Browse Prior Earnings Releases:
Earnings Release FY20 Q3
More Personal Computing
Revenue increased $317 million or 3%.
• Windows revenue increased $276 million or 6%, driven by growth in Windows Commercial. Windows Commercial revenue increased 17%, primarily driven by increased demand for Microsoft 365. Windows OEM revenue was relatively unchanged. Windows OEM Pro revenue grew 5%, driven by continued Windows 10 momentum, with demand from remote work and learn scenarios, offset in part by supply chain constraints in China. Windows OEM non-Pro revenue decreased 10%, driven by continued pressure in the entry-level category and supply chain constraints in China.
• Search advertising revenue increased $75 million or 4%. Search advertising revenue, excluding traffic acquisition costs, increased 1%, with reduced advertising spend, particularly in the industries most impacted by COVID-19.
• Surface revenue increased $11 million or 1%, driven by increased demand from remote work and learn scenarios, offset in part by supply chain constraints in China.
• Gaming revenue decreased $14 million or 1%. Xbox hardware revenue decreased 20%, primarily due to a decrease in price of consoles sold. Xbox content and services revenue increased $33 million or 2%, primarily due to increased engagement following stay-at-home guidelines, offset in part by a high prior year comparable primarily from a third-party title.
Operating income increased $473 million or 15%.
• Gross margin increased $386 million or 6%, driven by growth in Windows. Gross margin percentage increased, due to sales mix shift to higher margin businesses.
• Operating expenses decreased $87 million or 3%, driven by the redeployment of engineering resources.
Gross margin and operating income each included an unfavorable foreign currency impact of 2%.
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Information contained in these documents is current as of the earnings date, and not restated for new accounting standards