Record Profits Again in Q1'05

Revenue growth across all seven business segments and the absence of unusual expenses helped Microsoft post record-breaking profits for its second consecutive quarter. In fiscal year 2005’s first quarter, which ended Sept. 30, 2004, the company earned US$2.90 billion on revenues of US$9.19 billion, thanks in large part to growth in PC and server hardware shipments. However, unearned revenue, derived mostly from multiyear licensing agreements, dropped more than expected, and although Microsoft says it is too early to identify a long-term trend, the company admitted that enterprises are taking longer to decide whether to renew those agreements.

(For an overview of Q1’05 financials and how they compare with previous quarters, see the chart “Microsoft Financials for the Last Five Quarters“.)

Growth Across the Company

Q1’05 was a strong quarter throughout the company: all seven of Microsoft’s businesses enjoyed revenue growth and increased profits (or reduced losses). For a chart showing Q1’05 and Q1’04 revenue and profit or loss by business segment, see “Revenue and Profit (Loss) by Business Segment“.