FY18 Q2 - Intelligent Cloud Performance - Investor Relations - Microsoft

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Earnings Release FY18 Q2

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Intelligent Cloud

Revenue increased $1.0 billion or 15%, primarily due to higher revenue from server products and cloud services.

• Server products and cloud services revenue increased $967 million or 18%, driven by Azure revenue growth of 98% and server products licensed on-premises revenue growth of 4%.

• Enterprise Services revenue increased $64 million or 5%, driven by higher revenue from Premier Support Services and Microsoft Consulting Services, offset in part by a decline in revenue from custom support agreements.

Operating income increased $541 million or 24%, primarily due to higher gross margin, offset in part by higher operating expenses.

• Gross margin increased $625 million or 13%, driven by growth in server products and cloud services revenue and cloud services scale and efficiencies. Gross margin percentage decreased, primarily due to an increased mix of cloud offerings, offset in part by gross margin percentage improvement in Azure.

• Operating expenses increased $84 million or 3%, driven by the benefit of a legal settlement in the prior year and investments in cloud engineering and commercial sales capacity.

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

FY18 Earnings Release Schedule

  • Q3-Thursday, April 26
  • Q4-Thursday, July 19