FY25 Q3 - More Personal Computing Performance - Investor Relations

Earnings Release FY25 Q3

More Personal Computing

Revenue increased $767 million or 6%.

• Windows and Devices revenue increased $46 million or 1%. Windows OEM and Devices revenue increased 3% driven by growth in Windows OEM, with inventory levels remaining elevated due to tariff uncertainty.

• Gaming revenue increased $270 million or 5% driven by growth in Xbox content and services. Xbox content and services revenue increased 8% driven by growth in Xbox Game Pass, Call of Duty, and Minecraft. Xbox hardware revenue decreased 6%.

• Search and news advertising revenue increased $449 million or 15%. Search and news advertising revenue excluding traffic acquisition costs increased 21% driven by higher revenue per search and higher search volume.

Operating income increased $603 million or 21%.

• Gross margin increased $623 million or 9% driven by growth in Search and news advertising and Gaming. Gross margin percentage increased driven by improvement in Search and news advertising and Gaming.

• Operating expenses increased $20 million or 1%.

Gross margin and operating income both included an unfavorable 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.