FY25 Q3 - Performance - Investor Relations

Performance

Revenue increased $8.2 billion or 13% with growth across each of our segments. Intelligent Cloud revenue increased driven by Azure. Productivity and Business Processes revenue increased driven by Microsoft 365 Commercial cloud. More Personal Computing revenue increased driven by Search and news advertising.

Cost of revenue increased $3.4 billion or 18% driven by growth in Microsoft Cloud.

Gross margin increased $4.8 billion or 11% with growth across each of our segments.

• Gross margin percentage decreased driven by Intelligent Cloud.

• Microsoft Cloud gross margin percentage decreased to 69% driven by the impact of scaling our AI infrastructure.

Operating expenses increased $375 million or 2% driven by investments in cloud and AI engineering.

Operating income increased $4.4 billion or 16% with growth across each of our segments.

Revenue, gross margin, and operating income included an unfavorable foreign currency impact of 2%, 2%, and 3%, respectively. Cost of goods sold included a favorable foreign currency impact of 2%.

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.