Microsoft's 2014 revenue up 11.5%, but income stagnates


— 6:00 AM on July 23, 2014

Microsoft has posted financial results for its fourth fiscal quarter and the year as a whole. (Instead of conforming to the calendar, Microsoft's fiscal year runs from July 1 to June 30.) The Windows giant took in $86.8 billion over the last 12 months, an 11.5% increase over its 2013 fiscal year. Net income was up, too, though by only 1%. Here are the relevant yearly numbers:

  2014 2013 Change
Revenue $86.8 billion $77.8 billion 11.5%
Net income $22.1 billion $21.9 billion 1.0%
Gross margin $59.9 billion $57.6 billion 4.0%

The Devices and Consumer Licensing division suffered a 1.1% revenue decline slightly over the year. That decrease was offset by 49% growth in Computer and Gaming Hardware revenue likely driven by the Xbox One. Commercial revenue also rose for both licensing and the nebulous "other" category. And, according to CEO Satya Nadella, revenue from commercial cloud products "doubled again."

Microsoft's purchase of Nokia closed during the last quarter. The acquisition contributed $2 billion in revenue, so keep that in mind as you peruse the quarterly numbers:

  Q4 2014 Q4 2013 Change
Revenue $23.4 billion $19.9 billion 17.5%
Net income $4.6 billion $5.0 billion -7.1%
Gross margin $15.8 billion $14.3 billion 10.4%

Although net income fell 7.1% from the same quarter in 2013, Microsoft still turned a tidy profit. Year-over-year revenue increased substantially, and gross margin ticked up over 10%. Windows volume licensing also climbed 11%, likely due to corporate upgrades inspired by the end of extended support for Windows XP. The old OS was cut off on April 8, just after the beginning of the quarter.

Looking ahead, Microsoft expects to take up to a $1.6-billion hit associated with the sweeping job cuts announced last week. The company believes most of that charge will manifest itself in the first half of fiscal 2015—over the next six months, in other words.

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