Microsoft has posted its results for the first quarter of its 2014 financial year. Compared to the same quarter last year, revenue is up 16 percent to $18.529 billion, operating income is up 19 percent to $6.334 billion, and earnings per share is also up, rising 17 percent to $0.62.

The way Microsoft is reporting its financials has changed as a result of the reorganization that started earlier this year. Broadly, the results are split into two main parts: a "Devices and Consumer" (D&C) division, which spans all sales that are end user facing, including OEM Windows licensing, retail software, Xbox, Windows Phone (including related patent licensing), and Bing advertising, and a "Commercial" division, which spans volume license sales, server products, and consulting.

This means that under the new reporting system, some products have their revenue split. Office, Office 365, and Windows in particular have both consumer and commercial sales.

D&C is further subdivided three ways: Licensing, which covers software sales, patent agreements, and similar; Hardware, covering Surface, Xbox 360, mice, and third-party games and Xbox Live subscriptions; and Other, covering Windows Store, Xbox Live purchases, advertising, first-party games, and Office 365 Home Premium.

Commercial is similarly split into two: Licensing, which covers software sales and Skype, and Other, covering Enterprise Services, Azure, Dynamics CRM, Office 365 subscriptions, and other online services.

A third bucket, "Corporate and Other" includes corporate expenses and revenue shuffling from the various upgrade offers.

Additionally, the company is now reporting gross margin for each of these groups. Under the old system, it reported net income.

Microsoft has provided equivalent figures under the new reporting scheme for its 2013 financial year to allow some kind of comparison to be made.

D&C Licensing posted revenue of $4.343 billion, with a gross margin of $3.925 billion. These are both down on the (notional) figures from the same period last year, with declines of 7 percent and 4 percent respectively. The main cause of this was the decline of Windows OEM non-Pro revenue, which fell 22 percent. China was mentioned as being particularly hard hit; excluding it, the revenue declined by 17 percent. Windows OEM Pro revenue did, however, increase by 6 percent. Consumer-oriented Office revenue also fell by some unspecified amount.

D&C Hardware revenue was $1.485 billion, with a gross margin of $0.206 billion. This represents a revenue increase of 37 percent but a margin decrease of 45 percent. Surface sales "more than doubled" compared to Q4 2013, with the 32GB Surface RT singled out as a strong performer (no doubt on the back of the price cuts it received). Remarkably, people are still buying Xbox 360s, with 1.2 million sold between July and September. The decline in margin is attributed to preparations for the second-generation Surface products and the increased hardware sales.

D&C Other revenue was $1.635 billion, with a gross margin of $0.352 billion. That's an increase of 17 percent for revenue but a decrease of 3 percent for gross margin. The revenue increase was driven by a substantial 47 percent growth in advertising revenue on the back of increased search query volume (with Microsoft reporting that Bing now has an 18 percent share in the US) and greater revenue per search. Xbox Live transactions also grew by more than 25 percent. Office 365 Home Premium has more than 2 million subscribers; this number has doubled since May this year.

Commercial Licensing revenue was $9.594 billion, with a gross margin of $8.801 billion. This is growth of 7 percent and 8 percent, respectively. SharePoint, Exchange, and Lync all achieved double digits growth, and multi-year licensing revenue was up 8 percent.

Commercial Other revenue was $1.603 billion and had a gross margin of $0.275 billion, growing by 28 percent and 161 percent, respectively. Cloud revenue was up by 103 percent, with both Office 365 seats and Azure customs both increasing by triple digits. Two thirds of Dynamics CRM customers are now opting for cloud deployments.

To allow further historic comparisons, the company also reported approximate figures as if reporting under the old scheme. This scheme provides some insight that's missing from the new breakdown.

Windows Division notional revenue is up 4 percent at $4.581 billion, but operating income is down 20 percent at $2.242 billion. This shows just how significant the impact of the decline of the PC market is, as well Microsoft's continued failure to capture any significant share of the tablet market.

Server and Tools revenue was up 11 percent to $5.052 billion, and operating income was up 17 percent to $2.026 billion. In contrast to the Windows Division results, this shows the much greater resilience of the purely enterprise-focused offerings.

Online Services revenue grew 25 percent to $0.872 billion, and the loss fell 12 percent to $0.321 billion. This is a loss that's completely masked by the new reporting structure. It shows, once again, that while Bing is heading in the right direction, it remains a money pit.

Microsoft Business Division revenue was up 5 percent to $5.991 billion, and operating income up by 1 percent to $3.859 billion.

Entertainment and Devices revenue was up 6 percent to $2.080 billion, but operating income was down 171 percent to a loss of $0.015 billion. This is another facet of the company that's masked by the new reporting structure. The Xbox and Windows Phone businesses are highly variable, sometimes making modest profits and other times making losses, with strong seasonal variation.

In its outlook for next quarter, Microsoft expected D&C License revenue of $5.2-5.4 billion, D&C Hardware revenue of $3.8-4.1 billion, and D&C Other revenue of $1.7-1.8 billion. On the Commercial side, License revenue is expected at about $10.7-10.9 billion, and Other revenue is expected at $1.7-1.8 billion.