FY25 Q2 - More Personal Computing Performance - Investor Relations

Earnings Release FY25 Q2

More Personal Computing

Revenue was relatively unchanged.

• Windows and Devices revenue increased $149 million or 3%. Windows OEM and Devices revenue increased 4% as commercial inventory builds drove growth in Windows OEM, offset in part by a decline in Devices.

• Gaming revenue decreased $530 million or 7% driven by a decline in Xbox hardware, offset in part by growth in Xbox content and services. Xbox hardware revenue decreased 29% driven by lower volume of consoles sold. Xbox content and services revenue increased 2% driven by growth in Xbox Game Pass.

• Search and news advertising revenue increased $390 million or 12%. Search and news advertising revenue excluding traffic acquisition costs increased 21% driven by higher search volume and higher revenue per search.

Operating income increased $955 million or 32%, including a favorable foreign currency impact of 2%.

• Gross margin increased $898 million or 13% driven by growth in Gaming, Search and news advertising, and Windows and Devices. Gross margin percentage increased driven by sales mix shift to higher margin businesses and improvement in Gaming and Search and news advertising.

• Operating expenses decreased $57 million or 1% primarily driven by Gaming.

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.