Microsoft quarterly revenue rises over 25% to $23.2 bn

Microsoft Corporation, the world's largest software company, on Thursday reported revenue of $23.20 billion for the quarter ended 30 September 2014 on the back of strong performance across commercial and consumer segments.

Microsoft Corp said revenue for the quarter rose on stronger sales of its phones, Surface tablets and cloud-computing products for companies. Revenue from commercial cloud services grew 128 per cent driven by Office 365, Azure and Dynamics CRM, it said without giving the figures.

Gross margin for the quarter stood at $14.93 billion while operating income was lower at $5.84 billion and diluted earnings per share (EPS) for the quarter was down at $0.54 per share.

While revenue and gross margin rose 25.21 per cent and 11.53 per cent, respectively, operating income and EPS were lower by 7.24 oer cent and 13 per cent, respectively.

Financial results for the quarter include $1.14 billion of integration and restructuring expenses, or an $0.11 per share negative impact, related to both Microsoft's restructuring plan announced in July 2014 and the ongoing integration of the Nokia Devices and Services (NDS) business, Microsoft said.

''We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,''  said Satya Nadella, chief executive officer of Microsoft. ''Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organisation.''

''We delivered a strong start to the year, with continued cloud momentum and meaningful progress across our device businesses,'' said Amy Hood, executive vice president and chief financial officer of Microsoft. ''We will continue to invest in high-growth opportunities and drive efficiencies across the organisation to deliver long-term shareholder value.''

Microsoft said devices and consumer revenue grew 47 per cent to $10.96 billion, with 25 per cent quarter-on-quarter increase in Office 365 Home and Personal subscribers totalling more than 7 million and Surface revenue of $908 million driven by Surface Pro 3 sales.

New Windows consumer licensing programme drove positive unit growth while OEM non-Pro revenue declined 1 per cent.

Total Xbox console sales during the quarter grew 102 per cent to 2.4 million, with launch of Xbox One in 28 new markets.

Revenue from phone sales exceeded $2.6 billion with ongoing focus on execution discipline.

Commercial revenue grew 10 per cent to $12.28 billion, with server products and services revenue increasing 13 per cent, with double-digit growth for SQL Server, System Center and Windows Server.

Office commercial products and services revenue grew 5 per cent as customers transition to Office 365.

Commercial cloud revenue grew 128 per cent driven by Office 365, Azure and Dynamics CRM while Lync, SharePoint and Exchange, Microsoft's productivity server offerings, collectively grew in double-digits.

Windows volume licensing revenue increased 10 per cent.

The results allayed fears of investors in recent days that the industry shift toward lower-margin cloud services was proving hard for established technology leaders to master.

Microsoft shares, which have climbed 33 per cent over the past year, rose another 3 per cent in after-hours trading to $46.37.