Record-breaking Microsoft smashes Surface sales

Boosted by rampant Surface sales, Microsoft has today announced record-breaking revenue of $24.52 billion during the second quarter, smashing analyst expectations in the process.

According to Redmond figures, gross margin, operating income, net income, and diluted earnings per share for the quarter were $16.24 billion, $7.97 billion, $6.56 billion, and $0.78 per share, respectively.

“Our Commercial segment continues to outpace the overall market, and our Devices and Consumer segment had a great holiday quarter,” says Steve Ballmer, CEO, Microsoft.

“The investments we are making in devices and services that deliver high-value experiences to our customers, and the work we are doing with our partners, are driving strong results and positioning us well for long-term growth.”

Devices and consumer revenue:

Devices and consumer revenue grew 13% to $11.91 billion for the tech giant, with the company reporting that Surface revenue more than doubled sequentially, from $400 million in the first quarter to $893 million in the second quarter.

Microsoft also sold 7.4 million Xbox console units into the retail channel, including 3.9 million Xbox One consoles and 3.5 million Xbox 360 consoles.

Bing search share grew to 18.2% and search advertising revenue grew 34% but Windows OEM revenue declined 3%, reflecting strong 12% growth in Windows OEM Pro revenue, offset by continued softness in the consumer PC market.

“We delivered record revenue as demand for our business offerings remains high and we made strong progress in our Devices and Consumer segment,” says Amy Hood, CFO, Microsoft.

“These results reflect our focus on execution, cost discipline, and long-term shareholder value as we continue to drive the strategic transformation of the company.”

Commercial revenue:

Commercial revenue grew 10% to $12.67 billion, with the SQL Server continuing to gain market share with revenue growing double-digits.

System Center showed continued strength with double-digit revenue growth, while Commercial cloud services revenue more than doubled and Office 365 commercial seats and Azure customers both grew triple-digits.

"We significantly outpaced enterprise IT spend as we continue to take share from our competitors by delivering the devices and services our customers need as they transition to the cloud,” adds Kevin Turner, COO, Microsoft.

“Our commercial cloud services revenue grew more than 100% year-over-year, as customers are embracing Office 365, Azure, and Dynamics CRM Online, and making long-term commitments to the Microsoft platform.”