Earnings Release FY22 Q1

Productivity and Business Processes

Revenue increased $2.7 billion or 22%.

• Office Commercial products and cloud services revenue increased $1.4 billion or 18%. Office 365 Commercial revenue grew 23% driven by seat growth, up 17% with continued momentum in small and medium business and frontline worker offerings, and higher revenue per user. Office Commercial products revenue declined 13% driven by continued customer shift to cloud offerings, on a low prior year comparable impacted by a slowdown in transactional licensing.

• Office Consumer products and cloud services revenue increased $135 million or 10% driven by Microsoft 365 Consumer subscription revenue, on a strong prior year comparable. Microsoft 365 Consumer subscribers increased 19% to 54.1 million.

• LinkedIn revenue increased $930 million or 42% driven by advertising demand in our Marketing Solutions business and an improving job market in our Talent Solutions business.

• Dynamics products and cloud services revenue increased 31% driven by Dynamics 365 growth of 48%.

Operating income increased $1.9 billion or 33%.

• Gross margin increased $2.2 billion or 22% driven by growth in Office 365 Commercial and LinkedIn. Gross margin percentage increased slightly. Excluding the impact of the change in accounting estimate, gross margin percentage increased 2 points, driven by improvement across all cloud services.

• Operating expenses increased $290 million or 7% driven by investments in cloud engineering and LinkedIn.

Revenue, gross margin, and operating income included a favorable foreign currency impact of 2%, 2%, and 4%, 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.