FY17 Q2 - Productivity and Business Processes Performance- Investor Relations - Microsoft

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Earnings Release FY17 Q2

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Productivity and Business Processes

Revenue increased $692 million or 10%, primarily due to higher revenue from Office 365 and the acquisition of LinkedIn. Revenue included an unfavorable foreign currency impact of 2%.

• Office Commercial revenue increased $289 million or 5%, driven by higher revenue from Office 365 commercial, mainly due to growth in subscribers, offset in part by lower revenue from products licensed on-premises, reflecting a continued shift to Office 365 commercial. Revenue included an unfavorable foreign currency impact of 2%.

• LinkedIn revenue was $228 million, primarily comprised of revenue from Talent Solutions and Marketing Solutions.

• Office Consumer revenue increased $156 million or 22%, driven by higher revenue from Office 365 consumer, mainly due to growth in subscribers.

• Dynamics revenue increased 7%, due to higher revenue from Dynamics 365.

Operating income decreased slightly, primarily due to higher operating expenses, offset in part by an increase in gross margin. Operating income included an unfavorable foreign currency impact of 2%. Operating expenses increased $288 million or 13%, mainly due to LinkedIn expenses and investments in cloud engineering. Operating expenses included $310 million related to our acquisition of LinkedIn, including $52 million of amortization of acquired intangible assets. Sales and marketing expenses increased $165 million or 13%, and research and development expenses increased $129 million or 20%. Gross margin increased $252 million or 5%, driven by higher revenue, offset in part by higher cost of revenue. Cost of revenue increased $440 million or 37%, driven by an increased mix of cloud offerings and our acquisition of LinkedIn. Cost of revenue included $119 million related to our acquisition of LinkedIn, including $72 million of amortization of acquired intangible assets.

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.

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Information contained in these documents is current as of the earnings date, and not restated for new accounting standards

FY17 Earnings Release Schedule

  • Q3-Thursday, April 27
  • Q4-Thursday, July 20

Microsoft Corp (MSFT)

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2017 ANNUAL REPORT