Microsoft Corp (MSFT)
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Supplied by Morningstar Inc
2015 Annual Report
Earnings Release FY14 Q2
Results reflect device market trends
Windows OEM revenue down 3%
Windows OEM Pro revenue up 12%, driven by higher Windows Pro mix in large enterprises and developed markets
Windows OEM non-Pro revenue down 20%
Excluding the impact of China, non-Pro revenue down 14%
Office Consumer revenue down 24%
Approximately 16% points of decline due to the shift to Office 365 Home Premium
Excluding impact, Office Consumer declined 8%, outperforming the underlying consumer PC market

D&C Licensing revenue decreased $319 million or 6%, due mainly to lower revenue from licenses of Windows and Consumer Office, offset in part by increased Windows Phone revenue. Retail and other sales of Windows declined $264 million or 69%, due mainly to the release of Windows 8 in the prior year. Windows OEM revenue declined $109 million or 3%, reflecting a 12% increase in OEM Pro revenue, offset by continued softness in the consumer PC market. Consumer Office revenue declined $244 million or 24%, reflecting the transition of customers to Office 365 Home Premium as well as continued softness in the consumer PC market. Windows Phone revenue increased $340 million or 50%, reflecting higher sales of Windows Phone licenses and an increase in mobile phone patent licensing revenue.

D&C Licensing gross margin decreased $153 million or 3%, due to decreased revenue, offset in part by a $166 million or 29% decrease in cost of revenue. D&C Licensing cost of revenue decreased, due mainly to a decline in traffic acquisition costs.

Download Segment Information:Excel (27KB)
Devices and Consumer Licensing
RESULTS (in millions, except percentages)
Q214 Q213 Change
Revenue $ 5,384 $ 5,703 (6)%
Gross Margin $ 4,978 $ 5,131 (3)%
FY14 Earnings Release Schedule
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