Summary
Microsoft Corporation's (MSFT) fiscal second quarter 2014 report for the period ending December 30, 2013, shows continued revenue growth, driven by strong performance in the Commercial Licensing segment and significant increases in Devices and Consumer Hardware, largely due to the launch of the new Xbox One and Surface devices. The company reported total revenue of $24.5 billion, a 14% increase year-over-year, and operating income of $8.0 billion. While the Devices and Consumer segment saw robust revenue growth, its gross margin declined due to the timing of new product releases and a shift towards lower-margin cloud-based offerings. Conversely, the Commercial segment demonstrated consistent growth in both revenue and gross margin, highlighting the strength of its cloud services and licensing businesses. Microsoft's financial position remains strong, with substantial cash and investments totaling $83.9 billion, although a significant portion is held by foreign subsidiaries. The company also continued its capital return program through share repurchases and dividend payments.
Financial Highlights
54 data points| Revenue | $24.52B |
| Cost of Revenue | $8.32B |
| Gross Profit | $16.20B |
| R&D Expenses | $2.75B |
| Operating Expenses | $8.23B |
| Operating Income | $7.97B |
| Interest Expense | $135.00M |
| Net Income | $6.56B |
| EPS (Basic) | $0.79 |
| EPS (Diluted) | $0.78 |
| Shares Outstanding (Basic) | 8.33B |
| Shares Outstanding (Diluted) | 8.39B |
Key Highlights
- 1Total revenue increased by 14% to $24.5 billion for the quarter, and by 15% to $43.0 billion for the six-month period.
- 2Devices and Consumer Hardware revenue saw a significant jump of 68% for the quarter, driven by the launch of Xbox One and Surface devices.
- 3Commercial Licensing revenue grew by 7% for the quarter, demonstrating continued strength in enterprise software and services.
- 4Gross margin for the Devices and Consumer segment decreased by 14% for the quarter, impacted by new product launch costs and the shift to cloud services.
- 5The company maintained a strong liquidity position with $83.9 billion in cash, cash equivalents, and short-term investments as of December 31, 2013.
- 6Microsoft continues to return capital to shareholders through share repurchases, buying back $2.0 billion worth of stock in the quarter, and declared a dividend of $0.28 per share.