Productivity and Business Processes

Revenue increased $2.2 billion or 13%.

• Office Commercial products and cloud services revenue increased $1.5 billion or 15%. Office 365 Commercial revenue grew 17% with seat growth of 9%, driven by small and medium business and frontline worker offerings, as well as growth in revenue per user. Office Commercial products revenue declined 17% driven by continued customer shift to cloud offerings.

• Office Consumer products and cloud services revenue increased $74 million or 5%. Microsoft 365 Consumer subscribers grew 16% to 78.4 million.

• LinkedIn revenue increased $362 million or 9% driven by growth across all lines of business – Talent Solutions, Marketing Solutions, Premium Subscriptions, and Sales Solutions.

• Dynamics products and cloud services revenue increased $274 million or 21% driven by Dynamics 365 growth of 27%.

Operating income increased $2.1 billion or 26%.

• Gross margin increased $1.8 billion or 14% driven by growth in Office 365 Commercial. Gross margin percentage increased slightly. Excluding the impact of the change in accounting estimate, gross margin percentage increased 1 point driven by improvement in Office 365 Commercial.

• Operating expenses decreased $273 million or 5% driven by 5 points of favorable impact from the prior year Q2 charge.

Gross margin and operating income both included a favorable foreign currency impact of 2%.