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.