What was the primary driver of revenue growth in this quarter?

The primary driver of revenue growth was the launch of Windows 7 in October 2009, which significantly boosted sales in the Windows & Windows Live Division.

How did operating expenses change, and what was the impact?

Total operating expenses decreased slightly year-over-year, with notable reductions in Research & Development and Cost of Revenue, contributing to the significant increase in operating income. However, General and Administrative expenses increased due to higher legal charges.

What is the company's stance on shareholder returns, specifically share repurchases and dividends?

Microsoft continued its commitment to shareholder returns. During the quarter, it repurchased $3.6 billion of its common stock under an ongoing $40 billion repurchase program. The company also declared a quarterly dividend of $0.13 per share, consistent with previous periods.

How is the company managing its cash and investments?

Microsoft maintained a very strong liquidity position, with $36.1 billion in cash, cash equivalents, and short-term investments as of December 31, 2009. The company invests primarily in short-term, investment-grade fixed-income securities to ensure liquidity and capital preservation.

MSFT 10-Q Quarterly Report Q2 FY2010 — Revenue, Net Income, EPS

Summary

Microsoft Corporation reported strong financial performance for the quarter ended December 31, 2009, with a significant 14% increase in revenue to $19.02 billion compared to the same period in the prior year. This growth was primarily driven by the successful launch of Windows 7, which boosted the Windows & Windows Live Division revenue by 70%. Operating income saw a substantial 43% increase, reaching $8.51 billion, reflecting not only higher revenues but also improved operational efficiencies and controlled operating expenses across most segments. The company demonstrated robust earnings per share, with diluted EPS rising 57% to $0.74. Microsoft's strong cash generation allowed for continued shareholder returns, including dividends and significant share repurchases. The balance sheet remains strong, with substantial cash and investments, providing financial flexibility. Overall, the filing indicates a company performing well, driven by product innovation and strategic execution, navigating the prevailing economic climate effectively.

Financial Highlights

54 data points

Beta

Revenue

$19.02B

0.8% Gross Margin

Net Income

$6.66B

0.4% Net Margin

EPS (Diluted)

$0.74

Total Assets

$82.10B

Cash & Equivalents

$9.42B

Free Cash Flow

$4.59B

Financial Statements

Beta

Revenue	$19.02B
Cost of Revenue	$3.63B
Gross Profit	$15.39B
R&D Expenses	$2.08B
Operating Expenses	$10.51B
Operating Income	$8.51B
Interest Expense	$38.00M
Net Income	$6.66B
EPS (Basic)	$0.75
EPS (Diluted)	$0.74
Shares Outstanding (Basic)	8.86B
Shares Outstanding (Diluted)	8.95B

Key Highlights

1Revenue increased by 14% year-over-year to $19.02 billion, largely driven by the launch of Windows 7.
2Operating income surged by 43% to $8.51 billion, benefiting from revenue growth and cost management.
3Diluted earnings per share increased significantly by 57% to $0.74.
4The Windows & Windows Live Division saw revenue growth of 70% due to strong Windows 7 sales.
5The company repurchased $3.6 billion of its common stock during the quarter.
6Microsoft maintained a strong liquidity position with $36.1 billion in cash, cash equivalents, and short-term investments as of December 31, 2009.

MICROSOFT CORP Quarterly Report for Q2 Ended Dec 31, 2009

Summary

Financial Highlights

Key Highlights

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