Revenue of $24.52 billion grew 14% on a GAAP basis, and 11% on a non-GAAP basis. Ex-currency, revenue grew 12% year-over-year on a non-GAAP basis. Any way one looks at the quarter--and GAAP comparisons give a better view--it's a really strong performance in a revenue-challenged tech industry.
Gross margin of $16.24 billion was flat in dollars, year-over-year. The gross margin rate was a breathtaking 66.2% Really, the pattern that may appear in the near-term future is solid revenue growth, but significantly less profit growth. Looking at this quarter, it's as if Microsoft is investing its gross profits, which are robustly driven by the Commercial businesses, in its Devices and Consumer businesses where some product margins are non-existent. And, this is probably the right way to tack this ship windward given where it wants to go.
Operating income of $7.97 billion grew 3%, and net income was $6.56 billion. Diluted EPS of $0.78 was up only 3% on a GAAP basis, and declined 4% on a non-GAAP basis. Cash returned to shareholders in the quarter was a record $4.3 billion for dividends and share repurchases.