Office, Server and Tools, and Xbox Continue Growth

Despite continued revenue declines from its Windows and Windows Live products, steady consumer sales of Office, Xbox products, and business demand for Server and Tools products earned Microsoft US$17.4 billion in revenue in the fourth quarter (ended June 30, 2011) of its 2011 fiscal year, representing an 8% increase from last year’s fourth quarter. Net income also increased year-over-year, from US$4.52 billion to US$5.87 billion. Microsoft’s corporate customers continue to expand buying on long-term (annuity) contracts, ensuring a future revenue stream for the company’s enterprise products.

(For an overview of Microsoft’s recent financial performance, see the chart “Financials for the Last Five Quarters“.)

Consumer PC Decline Offset by Other Products

Microsoft’s most profitable products continue to be the Windows client OS and the Office suite, with Server and Tools products (such as Windows Server) representing a close third. The Windows client division saw a decrease in revenue compared to the previous year. Revenue from other segments increased due in large part to strong sales of Server and Tools products, the Office 2010 and related servers, and the Xbox 360 entertainment platform.