Earnings Release FY24 Q2

Productivity and Business Processes

Revenue increased $2.2 billion or 13%.

• Office Commercial products and cloud services revenue increased $1.5 billion or 15%. Office 365 Commercial revenue grew 17% with seat growth of 9%, driven by small and medium business and frontline worker offerings, as well as growth in revenue per user. Office Commercial products revenue declined 17% driven by continued customer shift to cloud offerings.

• Office Consumer products and cloud services revenue increased $74 million or 5%. Microsoft 365 Consumer subscribers grew 16% to 78.4 million.

• LinkedIn revenue increased $362 million or 9% driven by growth across all lines of business – Talent Solutions, Marketing Solutions, Premium Subscriptions, and Sales Solutions.

• Dynamics products and cloud services revenue increased $274 million or 21% driven by Dynamics 365 growth of 27%.

Operating income increased $2.1 billion or 26%.

• Gross margin increased $1.8 billion or 14% driven by growth in Office 365 Commercial. Gross margin percentage increased slightly. Excluding the impact of the change in accounting estimate, gross margin percentage increased 1 point driven by improvement in Office 365 Commercial.

• Operating expenses decreased $273 million or 5% driven by 5 points of favorable impact from the prior year Q2 charge.

Gross margin and operating income both 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.