FY18 Q2 - Productivity and Business Processes Performance - Investor Relations - Microsoft

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Earnings Release FY18 Q2

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Productivity and Business Processes

Revenue increased $1.8 billion or 25%, primarily due to LinkedIn and higher revenue from Office.

• LinkedIn revenue increased $1.1 billion to $1.3 billion. LinkedIn revenue primarily consisted of revenue from Talent Solutions.

• Office Commercial revenue increased $552 million or 10%, driven by Office 365 commercial revenue growth, mainly due to growth in subscribers, offset in part by lower revenue from products licensed on-premises, reflecting a continued shift to Office 365 commercial.

• Office Consumer revenue increased $103 million or 12%, driven by Office 365 consumer revenue growth, mainly due to growth in subscribers.

• Dynamics revenue increased 10%, driven by Dynamics 365 revenue growth.

Operating income increased $284 million or 9%, primarily due to higher gross margin, offset in part by higher operating expenses.

• Gross margin increased $1.3 billion or 24%, driven by LinkedIn and growth in Office. Gross margin percentage decreased, primarily due to an increased mix of cloud offerings and LinkedIn, offset in part by gross margin percentage improvement in Office 365 commercial. LinkedIn cost of revenue increased $313 million to $432 million, including $222 million of amortization of acquired intangible assets.

• Operating expenses increased $1.0 billion or 41%, driven by LinkedIn expenses, investments in commercial sales capacity and cloud engineering, and the benefit of a legal settlement in the prior year. LinkedIn operating expenses increased $840 million to $1.1 billion, including $154 million of amortization of acquired intangible assets.

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

FY18 Earnings Release Schedule

  • Q3-Thursday, April 26
  • Q4-Thursday, July 19

Microsoft Corp (MSFT)

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