FY25 Q3 - Intelligent Cloud Performance - Investor Relations

Intelligent Cloud

Revenue increased $4.6 billion or 21%.

• Server products and cloud services revenue increased $4.5 billion or 22% driven by Azure and other cloud services. Azure and other cloud services revenue grew 33% driven by demand for our portfolio of services, including 16 points from our AI services. Server products revenue decreased 6% primarily driven by a decrease in transactional purchasing with continued customer shift to cloud offerings.

• Enterprise and partner services revenue increased $85 million or 5% driven by growth in Enterprise Support Services, offset in part by a decline in Industry Solutions.

Operating income increased $1.6 billion or 17%.

• Gross margin increased $1.9 billion or 13% driven by growth in Azure. Gross margin percentage decreased driven by the impact of scaling our AI infrastructure.

• Operating expenses increased $302 million or 6% driven by investments in cloud and AI engineering.

IMPORTANT NOTICE TO USERS (summary only, click here for full text of notice) All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. We do not endorse third-party information. All information speaks as of the last fiscal quarter or year for which we have filed a Form 10-K or 10-Q, or for historical information the date or period expressly indicated in or with such information. We undertake no duty to update the information. Forward-looking statements are subject to risks and uncertainties described in our Forms 10-Q and 10-K.