FY25 Q2 - Intelligent Cloud Performance - Investor Relations

Earnings Release FY25 Q2

Intelligent Cloud

Revenue increased $4.0 billion or 19%.

• Server products and cloud services revenue increased $4.0 billion or 21% driven by Azure and other cloud services. Azure and other cloud services revenue grew 31% driven by demand for our portfolio of services, including 13 points from our AI services which grew 157%. Server products revenue decreased 3% driven by a decrease in transactional purchasing and a prior year comparable that benefited from purchasing ahead of Windows Server 2012 end of support.

• Enterprise and partner services revenue decreased $25 million or 1% driven by a decline in Industry Solutions, offset in part by growth in Enterprise Support Services.

Operating income increased $1.3 billion or 14%.

• Gross margin increased $1.8 billion or 12% driven by growth in Azure. Gross margin percentage decreased driven by scaling our AI infrastructure.

• Operating expenses increased $482 million or 10% driven by investments in cloud engineering.

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.