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Microsoft has reported total revenue of $20.49 billion for the quarter ending March 31, 2013, up 18% from $17.41 billion revenues in the same quarter last year.

The company reported an operating income of $7.61 billion for the quarter, up 19% from $6.37 billion operating income in Q3-FY12 and a net income of $6.06 billion for the quarter, up 18.6% from $5.11 billion in Q3-FY12. Microsoft noted that these revenues include the net recognition of revenue deferral for its Windows Upgrade Offer, Office Upgrade Offer and Pre-sales, and the Entertainment and Devices Division Video Game Deferral, partially offset by the recognizing previously deferred revenue for Windows 8 pre-sales.

Highlights

– Microsoft released a major update to Office 365 for business users and announced three new versions of Office 365 called Office 365 Midsize Business for medium-sized businesses, Office 365 Small Business Premium for small businesses and Office 365 ProPlus which offers full versions of regular Office apps like Word, Excel, PowerPoint, OneNote and Outlook among others as a service for businesses. The company informed that the new Office 365 service will be available in 69 markets and 17 languages and will be further extended to an additional 20 markets and 16 languages in Q2 2013.

– Microsoft launched Windows 8 powered Surface Pro in United States and Canada and expanded the availability of Windows RT-based Surface RT to 13 news markets worldwide, including Austria, Belgium, Denmark, Finland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden and Switzerland. It also debuted a 64GB version of Surface RT priced at $599.

– Microsoft officially launched its e-mail service Outlook.com after a six month long preview. The service claims to have clocked 60 million active users in this six month preview period. Microsoft also informed that it had started switching every Hotmail user to Outlook.com and claimed that the upgrade will be seamless and instant for Hotmail users. Earlier this week, Outlook.com also released a redesigned Android app with conversation threading, filters for unread and flagged messages and the ability to mark emails as junk.

– Microsoft inked a patent licensing agreement with Foxconn parent Hon Hai which covers Android and Chrome OS devices.

– Microsoft partnered with NBC Sports Group to deliver live and on-demand programming of more than 5,000 hours of sporting events and Sochi 2014 Winter Olympic Games across NBC Sports’ digital platforms, including NBCSports.com, NBCOlympics.com and GolfChannel.com using Windows Azure Media Services.

Financials

Windows Division

Microsoft’s Windows Division has reported revenues of $5.70 billion, registering a significant 23% growth year-on-year (YoY) from $4.63 billion in Q2-FY12. However, following the adjustment for the net recognition of the revenue for the Windows Upgrade Offer, the revenues remained flat. The division posted an operating profit of $3.46 billion for the quarter, up from $2.98 billion profit in Q3-FY12.

Microsoft informed that multi-year licensing revenue grew by 16% during the quarter and Windows volume licensing clocked double-digit growth. The company added that Windows Volume Licensing is on track to deliver almost $4 billion revenue this year and claimed that two-thirds of enterprise desktops are now running on Windows 7 and 75% of the enterprise agreement signed during the quarter included Windows.

Microsoft also added that Non-OEM revenue increased by 40% during the quarter, driven by Surface tablet sales and commercial sales of Windows.

Online Services Division 

Microsoft’s online services division reported revenues of $832 million for the quarter, registering a 18% growth from $707 million revenue in Q3-FY12. The division reported an operating loss of $262 million for the quarter, a significant improvement from $480 million loss in Q3-FY12. Microsoft mentioned that its online advertising revenue increased by 22% due to an increase in revenue per search, although there was no specific numbers disclosed.

Entertainment and Devices Division

The entertainment and devices division reported revenues of $2.53 billion for the quarter, a 56% increase from $1.62 billion revenue in Q3-FY12. However, following the adjustment for the net recognition of Video Game Deferral revenue, the revenues increased by 33% for the quarter. The division reported an operating profit of $342 million for the quarter, a significant improvement from operating loss of $228 million in Q3-FY12.

Microsoft sold 1.3 million Xbox 360 consoles during the quarter, registering a 9% dip YoY and Xbox LIVE now has more than 46 million members globally, up 18% YoY.

Skype clocked 161 billion minutes of calls during the quarter, registering a 56% growth YoY.

Business Division

Microsoft’s Business Division reported revenues of $6.32 billion, up 8% from $5.84 billion in Q3-FY12. However, following the adjustment for the net recognition of Office Upgrade Offer and Pre-Sales revenue, the revenues increased by 5% for the quarter.  The division reported an operating profit of $4.1 billion for the quarter, an improvement from $3.8 billion profit in Q3-FY12.

Microsoft informed that Exchange, SharePoint, and Dynamics registered double-digit revenue growth during the quarter and Lync registered more than 30% percent revenue growth during the quarter.

Office 365 now has $1 billion annual revenue run rate and the net seat additions was up 5x during the quarter.

Corrigendum: The headline of this post had incorrectly mentioned Q3-FY13 results as Q3-FY12 results. It has now been corrected. The error is regretted. Our apologies.

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Related:

Microsoft Q2-FY13: $21.46Bn Revenue; Windows Revenues Up 24% YoY
– Microsoft Q1FY13: $4.47B Net Profit; Revenues Down 8% YoY
– Microsoft Q4-FY12: $492M Loss On Account Of aQuantive Writedown; Revenues Up 4% YoY