FY19 Q2 - More Personal Computing Performance- Investor Relations - Microsoft

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Earnings Release FY19 Q2

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More Personal Computing

Revenue increased $823 million or 7%.

• Windows revenue decreased $81 million or 2%, driven by a decrease in Windows OEM and patent licensing, offset in part by growth in Windows Commercial. Windows OEM revenue decreased 5%. Windows OEM non-Pro revenue declined 11%, below the consumer PC market, with continued pressure in the entry-level category. Windows OEM Pro revenue declined 2%, in line with the commercial PC market. Windows Commercial revenue increased 13%, with continued customer adoption of premium offerings.

• Surface revenue increased $525 million or 39%, with strong growth across consumer and commercial.

• Gaming revenue increased $312 million or 8%, driven by Xbox software and services growth of 31%, primarily due to third-party title strength, offset in part by a decline in Xbox hardware of 19% due to the launch of Xbox One X in the second quarter of fiscal year 2018.

• Search advertising revenue increased $156 million or 9%. Search advertising revenue, excluding traffic acquisition costs, increased 14%, driven by growth in Bing, due to higher revenue per search and search volume.

Operating income increased $454 million or 18%.

• Gross margin increased $323 million or 6%, driven by growth in Gaming and Search. Gross margin percentage decreased slightly, due to sales mix shift to our lower margin Surface and Gaming businesses.

• Operating expenses decreased $131 million or 4%, driven by a decline in Windows and Gaming marketing.

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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