Earnings Release FY25 Q1

Performance

Revenue increased $9.1 billion or 16% driven by growth across each of our segments. Intelligent Cloud revenue increased driven by Azure. Productivity and Business Processes revenue increased driven by Microsoft 365 Commercial cloud. More Personal Computing revenue increased driven by Gaming.

Cost of revenue increased $3.8 billion or 23% driven by growth in Microsoft Cloud and Gaming.

Gross margin increased $5.3 billion or 13% driven by growth across each of our segments.

• Gross margin percentage decreased driven by Intelligent Cloud.

• Microsoft Cloud gross margin percentage decreased to 71% driven by scaling our AI infrastructure.

Operating expenses increased $1.6 billion or 12% driven by Gaming, with 9 points of growth from the Activision Blizzard acquisition, and investments in cloud engineering.

Operating income increased $3.7 billion or 14% driven by growth in Productivity and Business Processes and Intelligent Cloud.

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.