Microsoft brings in $20.49 billion in revenue for Q1 2013

Microsoft has announced that for the first quarter of 2013 (which is considered the third quarter of 2013 in Microsoft's fiscal year) the company generated $20.49 billion in revenues, along with $6.06 billion in net income. The numbers compare to $17.41 billion in revenues for the same period a year ago and $5.11 billion in net income for the same period a year ago.

Microsoft's press release stated that the Windows division brought in revenues of $5.70 billion for the quarter, an increase of 23 percent for the same period a year ago. The Business division generated $6.32 billion in revenues for the quarter, up eight percent from a year ago and the Server and Tools division brought in $5.04 billion for the quarter, up 11 percent from the same period a year ago.

Microsoft's Online Services Division reported revenues of $832 million for the quarter, up 18 percent from the same period a year ago. The Entertainment and Devices Division generated revenues of $2.53 billion for the quarter, up 53 percent from the same period a year ago. The division includes the Xbox business and Microsoft said there is now 46 million people signed up to use its Xbox Live online service, up 18 percent from the same period a year ago.

Microsoft also announced that, due to the $732 million fine that the European Commission placed on Microsoft in March, it is lowering its revenue predictions for its full fiscal year and is now projecting it will generate between $30.2 billion to $30.5 billion for the entire fiscal year. For the current quarter, Microsoft is projecting revenues of $31.6 billion to $32.2 billion.

Source: Microsoft | Image via Microsoft

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Wish i could afford shares in microsoft... knew this would happen was a np brainer.. Oh and loving windows 8 sooooo much quicker than windows 7 and i am finding it very stable, only issue i had was with ATI/AMD calling my HD4890 legency and being slow to release drivers... no a Microsoft fault..

Long live windows...

Or could this be the year of linux/osx? dun dun dun....................

Please - Microsoft isn't Google or Apple - with share pricing at some insane value. Shares of Microsoft are less pricey than shares of Facebook. MSFT = $29.67 @ 1300 EDT today. Google and Apple have truly cuckoo stock valuations due to large cash hoards.

Okay, people, seriously stop hating on Windows 8. You have no reason to hate it because investors, whom don't even have the official statements, believe it was a flop.

The reason why companies like DELL say that PC shipments are down, is because they are down. Windows 8 just happened to be released, so they decided to blame it. If the next Mac came out, the same thing would be happening. There is no reason to upgrade immediately after a release, and the expense of doing so is big. Maybe not for the individual, but for companies and schools, its enormous.

Most schools and companies were just starting to upgrade to Windows 7 this time last year, and admit to taking a while because they didn't need to yet. Microsoft just happened to release Windows 8 at a time when the market for companies were upgrading to a less state-of-the-art product, and can't, or don't have a reason to, put out the money already for the updated version.

Oh, and take a look at that, when companies were just upgrading to Windows 7, the numbers for profit were lower than they are now, when the supposed failure is being more noticeable. What does that tell you?

Also, does turning in a profit make it a failure? No, in a companies point of view if it turns in even a decent profit it was a success, so turning in $ 26.55 billion (in total, sure) for a profit of a year is huge. Especially considering that is 8.6% of their total networth, about 230 billion. Tell me Microsoft is in a bad position right now, with statistical proof.

Also, for those of you feeling these numbers are faked, when you test it with Benfords Law, you find they fit it perfectly. (Benfords Law is a mathematical way of telling if values are faked or not, based on percentages of a number starting with a certain number. Also using this I can test your replies with the numbers you give me that will, most likely, be faked.)

So I guess the Anal ... ysts that downgrade MS stock probably bought alot of its stock. Now the news is out, they can sell and get more money.

MDboyz said,
So I guess the Anal ... ysts that downgrade MS stock probably bought alot of its stock. Now the news is out, they can sell and get more money.

That was the whole idea.

Wow, these are big numbers

I knew there are a lot of money to be made from the servers and databases, but never noticed the billions a month

That's it, my next software is server

Based on Eric Schmidt's comments, Microsoft are making an estimated $7.5Million / day on Android

Doesn't really matter where the money comes from. Consistent growth and improving the service portfolios for their consumer segments will keep me a staunch supporter.

He said Google were registering 1.5 million Android devices a day. At $5/device patent royalty to MSFT.

Actually the number is likely higher than $5. We believe ZTE are paying $35 for their tablet products.

Anyway, it's a nice little earner.

So all divisions are doing better... impressive.

But how is the The Entertainment and Devices Division up 53%? Thats pretty massive. And overall console game sales have been getting lower and lower over the past year or more. Everyone is bored of this console generation.

Even if Xbox now has more Live subscribers it still don't explain such a large increase. Could it be games like Halo 4? Or does this division also include Surface??

It DOES include Surface, Surface Pro, and their peripherals business (Kinect, webcams, keyboards, mice, etc.). Quite aside from Surface and Surface Pro, the peripherals biz has been cranking out product at a decent clip as well.

PGHammer said,
It DOES include Surface, Surface Pro, and their peripherals business (Kinect, webcams, keyboards, mice, etc.).

Incorrect. Surface is in the Windows division.

The reason the analysts are beating up on Microsoft (despite IBM missing even worse) is because they aren't into mobile to as big a degree. Google (except for Motorola's cable business, which is being sold) is almost a purely mobile play - the exceptions are their ad business, which is a cash cow, and Google Fiber, which is likely a money-loser, but generates so much buzz that Google can afford to run it as basically a loss-leader. The analysts have been screaming *mobile mobile mobile* since before the Windows 8 Developer Preview. The amusing thing is that Apple (which is into mobile more than Microsoft) missed even worse, and their stock is taking it in the neck. The why of it - lackluster sales, especially in Europe.

PGHammer said,
The reason the analysts are beating up on Microsoft (despite IBM missing even worse) is because they aren't into mobile to as big a degree. Google (except for Motorola's cable business, which is being sold) is almost a purely mobile play - the exceptions are their ad business, which is a cash cow, and Google Fiber, which is likely a money-loser, but generates so much buzz that Google can afford to run it as basically a loss-leader. The analysts have been screaming *mobile mobile mobile* since before the Windows 8 Developer Preview. The amusing thing is that Apple (which is into mobile more than Microsoft) missed even worse, and their stock is taking it in the neck. The why of it - lackluster sales, especially in Europe.

I don't see the analysts beating up on MS, in after hours trading MS is up nearly 2%. If the analysts were unhappy with the results, then MSFT would be down. You say that analysis are looking for a mobile strategy, but Apple is down to 15 month lows (and another $2 after hours) and Microsoft is up after hours. So the mobile theory does not pan out. Yes the MSFT is just for after hours, but it is still up 10% for the lows of the past year, while the mobile-focused company is down 45% from the yearly highs.

I was referring to PRIOR to today's report - if anything, the report (except for new PC sales) puts the onus squarely on everyone else - not Microsoft. Biggest surprise (for them) - Windows sales are +63 percent (this is a flop?). Anyone for Egg Sammiches?

A more accurate thing to say would be "Microsoft isn't just Windows, after all, is it?"

There's a lot of stupid out there that just don't understand what Microsoft sells.

Joshie said,
A more accurate thing to say would be "Microsoft isn't just Windows, after all, is it?"

There's a lot of stupid out there that just don't understand what Microsoft sells.

However, they do say Windows revenue is up 23% compared to last year. It was also the division that saw the biggest percentage increase in revenue besides E&D.

BannanaNinja said,

However, they do say Windows revenue is up 23% compared to last year. It was also the division that saw the biggest percentage increase in revenue besides E&D.

Flat on a non-GAAP basis. (Microsoft defers a lot of revenue, and they always give non-GAAP results in addition, to correct for this deferral and indicate the actual state of their business.)

The important thing is that Microsoft managed 8% growth in non-GAAP revenue, 5% growth in non-GAAP income, and 8% growth in diluted EPS. Even with flat growth in Windows. This tells you just how much Microsoft has already decoupled from Windows.

Studio384 said,
SO, How are the Windows 8 haters now going to argue that Windows is doing bad?

They'll either say it's just from the initial sales pop and that it'll fall next quarter or that it's all thanks to Windows 7 still.

Studio384 said,
SO, How are the Windows 8 haters now going to argue that Windows is doing bad?

How will they do it? Some of the other sites are doing things like comparing the Q3 results to the Q2 results - meaning they are comparing sales of January-March to the quarter containing the Christmas shopping season - and calling the change "soft" and Win8 sales flat. Of course, they will not make these comparisons for MS competitors, they do the correct comparison of YOY, but then that does not make Microsoft look bad.

GP007 said,

They'll either say it's just from the initial sales pop and that it'll fall next quarter or that it's all thanks to Windows 7 still.

It IS still due to Windows 7 and their corporate divisions. Just wait, you will see...they are dead in the water if they continue their course with "Metro"

John Nemesh said,

It IS still due to Windows 7 and their corporate divisions. Just wait, you will see...they are dead in the water if they continue their course with "Metro"

the sky is green, the earth is flat, just wait and see. I have to laugh at people like you.

Why does it matter whether consumers are buying Windows 8 or Windows 7? They're still buying Microsoft. There's still zero competition in the OS and Office markets.

These numbers make Microsoft's software sales bigger than the next three companies combined (Oracle + IBM + SAP). Keeping things (software) in perspective, Apple is still at number 28 and Google 79 globally.

GP007 said,

They'll either say it's just from the initial sales pop and that it'll fall next quarter or that it's all thanks to Windows 7 still.

THEY are already saying that. Makes you wonder how intensely some people hate Windows.

There's competition in BOTH markets - even in terms of productivity suites. The problem said competition has is that Microsoft has *continually* stepped it up a notch when it spots competitors breathing down its neck. It's done so in operating systems (it did NOT move bag and baggage to NT on a whim, even though said move DID hork off most of their OEM partners, especially outside North America), and it's now done so back-to-back in productivity suites. The tag-team of Office 2013 and Office 365 2.0 is meant to cover every possible bet - from students to teleworkers using the cloud and software-as-a-service. Even more surprising is the timing - it DIRECTLY follows the wildly successful Office 2010 and the original Office 365. That means that there are both back-to-back Office AND back-to-back Windows *successes* - unheard-of, from Microsoft or anybody else. And then we have the REST of Microsoft that normally gets little attention - the peripherals business. The keyboard, mouse and webcam business has not exactly been letting the grass grow under their lasers - they are still around, and even still profitable. (They even introduced several new products over the past year.) Windows and Office have simply been the more obvious Microsoft power-hitters - however, Microsoft has a very deep bench, which is, if anything, getting even deeper.

this can't be right, all the analysts are saying Microsoft is a dead man walking, no way could their net profits and revenue be going up </s>

neufuse said,
this can't be right, all the analysts are saying Microsoft is a dead man walking, no way could their net profits and revenue be going up </s>

It's called inertia. Windows 7 corporate sales are still the bulk of profits.

John Nemesh said,

It's called inertia. Windows 7 corporate sales are still the bulk of profits.

Frankly, Microsoft business/enterprise license sales cannot really be used to gauge version.

An enterprise can be expected to spend money on what's current, then use downgrade rights for that license if it's newer than what they deploy, and then they also tend to get software assurance so they automatically have upgrade rights.

airedwin said,
But... PC Shipments are down, Windows 8 was a flop, experts downgraded microsoft to sell /S

MS made money, but the stock market only rewards future growth. Right now Windows 8's reaction in the market has been very unsatisfactory so it is hard to see the growth prospects for Windows currently from an investor perspective.

LogicalApex said,

MS made money, but the stock market only rewards future growth. Right now Windows 8's reaction in the market has been very unsatisfactory so it is hard to see the growth prospects for Windows currently from an investor perspective.

I am sure investors aren't just interested in Windows 8, Microsoft is much more than just Windows 8.

LogicalApex said,

They do, but Windows and Office still represent over 60% of MS' revenue and an even bigger share of its profits.

The Windows and Business divisions account for 60% of revenue. The Business division does indeed include Office, but it also includes Office 365, Exchange, Sharepoint, Lync, and Dynamics CRM.

Microsoft does not break out individual products. But at this rate, we will soon see the day when Windows + Office make up less than 50% of Microsoft's revenues.

Incidentally, this makes the performance of the Server & Tools division even more impressive. Some of these products used to belong to the S&T division, so they've nearly caught up to Windows even after a handicap.

TomJones said,

The Windows and Business divisions account for 60% of revenue. The Business division does indeed include Office, but it also includes Office 365, Exchange, Sharepoint, Lync, and Dynamics CRM.

Microsoft does not break out individual products. But at this rate, we will soon see the day when Windows + Office make up less than 50% of Microsoft's revenues.

Incidentally, this makes the performance of the Server & Tools division even more impressive. Some of these products used to belong to the S&T division, so they've nearly caught up to Windows even after a handicap.

Pricesely, Sharepoint and Dynamics are > 1 billion products as is Lync, if these (and exchange) would be in the division they belong (server) it would make the server division the biggest earner.

LogicalApex said,

MS made money, but the stock market only rewards future growth. Right now Windows 8's reaction in the market has been very unsatisfactory so it is hard to see the growth prospects for Windows currently from an investor perspective.

Lets do some basic calculation, shall we.

Windows license = X
OEM Hardware sales = Y

Assumption 1, X is directly proportional to Y.

Y declines by 13%.
Using Assumption 1, X should have declined by 13% as well.

Fact- X is flat = NO CHANGE

So, it did not decline 13%.

Using Assumption 1, we can deduce that Microsoft increased sales. Sales were expected to be A (13% less), but were B. In other words WINDOWS 8 is a SUCCESS.

Kunal Nanda said,

Lets do some basic calculation, shall we.

Windows license = X
OEM Hardware sales = Y

Assumption 1, X is directly proportional to Y.

Y declines by 13%.
Using Assumption 1, X should have declined by 13% as well.

Fact- X is flat = NO CHANGE

So, it did not decline 13%.

Using Assumption 1, we can deduce that Microsoft increased sales. Sales were expected to be A (13% less), but were B. In other words WINDOWS 8 is a SUCCESS.

This would only make sense if you ignore a lot of reality. For starters, OEMs generally prepurchase licenses to ensure they have them on hand to ship machines. Additionally, businesses automatically purchase new licenses via software assurance even if they never plan on upgrading.

Among other things.

So Microsoft can still see gains while the market is down in the short term, but any sustained loss will eventually bubble up.

Definitely great to see all of those % increases from the prior period. It's a good thing microsoft has decided to expand into many varied markets, will really help for their future.

Avi Patel said,
Definitely great to see all of those % increases from the prior period. It's a good thing microsoft has decided to expand into many varied markets, will really help for their future.

When you see this consistent growth and financial success every year you just have to laugh at the stupidity of people calling for Ballmer's head.

Avatar Roku said,

When you see this consistent growth and financial success every year you just have to laugh at the stupidity of people calling for Ballmer's head.

Maybe you need to put these numbers into perspective... They are comparing Q1 2012 to Q1 2013. Now remind us when Win 8 and the Surface launched?

It doesn't take a genius to figure out why revenue is up...

Let's see those Win 8 and and Surface sales numbers. Those numbers will tell the actual story.

Astra.Xtreme said,

Maybe you need to put these numbers into perspective... They are comparing Q1 2012 to Q1 2013. Now remind us when Win 8 and the Surface launched?

It doesn't take a genius to figure out why revenue is up...

Let's see those Win 8 and and Surface sales numbers. Those numbers will tell the actual story.

The CFO resigned for a reason!