FY19 Q2 - Intelligent Cloud Performance - Investor Relations - Microsoft

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Earnings Release FY19 Q2

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Intelligent Cloud

Revenue increased $1.6 billion or 20%.

• Server products and cloud services revenue, including GitHub, increased $1.5 billion or 24%, driven by Azure. Azure revenue growth was 76%, due to higher infrastructure-as-a-service and platform-as-a-service consumption-based and per user-based services. Server products revenue increased 3%, due to a higher mix of premium licenses for Windows Server and GitHub.

• Enterprise Services revenue increased $86 million or 6%, driven by growth in Premier Support Services and Microsoft Consulting Services.

Operating income increased $447 million or 16%.

• Gross margin increased $1.1 billion or 20%, driven by growth in server products and cloud services revenue and cloud services scale and efficiencies. Gross margin percentage increased slightly, due to gross margin percentage improvement in Azure, offset by an increased mix of cloud offerings.

• Operating expenses increased $644 million or 26%, driven by investments in cloud and artificial intelligence (“AI”) engineering, GitHub, 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

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