FY25 Q2 - Productivity and Business Processes Performance - Investor Relations

Earnings Release FY25 Q2

Productivity and Business Processes

Revenue increased $3.6 billion or 14%.

• Microsoft 365 Commercial products and cloud services revenue increased $2.8 billion or 15%. Microsoft 365 Commercial cloud revenue grew 16% with Microsoft 365 Commercial seat growth of 7% driven by small and medium business and frontline worker offerings, as well as growth in revenue per user. Microsoft 365 Commercial products revenue grew 13% driven by the Windows Commercial on-premises components of Microsoft 365 suite sales and an increase in transactional purchasing with the launch of Office 2024.

• Microsoft 365 Consumer products and cloud services revenue increased $142 million or 8%. Microsoft 365 Consumer cloud revenue grew 8% driven by Microsoft 365 Consumer subscriber growth of 10% to 86.3 million with mix shift to Microsoft 365 Basic.

• LinkedIn revenue increased $392 million or 9% driven by growth across all lines of business – Marketing Solutions, Talent Solutions, Premium Subscriptions, and Sales Solutions.

• Dynamics products and cloud services revenue increased $254 million or 15% driven by growth in Dynamics 365, offset in part by a decline in Dynamics on-premises products. Dynamics 365 revenue grew 19% driven by growth across all workloads.

Operating income increased $2.4 billion or 16%.

• Gross margin increased $2.8 billion or 13% driven by growth in Microsoft 365 Commercial cloud. Gross margin percentage decreased slightly driven by scaling our AI infrastructure.

• Operating expenses increased $390 million or 6% driven by investments in cloud engineering.

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