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Q2 2012 Earnings Call
January 19, 2012 5:30 pm ET
Bill Koefoed - General Manager of Investor Relations
Peter S. Klein - Chief Financial Officer
Richard G. Sherlund - Nomura Securities Co. Ltd., Research Division
Adam H. Holt - Morgan Stanley, Research Division
Gregg Moskowitz - Cowen and Company, LLC, Research Division
Tim Klasell - Stifel, Nicolaus & Co., Inc., Research Division
Kash G. Rangan - BofA Merrill Lynch, Research Division
Edward Maguire - Credit Agricole Securities (USA) Inc., Research Division
John S. DiFucci - JP Morgan Chase & Co, Research Division
Heather Bellini - Goldman Sachs Group Inc., Research Division
Brad Reback - Oppenheimer & Co. Inc., Research Division
Philip Winslow - Crédit Suisse AG, Research Division
Robert P. Breza - RBC Capital Markets, LLC, Research Division
Brendan Barnicle - Pacific Crest Securities, Inc., Research Division
Mark L. Moerdler - Sanford C. Bernstein & Co., LLC., Research Division
Walter H. Pritchard - Citigroup Inc, Research Division
Previous Statements by MSFT
» Microsoft Corporation - Shareholder/Analyst Call
» Microsoft Management Discusses Q1 2012 Results - Earnings Call Transcript
» Microsoft Management Discusses Q4 2011 Results - Earnings Call Transcript
Thank you, operator, and thank you, everyone, for joining us this afternoon. As usual, with me today are Peter Klein, Chief Financial Officer; Frank Brod, Chief Accounting Officer; and John Seethoff, Deputy General Counsel.
On our website is our financial summary slide deck, which is intended to follow our prepared remarks and provides the reconciliation of differences between GAAP and non-GAAP financial measures. This information is available at microsoft.com/investor.
As a reminder, we will post today's prepared remarks to our website immediately following the call until the complete transcript is available. Today's call is being webcast live and recorded. If you ask a question, it will be included in our live transmission, in the transcript and any future use of the recording. You can replay the call and view the transcript at the Microsoft Investor Relations website until January 19, 2013.
During this call, we will be making forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's earnings press release, in the comments made during this conference call and in the Risk Factors section of our Form 10-K, Form 10-Qs and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.
Okay, and with that, I'll turn the call over to Peter.
Peter S. Klein
Thanks, Bill, and thanks everyone for joining us. I'm pleased with our performance this quarter. Despite a challenging PC market, we delivered solid financial results. We saw a strong demand for our business products and services and had a record holiday season, driven by the unique entertainment experience we have built with Xbox 360.
This quarter, the strength of our product portfolio enabled us to grow revenue 5% to $20.9 billion. Combined with our ongoing operating expense discipline, even as we prepare for a big launch year, we delivered record earnings per share of $0.78.
Similar to prior periods, we saw a broad-based growth across geographies, with particular strength in emerging markets. Within our segments, the Microsoft Business Division had another good quarter as businesses and consumers around the world look to Microsoft to meet their productivity needs. Six quarters post-launch, Office 2010 continues to exceed our expectation, with increased consumer and business PC Attach worldwide.
We saw double-digit revenue growth across our key business application workloads, including Exchange, SharePoint, Lync and Dynamics CRM and ERP. As businesses large and small look to the cloud to lower costs and enable new ways of supporting a distributed workforce, they are turning to Microsoft. With Office 365, we give customers powerful productivity and collaboration tools at great value. Today, more than 100,000 businesses have made the commitment to our Online Services. Whether on-premise or in the cloud, Microsoft remains the top choice for productivity.
The Server & Tools Business delivered another strong quarter, as we continue to execute on our strategy of cloud optimizing every business. CIOs are increasingly turning to our business infrastructure offerings, including Windows Server, Hyper-V and System Center as they look to Microsoft for the security, flexibility and manageability they need to build world-class private clouds. This quarter marked the ninth consecutive quarter of double-digit growth for Windows Server Premium revenue and the 11th quarter of double-digit revenue growth for System Center.
On the data platform, we remain the worldwide unit share leader with SQL Server. Consistent with our strategy, we are growing our revenue share with marquee customer wins on mission-critical workloads and business intelligence capabilities.
This year, we will bring to market the next generation of our server offerings, including Windows Server 8, SQL Server 2012 and System Center 2012, which deepen and broaden our platform for the private cloud. Combined with the power of Windows Azure for the public cloud, our offerings give enterprises the identity, virtualization, application development and management tools they need to efficiently progress into the new era of hybrid IT.
The PC market was challenged this quarter, with particular softness in the consumer segment. However, Windows 7 momentum in the enterprise continued and today, over 1/3 of enterprise desktops worldwide are on Windows 7. And with the future release of Windows 8, we believe the ecosystem will benefit from the new range of capabilities and scenarios that it enables.