS the write down.

Wapoz said,
B..b..b..but, Microsoft is doomed! /s
I don't think anyone said that in the context you are referring to. Even with lackluster products over the past year, Microsoft is still profitable. They are in some way involved in our daily lives. Their product range is huge, and so money will always come in.

JHBrown said,
I don't think anyone said that in the context you are referring to.

Shoot, can't swing a dead troll around here without hitting a half dozen predictions about Microsoft's impending demise due to arrogance, desperation, hating their customers, lack of vision, upcoming things from the competition or any other number of "Derp Microsoft" reasons, etc.

JHBrown said,
I don't think anyone said that in the context you are referring to. Even with lackluster products over the past year, Microsoft is still profitable. They are in some way involved in our daily lives. Their product range is huge, and so money will always come in.

You'd be surprised how many people I encounter that say MS is doomed, across the entire tech blog spectrum lol. Comments tend to go: "OMG WINDOWS 8 SUCH A FAIL! SURFACE WRITE OFF! NO ONE USES OFFICE, GOOGLE DOCS 4LYFE! MS IS SO GOIN OUT OF BIZNESS GUISE!"

Wapoz said,

You'd be surprised how many people I encounter that say MS is doomed, across the entire tech blog spectrum lol. Comments tend to go: "OMG WINDOWS 8 SUCH A FAIL! SURFACE WRITE OFF! NO ONE USES OFFICE, GOOGLE DOCS 4LYFE! MS IS SO GOIN OUT OF BIZNESS GUISE!"

Microsoft isn't going anywhere. Windows 8 got a lot of negativity, as did their WP division but they're fine where they are. Their business division is massive.

PS: You left your caps lock on