FY24 Q3 - More Personal Computing Performance - Investor Relations

Earnings Release FY24 Q3

More Personal Computing

Revenue increased $2.3 billion or 17%.

• Windows revenue increased $601 million or 11% driven by growth in Windows Commercial and Windows OEM. Windows Commercial products and cloud services revenue increased 13% driven by demand for Microsoft 365. Windows OEM revenue increased 11%.

• Gaming revenue increased $1.8 billion or 51% driven by growth in Xbox content and services. Xbox content and services revenue increased 62% driven by 61 points of net impact from the Activision Blizzard acquisition. Xbox hardware revenue decreased 31% driven by lower volume of consoles sold.

• Search and news advertising revenue increased $98 million or 3%. Search and news advertising revenue excluding traffic acquisition costs increased 12% driven by higher search volume.

• Devices revenue decreased $215 million or 17%.

Operating income increased $688 million or 16%.

• Gross margin increased $2.0 billion or 27% driven by growth in Gaming, with 13 points of net impact from the Activision Blizzard acquisition, as well as growth in Windows. Gross margin percentage increased driven by sales mix shift to higher margin businesses.

• Operating expenses increased $1.3 billion or 41% driven by Gaming, with 43 points of growth from the Activision Blizzard acquisition.

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