FY19 Q3 - Performance - Investor Relations - Microsoft

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Earnings Release FY19 Q3

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Revenue increased $3.8 billion or 14%, driven by growth across each of our segments. Intelligent Cloud revenue increased, driven by server products and cloud services. Productivity and Business Processes revenue increased, driven by Office and LinkedIn. More Personal Computing revenue increased, driven by Windows and Surface.

Gross margin increased $2.9 billion or 16%, driven by growth across each of our segments. Gross margin percentage increased, driven by gross margin percentage improvement in More Personal Computing and Productivity and Business Processes, and favorable segment sales mix. Gross margin included a 5 percentage point improvement in commercial cloud, primarily from Azure.

Operating income increased $2.0 billion or 25%, driven by growth across each of our segments.

Key changes in expenses were:

Cost of revenue increased $901 million or 10%, driven by growth in commercial cloud and Surface.

Research and development expenses increased $601 million or 16%, driven by investments in cloud engineering, Gaming, GitHub, and LinkedIn.

Sales and marketing expenses increased $230 million or 5%, driven by investments in LinkedIn, GitHub, and commercial sales capacity.

Revenue, gross margin, and operating income included an unfavorable foreign currency impact of 2%. Sales and marketing expenses included a favorable foreign currency impact of 2%.

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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