Microsoft posts record revenue

Rocketing Surface tablet revenue, strong Xbox gaming console sales and large growth in cloud offerings saw Microsoft reap record revenue of US$24.5 billion (A$28 billion) for the last quarter of 2013, the IT giant announced today.

Revenue for the much-derided Surface tablet was a highlight in the latest set of financials for Microsoft, jumping from US$400 million to US$893 million in the December 2013 quarter.

Cloud offerings also grew considerably. Microsoft now has over 3.5 million Office 365 cloud productivity suite subscribers, sharply up from two million the quarter before. Azure customer numbers also rose sharply.

Source: Microsoft

Outgoing chief executive Steve Ballmer said Microsoft's commercial segment continued to outpace the overall market, with the company's investment in devices and services driving the strong results, placing it well for long-term growth.

Long-time Microsoft watcher Paul Thurrott called the results "stunning":

Stunning financial results for Microsoft's final quarter of 2013: Net income of $6.56 billion on record revenues of $24.52 billion

— Paul Thurrott (@thurrott) January 23, 2014

But Microsoft's Windows original equipment manufacturer (OEM) business did not perform so well.

A "continued softness in the consumer PC market" saw OEM revenue slide by three per cent despite strong,12 per cent growth in Windows OEM Pro earnings.

Industry observers had expected lower overall revenue for the quarter, after Microsoft's recently acquired Nokia handset business posted a 29 percent drop in sales.