Earnings Release FY23 Q3

Productivity and Business Processes

Revenue increased $1.7 billion or 11%.

• Office Commercial products and cloud services revenue increased $1.3 billion or 13%. Office 365 Commercial revenue grew 14% with seat growth of 11%, driven by small and medium business and frontline worker offerings, as well as growth in revenue per user. Office Commercial products revenue declined 1% driven by continued customer shift to cloud offerings, offset in part by transactional strength in Japan.

• Office Consumer products and cloud services revenue increased $20 million or 1%. Microsoft 365 Consumer subscribers grew 12% to 65.4 million.

• LinkedIn revenue increased $260 million or 8% driven by Talent Solutions.

• Dynamics products and cloud services revenue increased 17% driven by Dynamics 365 growth of 25%.

Operating income increased $1.5 billion or 20%.

• Gross margin increased $1.7 billion or 14% driven by growth in Office 365 Commercial. Gross margin percentage increased. Excluding the impact of the change in accounting estimate, gross margin percentage increased slightly driven by improvements in Office 365 Commercial, offset in part by sales mix shift to cloud offerings.

• Operating expenses increased $213 million or 4% driven by investments in LinkedIn.

Revenue, gross margin, and operating income included an unfavorable foreign currency impact of 4%, 4%, and 7%, respectively.

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.