FY25 Q1 - Intelligent Cloud Performance - Investor Relations

Earnings Release FY25 Q1

Intelligent Cloud

Revenue increased $4.1 billion or 20%.

• Server products and cloud services revenue increased $4.1 billion or 23% driven by Azure and other cloud services. Azure and other cloud services revenue grew 33% driven by demand for our portfolio of services, including 12 points from our AI services. Server products revenue decreased 1% driven by lower transactional purchasing ahead of the Windows Server 2025 launch, as well as lower purchasing of licenses running in multi-cloud environments.

• Enterprise and partner services revenue decreased $16 million or 1%.

Operating income increased $1.6 billion or 18%.

• Gross margin increased $2.0 billion or 15% driven by growth in Azure. Gross margin percentage decreased driven by scaling our AI infrastructure.

• Operating expenses increased $372 million or 8% driven by investments in Azure.

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.