FY17 Q3 - Productivity and Business Processes Performance- Investor Relations - Microsoft

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Earnings Release FY17 Q3

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Productivity and Business Processes

Revenue increased $1.4 billion or 22%, driven by the acquisition of LinkedIn and higher revenue from Office 365.

• LinkedIn revenue was $975 million, primarily comprised of revenue from Talent Solutions.

• Office Commercial revenue increased $347 million or 7%, 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.

• Office Consumer revenue increased $112 million or 15%, driven by higher revenue from Office 365 consumer, mainly due to growth in subscribers.

• Dynamics revenue increased 10%, due to higher revenue from Dynamics 365.

Operating income decreased $198 million or 7%, primarily due to higher operating expenses, offset in part by an increase in gross margin. Operating income included an unfavorable foreign currency impact of 3%.

• Operating expenses increased $993 million or 44%, mainly due to LinkedIn expenses. Operating expenses included $965 million related to our acquisition of LinkedIn, including $153 million of amortization of acquired intangible assets. Sales and marketing expenses increased $522 million or 44%, research and development expenses increased $363 million or 53%, and general and administrative expenses increased $108 million or 28%.

• Gross margin increased $795 million or 15%, driven by higher revenue, offset in part by higher cost of revenue. Gross margin included an unfavorable foreign currency impact of 2%. Cost of revenue increased $642 million or 50%, driven by our acquisition of LinkedIn and an increased mix of cloud offerings. Cost of revenue included $396 million related to our acquisition of LinkedIn, including $218 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

  • Q4-Thursday, July 20