Microsoft Corp (MSFT)
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Supplied by Morningstar Inc
2015 Annual Report
Earnings Release FY14 Q2
Double-digit growth in Commercial and Devices & Consumer segments drives record revenue
Successful holiday quarter for Devices & Consumer segment
Sold 7.4 million Xbox consoles, including 3.9 million Xbox One consoles
Continued progress on Surface, revenue and units more than doubled sequentially
Windows OEM revenue declined 3%, reflecting strong 12% growth in Windows OEM Pro revenue, offset by declines in non-Pro SKU’s as consumer demand continues to be soft
Commercial business continues to outpace the overall market
SQL Server revenue grew double-digits, with SQL Server Premium revenue growing more than 25%
System Center showed continued strength with double-digit revenue growth
Commercial cloud services revenue grew 107%
Office 365 seats, Azure customers and Dynamics CRM net seat adds all grew over 100%

Revenue increased $3.1 billion or 14%, due mainly to higher D&C Hardware and Commercial Licensing revenue.

Operating income increased $198 million or 3%, reflecting higher revenue, offset in part by higher cost of revenue and research and development expenses. Key changes in cost of revenue and operating expenses were:

• Cost of revenue increased $2.6 billion or 46%, primarily due to higher volumes of Xbox and Surface sold, as well as higher datacenter expenses.

• Research and development expenses increased $220 million or 9%, due mainly to increased investment in new products and services in our Devices and Studios and Applications and Services engineering groups.

Revenue Vs. Operating Income
RESULTS (in millions, except percentages)
Q214 Q213 Change
Revenue $ 24,519 $ 21,456 14%
$ 7,969 $ 7,771 3%
Related Information
FY14 Earnings Release Schedule
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