Strong sales of new and old products alike led Microsoft to its fastest first-quarter growth in seven years, with the company reporting growth in all five business segments.
Revenue for the fiscal quarter ended 30 September was up 27% at $13.7bn, compared with $10.8bn a year ago, Microsoft said.
At $5.92bn, operating income for the quarter also had double-digit percentage growth: an increase of more than 25% over operating income reported for the same period last year of $4.47bn.
Microsoft's first quarter was buoyed by the highly anticipated launch of the Xbox 360 game Halo 3 on 25 September, just days before the quarter's close. In its first 24 hours on sale the game brought in $170m in sales; it became the fastest selling video game in history after being in the market for just a week and a half, according to the company.
Strong performances from Microsoft's client, business, server and tools and online divisions also contributed to revenue growth in the quarter. In particular, Microsoft said sales of its Windows Vista OS experienced double-digit growth through multi-year business contracts, and demand for Microsoft Office, Windows Server and SQL Server was also high.
For its fiscal year 2008, Microsoft expects revenue in the range of nearly $60bn.
Microsoft CFO Chris Liddell said the company raised its financial guidance for the year due to improved outlooks for Microsoft's client business, its server and tools operation, and the Microsoft Business division.
Sales of Vista seem to be on an up, and the fact that many long-term contracts Microsoft has with enterprise customers were up for renewal during the quarter helped fuel some of the revenue growth for the OS. Liddell expects that although companies have signed up for Vista in their contracts, many won't adopt it until the arrival of Vista Service Pack 1, expected in the first calendar quarter of 2008.
"It's still early days" for Vista adoption, he said.