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Friday, April 25, 2014

Microsoft Q3 Financial Results

DualShockers yesterday reported the quarterly financial results for Microsoft, including a press release detailing the revenue for the quarter ended on March 31st.

 The company announced a revenue of $20.40 billion for the quarter ended on march 31st. Gross margin, operating income, net income, and diluted earnings per share for the quarter were respectively $14.46 billion, $6.97 billion, $5.66 billion, and $0.68 per share.

Just to put things into perspective.

For the quarter MS reported a $20billion in revenue overall... $1.97 billion included all hardware devices sold.
Of that $1.97billion approximately $600million came direct from console sales of X1(1.2mil * 500). another $200 million came from the 360(.8mil * 250).

The surface tablets alone accounted for $494 million which roughly equates to 1.2 million sales(494mil / ~$400).

The rest probably came from other peripherals and mobile devices that ms sells.

The total revenue for all Devices & Consumer Other category was 1.95 billion which included office 365, ad revenues generated from sources like bing as well as xbl transactional revenues among other things. I would guess at least half of that comes from bing and potentially alot more as it now has an 18% market share in the US. I'd guess that 500-600 million might be reasonable for xbl transactions. Might be generous though too. I'm shooting in the dark here.

Revenue is meaningless though. The actual net income overall for MS was $5.6 billion. This is what they gained after subtracting all costs. For all of devices and hardware the gross margin was $256million. Please stop and let that sink in for a moment. The actual net income would be less than that as the gross margin does not factor in all costs... (they neglected to report any net incomes at this level in the article as MS probably didnt report them either).

Last year the gross margin for the same quarter was 393 million. Its nearly half as profitable as it was at this time last year. That is what georgeenoob means by being at its most successful state.

The gross margin (which again doesn't include all costs) for Devices and Consumer other(bing, office 365, xbl) was only 540 million. Once again the net income is less than that. and the xbl generated income is less than that still probably by at least half. That is for the massive install base of the 360 along with the x1.

To say it is doomed isn't true, but these aren't exactly good numbers or something to be exactly proud of. The margins and volumes even on the software side do not look too stellar. I understand why they are hiding things.

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