FY17Q1 - Performance - Investor Relations - Microsoft
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Earnings Release FY17 Q1
Performance
Revenue increased $74 million, driven by growth in Intelligent Cloud and Productivity and Business Processes, offset in part by an increase in the net revenue deferral from Windows 10 and lower revenue from More Personal Computing. Windows 10 revenue is primarily recognized at the time of billing in the More Personal Computing segment, and the deferral and subsequent recognition of revenue is reflected in Corporate and Other. Intelligent Cloud revenue increased, primarily due to higher revenue from server products and cloud services. Productivity and Business Processes revenue increased, driven by higher revenue from Office 365. More Personal Computing revenue decreased, mainly due to lower revenue from Devices and Gaming, offset in part by higher revenue from Search advertising. Revenue included an unfavorable foreign currency impact of 2%.
Operating income decreased $568 million or 10%, primarily due to lower gross margin and an increase in research and development expenses, offset in part by lower sales and marketing expenses. Operating income included an unfavorable foreign currency impact of 5%. Gross margin decreased $563 million or 4%, driven by higher cost of revenue. Gross margin included an unfavorable foreign currency impact of 2%.
Key changes in expenses were:
• Cost of revenue increased $637 million or 9%, mainly due to growth in our commercial cloud and Search advertising traffic acquisition costs, offset in part by a reduction in phone sales.
• Research and development expenses increased $144 million or 5%, primarily due to increased strategic investments and acquisitions to drive cloud engineering, offset in part by a reduction in phone expenses.
• Sales and marketing expenses decreased $100 million or 3%, primarily due to a reduction in phone expenses and Windows 10 launch-related expenses in the prior year, offset in part by increased investment to drive sales capacity in our commercial cloud.
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Information contained in these documents is current as of the earnings date, and not restated for new accounting standards
Earnings Release Pages
Related Information
FY17 Earnings Release Schedule
- Q2-Thursday, January 26
- Q3-Thursday, April 27
- Q4-Thursday, July 20