Microsoft made a record revenue numbers last quarter, but only its Windows division did substantially better than last year. In fact, practically every other aspect of Microsoft's business did worse.
Don't get me wrong, revenue of $19 billion is extremely impressive. But other than the Server business—which was basically flat—all of the growth came from sales of Windows 7. And I'd be willing to bet that a large percentage of that growth came from netbooks. Bing must have been especially disappointing for Ballmer, with online advertising revenue actually decreasing 2% in the same time period when Google saw its revenue increase 17%.
To date, Windows 7 has sold 60 million copies, making it the fastest-selling operating system in the company's history. Of course, a large part of the reason for Windows 7's success is that so many businesses and individuals decided to pass on Vista. Microsoft's essentially been picking up two refresh cycle's worth of business here.
We'll listen in on the earnings call, and will let you know if there are any more interesting details or fun Ballmerisms ahead.
REDMOND, Wash. - Jan. 28, 2010 - Microsoft Corp. today announced record revenue of $19.02 billion for the second quarter ended Dec. 31, 2009, a 14% increase from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $8.51 billion, $6.66 billion and $0.74 per share, which represented increases of 43%, 60% and 57%, respectively, when compared with the prior year period.
These financial results include the recognition of $1.71 billion of deferred revenue, an impact of $0.14 of diluted earnings per share, relating to the Windows 7 Upgrade Option Program and pre-sales of Windows 7 to OEMs and retailers before general availability. Adjusting for the deferred revenue recognition, second-quarter revenue totaled $17.31 billion, and diluted earnings per share totaled $0.60 per share.
"Exceptional demand for Windows 7 led to the positive top-line growth for the company," said Peter Klein, chief financial officer at Microsoft. "Our continuing commitment to managing costs allowed us to drive earnings performance ahead of the revenue growth."
Windows 7 and Windows Server 2008 R2 launched globally on October 22 as anticipated. Through the second quarter, Microsoft has sold over 60 million Windows 7 licenses making it the fastest selling operating system in history.
"This is a record quarter for Windows units," said Kevin Turner, chief operating officer at Microsoft. "We are thrilled by the consumer reception to Windows 7 and by business enthusiasm to adopt Windows 7."
Management will discuss second-quarter results and the company's business outlook on a conference call and webcast at 2:30 p.m. PST (5:30 p.m. EST) today.
In addition, Microsoft offers operating expense guidance of $26.2 billion to $26.5 billion, for the full year ending June 30, 2010.