REDMOND, Wash. — January 23, 2014 — Microsoft Corp. today announced revenue of $24.52 billion for the quarter ended December 31, 2013. 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.

The following table reconciles these financial results reported in accordance with generally accepted accounting principles (“GAAP”) to non-GAAP financial results. We have provided this non-GAAP financial information to aid investors in better understanding the company’s performance.

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“Our Commercial segment continues to outpace the overall market, and our Devices and Consumer segment had a great holiday quarter,” said Steve Ballmer, chief executive officer at 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.”

“We delivered record revenue as demand for our business offerings remains high and we made strong progress in our Devices and Consumer segment,” said Amy Hood, chief financial officer at 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.”

Devices and Consumer revenue grew 13% to $11.91 billion.

• Windows OEM revenue declined 3%, reflecting strong 12% growth in Windows OEM Pro revenue, offset by continued softness in the consumer PC market.

• Surface revenue more than doubled sequentially, from $400 million in the first quarter to $893 million in the second quarter.

• The company 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%.

Commercial revenue grew 10% to $12.67 billion.

• SQL Server continued to gain market share with revenue growing double-digits.

• System Center showed continued strength with double-digit revenue growth.

• Commercial cloud services revenue more than doubled.

• 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,” said Kevin Turner, chief operating officer at 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.”

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast detailed below.

Webcast Details

Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PST (5:30 p.m. EST) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor/. The webcast will be available for replay through the close of business on January 23, 2015.

Adjusted Financial Results and Non-GAAP Measures

During the second quarter of fiscal year 2013, GAAP revenue, operating income, and diluted earnings per share included the net deferral of $1.3 billion of revenue for the Windows Upgrade Offer, the Office Upgrade Offer and Pre-sales, and the Video Game Deferral, and the recognition of previously deferred revenue of $783 million for Windows 8 Pre-sales. These items are defined below. In addition to these financial results reported in accordance with GAAP, we have provided certain non-GAAP financial information to aid investors in better understanding the company’s performance. Presenting these measures without the impact of these items gives additional insight into operational performance and helps clarify trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance. These non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Non-GAAP Definitions

Revenue deferred on sales of Windows 7 with an option to upgrade to Windows 8 Pro at a discounted price (“Windows Upgrade Offer”).

Revenue deferred on pre-sales of Windows 8 to OEMs and retailers before general availability (“Windows 8 Pre-sales”).

Revenue deferred on sales of the previous version of the Microsoft Office system with a guarantee to be upgraded to the new Office at minimal or no cost and pre-sales of the new Office to OEMs and retailers before general availability (collectively, the “Office Deferral”).

Revenue deferred on sales of video games with the right to receive specified software upgrades/enhancements (“Video Game Deferral”).

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

• intense competition in all of Microsoft’s markets;

• increasing focus on services presents execution and competitive risks;

• significant investments in new products and services that may not be profitable;

• acquisitions, joint ventures, and strategic alliances, including our acquisition of Nokia’s Devices and Services business, may have an adverse effect on our business;

• Microsoft’s continued ability to protect its intellectual property rights;

• claims that Microsoft has infringed the intellectual property rights of others;

• the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;

• cyber-attacks and security vulnerabilities in Microsoft products that could reduce revenue or lead to liability;

• disclosure of personal data that could result in liability and harm to Microsoft’s reputation;

• outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;

• government litigation and regulation that may limit how Microsoft designs and markets its products;

• Microsoft’s ability to attract and retain talented employees;

• delays in product development and related product release schedules;

• adverse economic or market conditions may harm our business;

• adverse results in legal disputes;

• unanticipated tax liabilities;

• our hardware and software products may experience quality or supply problems;

• impairment of goodwill or amortizable intangible assets causing a charge to earnings;

• exposure to increased economic and regulatory uncertainties from operating a global business; and

• catastrophic events or geo-political conditions may disrupt our business.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/investor/.

All information in this release is as of January 23, 2014. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, financial analysts and investors only:

Chris Suh, general manager, Investor Relations, (425) 706-4400

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news/. Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. PST conference call with investors and analysts, is available at http://www.microsoft.com/investor/.

Yohz Software announces the release of DB Doc 1.0 on January 21, 2014, and is available for immediate download.

DB Doc benefits:

• Create accurate and up-to-date database documentation faster, in an otherwise tedious and error-prone task.
• Fully customizable layout.
  
• Document your database objects in HTML pages or a single compiled HTML file.
• View and inspect dependencies between objects.
• Supports PostgreSQL 8.3 to 9.3, without the need for any additional database drivers.

For more details about DB Doc, visit the product page here.

REDMOND, Wash. — Jan. 16, 2014 — RCS MediaGroup, the leading Italian multimedia publishing company, primarily operating in Italy and Spain, has modernized and unified its communications infrastructure and enabled flexible, cloud-based collaboration through a comprehensive Microsoft technology solution that includes Microsoft Office 365, Windows Azure, Microsoft Lync 2013, Windows Server 2012 and Microsoft SharePoint 2013.

“With the benefits of a consistent approach for the end user, complete transparency for the delivery and the availability of Office applications, there will be more and more opportunities for our employees to continue to deliver new, innovative ideas,” said Umberto Tonelli, chief information officer of RCS MediaGroup. “For the IT department, this is a win-win situation; we are protecting our investments in technology, diminishing the risk of a massive deployment and finding new space to introduce innovation.”

RCS, longtime partner with Microsoft, turned to Microsoft Corp. because it needed to modernize its existing infrastructure while maintaining the security and quality of its business data and systems. With Microsoft cloud solutions, RCS has benefited from security-enhanced cloud storage, improved its disaster preparedness through the protection of relevant assets such as digitized historical archives of newspapers, simplified its communications infrastructure, and provided agile project management offerings for a mobile, distributed workforce that is using these solutions to manage more than 200 projects within its Digital Product Development Department. Moreover, using modern Windows apps and storage in the cloud, RCS has developed a solution for the sales force of its book publishing company, RCS Libri, that allows sales agents to retrieve the new books catalogue while on the go and present it interactively to their customers. Using the modern Windows app, they can directly place orders from the catalogue in front of the customer, dramatically reducing the selling cycle. After an agent’s visit, the modern Windows app allows the customer to review the catalog through a Web interface and place additional orders. The sales agents benefit as well from using Office 365 and Lync to communicate with their network, within and outside RCS.

Moreover, the new platform provides the marketing teams with a new collaborative environment, based on Office 365, where they can invite selected customers to focus groups to discuss and vote on the new digital products that RCS is planning to release.

Using a combination of Office 365 cloud environment and SharePoint 2013 on-premises, RCS will transform its intranet from a pure top-down communications tool to an interactive self-service feature for virtual desk. In addition to company information and self-service features for administrative tasks, it provides all employees with tools that support their business activities, allow them to collaborate with their network, contribute to and search the enterprise knowledge base, access their personal productivity tools (email, calendar, tasks, etc.), and manage their personal profile, information and files. The integrated solution enables RCS employees to share documents and images, manage projects, and communicate from virtually any location with mobile technology tools that support access from smartphones, tablets and other devices. Employees located in Italy can use Lync to quickly and easily connect with fellow employees in other locations around the world, such as the U.S., Spain, Mexico and China, as well as with vendors and partners. Ultimately, the company has been able to create a better and more productive working environment for its employees.

More information about how organizations are turning to Microsoft technology is available on the Microsoft Customer Spotlight newsroom.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.

Editor’s note – Jan. 16, 2014 – The quote from Ya-Qin Zhang in the press release below was updated post-publication.

SHANGHAI — Jan. 16 , 201 4 — Microsoft Open Technologies Inc. (MS Open Tech), a subsidiary of Microsoft Corp. dedicated to bridging Microsoft and non-Microsoft technologies, on Thursday announced the opening of a subsidiary in China, Microsoft Open Technologies (Shanghai) Co. Ltd. (MS Open Tech Shanghai).

January 15, 2014 Jean Paoli, President of Microsoft Open Technologies, Inc., during his keynote at the launch of Microsoft Open Technologies in Shanghai, China on Jan. 16, 2014.

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MS Open Tech Shanghai will have a robust team of engineers, standards professionals and technical evangelists with roots in open source and open standards. The Chinese subsidiary will focus on facilitating interactions between Microsoft proprietary development processes and the company’s open innovation efforts on services and devices by advancing the investments in interoperability, open standards and open source.

A July 26, 2013, Gartner Research report, titled “Global Data Point: Gartner, Hype Cycle for ICT in China, 2013,” states, “There is growing interest in China in the evolution of cloud technologies, open-source software, shared services, data center technologies such as the software-defined network, smart cities and green IT/sustainability.”[1]

As interest in cloud computing and open source technologies increases in China, Microsoft is focused on providing local customers with greater choice and opportunity to work successfully in heterogeneous IT environments. Through its operations in Shanghai, MS Open Tech will play a pivotal role by driving investments in interoperability and standards in Microsoft products, contributing to the open source community, and enabling open source software on Microsoft platforms, such as Windows Azure.

Jean Paoli, president of MS Open Tech, said, “We are committed to fostering Chinese innovation. Our new subsidiary will offer more flexibility to iterate and release open source software created in China, participate in existing open source and open standards efforts, and collaborate with the community of open source developers in China.”

Mr. Zhao Zhuping, Governor of the Minhang District of Shanghai, extended his congratulations to MS Open Tech Shanghai and said, “The development of open source software and the open source community requires long-term commitment. We are delighted to see the investments and efforts that Microsoft has made to advance the local open source ecosystem, which will enhance interactions between the local and global open source communities and help cultivate local talents.”

January 15, 2014 Government officials, industry leaders and Microsoft executives celebrate the launch of Microsoft Open Technologies in Shanghai, China on Jan. 16, 2014. From left: Samuel Shen, Chief Operating Officer, Microsoft China; Yang Genxing, Chairman, Shanghai Software Industry Association; S. Somasegar, Corporate Vice President, Microsoft Corporation; Mr. Zhao Zhuping, Governor of Minhang District; Jean Paoli, President, Microsoft Open Technologies, Inc.; Lu Shouqun, Honorary Chairman, China Open Source Software Promotion Union (COPU); Lang Sheng Yun, Managing Director, Microsoft Open Technologies Shanghai; Shen Wen, President, Shanghai Zizhu Hi-tech Industrial Development Zone.

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Qiu Shanqin, chairman of China Open Source Software Promotion Union (COPU), said, “MS Open Tech China will enhance the collaboration between Microsoft and China technology companies in the area of open technologies. It will elevate technology innovation, promote the development of software industry in China and become a driver of economic development. MS Open Tech will also help attract more talent, which is the foundation of any community. I hope MS Open Tech will participate in and become an active member of the open source community in China and cultivate the Chinese open source community into a leading community in the world.”

Ya-Qin Zhang, corporate vice president, Microsoft China, said, “China is a strategic market for Microsoft. Over the past few years, Microsoft has significantly expanded the scope of R&D in China to not only help build global products but also help address the needs of China customers, partners and government. The establishment of Microsoft Open Technologies Shanghai is another key milestone in this journey, providing more choices for customers and developers, and more technology innovation for businesses, governments, and consumers, in particular in the era of cloud, big data, mobility and social.”

MS Open Tech works globally with many Microsoft product groups to ensure that open source technologies work well with Microsoft products and open standards are supported. MS Open Tech is helping developers reach more people in more ways across multiple devices by engaging with a variety of standards organizations, such as DMTF, ECMA, IETF, OASIS, W3C, ISO/IEC, and open source communities, including Apache Cordova, Apache Qpid, Blink, Cocos2D, Doctrine, Drupal, Joomla, JQuery, MongoDB, Mozilla, Node.js, Ogre3D, Outercurve, Redis, Symfony, WebKit and WordPress.

MS Open Tech plays an active role among standards-setting organizations, including initiatives for interoperable cloud services and the future of the open Web. In many cases, the subsidiary submits open source prototypes to test a potential standard’s use and interoperability.

More information and updates about MS Open Tech Shanghai are available by subscribing to the MS Open Tech Blog or visiting the MS Open Tech Chinese subsidiary website.

About Microsoft Open Technologies

Microsoft Open Technologies Inc. (MS Open Tech), is a wholly owned subsidiary of Microsoft Corp. dedicated to advancing the company’s investment in openness including interoperability, open standards and open source. MS Open Tech is focused on providing our customers with even greater choice and opportunity to bridge Microsoft and non-Microsoft technologies together in heterogeneous environments, because we’re convinced that openness is good for our customers, good for the community and good for our business. For additional information on MS Open Tech, visit www.msopentech.com.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

[1] Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose .

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.