So much for that PC slump: Microsoft delivered stunning financial results for the final quarter of 2013, earning a net income of $6.56 billion on record revenues of $24.52 billion. The firm credited its Devices & Consumer segment—responsible for Surface—and its business offerings for the gains.
"Our Commercial segment continues to outpace the overall market, and our Devices and Consumer segment had a great holiday quarter," Microsoft CEO Steve Ballmer said in a prepared statement. "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."
According to Microsoft, its Surface business came on strong during the quarter, though it declined to provide unit sales numbers. Instead, it noted that Surface revenue more than doubled sequentially, from $400 million in the first quarter to $893 million in the second quarter. Of course, that's not even remotely telling: Microsoft delivered two new Surface models in Q4, and it never reported Surface revenues in the year-ago quarter.
Windows revenues, amazingly, were down only 3 percent (year over year), thanks largely to softness in the consumer PC market. But "Windows OEM Pro revenue"—a curious new metric—was up 12 percent.
Microsoft also said that it sold 3.9 million Xbox One consoles and 3.5 million Xbox 360 consoles "into the retail channel" in Q4, meaning to retail stores and distributors. The firm had previously revealed that it sold over 3 million Xbox Ones to consumers by the end of 2013.
While we're still waiting on a post-report earnings conference call for more details, Microsoft did provide a few other tidbits. In the quarter, Office 365 commercial seats and Azure customers both grew in "triple digits," commercial cloud services revenue more than doubled, and SQL Server and System Center both experienced double-digit growth.
I'll have more on Microsoft's earnings in tomorrow's Short Takes.