FY25 Q1 - More Personal Computing Performance - Investor Relations

Earnings Release FY25 Q1

More Personal Computing

Revenue increased $1.9 billion or 17%.

• Windows and Devices revenue decreased slightly. Windows OEM and Devices revenue increased 2% driven by growth in Windows OEM, offset in part by a decline in Devices.

• Gaming revenue increased $1.7 billion or 43% driven by growth in Xbox content and services. Xbox content and services revenue increased 61% driven by 53 points of net impact from the Activision Blizzard acquisition. Xbox hardware revenue decreased 29% driven by lower volume of consoles sold.

• Search and news advertising revenue increased $207 million or 7%. Search and news advertising revenue excluding traffic acquisition costs increased 18% driven by higher search volume and higher revenue per search.

Operating income decreased $157 million or 4%.

• Gross margin increased $984 million or 16% driven by growth in Gaming, with 12 points of net impact from the Activision Blizzard acquisition. Gross margin percentage was relatively unchanged as improvement in Gaming and Search and news advertising was offset by sales mix shift to those businesses.

• Operating expenses increased $1.1 billion or 49% driven by Gaming, with 51 points of growth from the Activision Blizzard acquisition.

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