Microsoft Corp. today announced revenue of $11.84 billion for the quarter ended December 31, 2005, a 9% increase over the same period of the prior year, marking the highest quarterly revenue in the company�fs history. Net income for the quarter was $3.65 billion, which grew 5% from $3.46 billion for the same quarter of the previous year. Diluted earnings per share for the quarter were $0.34. Net results included $108 million, or $0.01 per share, in tax benefits.

Operating income for the quarter was $4.66 billion, a 2% decline from the same period in the prior year reflecting in part the impact of significant sales, marketing and product development expenses associated with major product launches.

�The growth in our core businesses was healthy during the quarter driven by strength in Server and Tools and the success of our Windows� Client products in a robust PC market,� said Chris Liddell, chief financial officer of Microsoft. �The quarter also marked the beginning of an important product cycle for Microsoft with the launches of Xbox 360�, SQL Server� 2005, Visual Studio� 2005 and Microsoft Dynamics� CRM 3.0, all of which were extremely successful and well received by our customers.�

Server and Tools revenue grew 14% over the prior year on strength across the product line. The growth of SQL Server was robust with over 20% year over year revenue growth.