Microsoft Corp (MSFT)
Market Cap
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Supplied by Morningstar Inc
2015 Annual Report
Earnings Release FY14 Q1
Higher advertising revenue drives revenue increase
Search advertising revenue up 47%
Driven by continued revenue per search improvements and query volume growth
Bing U.S. market share at 18.0% up 210 basis points
Xbox LIVE transactional revenue, up >25%
Over 2 million Office 365 Home Premium subscribers

D&C Other revenue increased $235 million or 17%, due mainly to higher advertising revenue, which increased $106 million or 13%. Search advertising revenue growth was offset in part by a decline in display advertising revenue. Search advertising revenue increased 47%, due primarily to increased revenue per search resulting from ongoing improvements in ad products and higher search volume, offset in part by lower display advertising revenue, which was down 31%, due mainly to a decline in advertising revenue. D&C Other revenue also increased $129 million or 21%, primarily due to higher volumes of content resold through our online platforms.

D&C Other gross margin decreased slightly, due to a $245 million or 24% increase in cost of revenue, substantially offset by higher revenue. D&C Other cost of revenue increased, due mainly to a $99 million or 20% increase in advertising cost of revenue, reflecting increased investment in online infrastructure and higher traffic acquisition costs. D&C Other cost of revenue also increased, due mainly to royalty costs on higher volumes of resale transactions.

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Devices and Consumer Other
RESULTS (in millions, except percentages)
Q114 Q113 Change
Revenue $ 1,635 $ 1,400 17%
Gross Margin $ 352 $ 362 (3)%
FY14 Earnings Release Schedule
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