Microsoft Corp. today announced revenue of $9.74 billion for the quarter ended Sept. 30, 2005, a 6% increase over revenue of $9.19 billion for the same period in the previous year. Operating income experienced 16% year-over-year growth for the first quarter to $4.05 billion, including a $361 million charge for the settlement with RealNetworks Inc. Operating income for the first quarter of the previous year of $3.49 billion included a charge of $536 million related to the Novell Inc. settlement.

Net income and diluted earnings per share for the first quarter were $3.14 billion and $0.29 per share, including a $0.02 per share charge for the RealNetworks Inc. settlement. For the previous year, net income and diluted earnings per share were $2.53 billion and $0.23 per share, including a charge of $0.03 per share for the Novell settlement.

Revenue and operating income growth for the quarter were driven by healthy demand for Microsoft’s core platform software and by growth in PC and server shipments. Server and Tools posted double-digit year-over-year revenue growth for the quarter, propelled by strength in its flagship products Microsoft® SQL Server, Exchange Server and Windows® Server. SQL Server showed particular strength, posting greater than 15% revenue growth over the comparable quarter in the previous year. Mobile and Embedded Devices revenue was up more than 50% due to continued adoption of Windows Mobile® software. Major product announcements from both Motorola Inc. and Palm Inc. highlighted the continued customer momentum of Windows Mobile 5.0.