v3.25.2
SEGMENT INFORMATION AND GEOGRAPHIC DATA
 12 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
SEGMENT INFORMATION AND GEOGRAPHIC DATA

NOTE 18 — SEGMENT INFORMATION AND GEOGRAPHIC DATA

In its operation of the business, management, including our chief operating decision maker (“CODM”), who is also our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements. The primary profitability measure used by the CODM to review segment operating results is operating income. The CODM uses operating income to allocate resources during our annual planning process and throughout the year, as well as to assess the performance of our segments, primarily by monitoring actual results compared to prior periods and expected results. During the periods presented, we reported our financial performance based on the following segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.

We have recast certain prior period amounts to conform to the way we internally manage and monitor our business. Refer to Note 1 – Accounting Policies for further information.

Our reportable segments are described below.

Productivity and Business Processes

Our Productivity and Business Processes segment consists of products and services in our portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment primarily comprises:

•
Microsoft 365 Commercial products and cloud services, including Microsoft 365 Commercial cloud, comprising Microsoft 365 Commercial, Enterprise Mobility + Security, the cloud portion of Windows Commercial, the per-user portion of Power BI, Exchange, SharePoint, Microsoft Teams, Microsoft 365 Security and Compliance, and Microsoft 365 Copilot; and Microsoft 365 Commercial products, comprising Windows Commercial on-premises and Office licensed on-premises.
•
Microsoft 365 Consumer products and cloud services, including Microsoft 365 Consumer subscriptions, Office licensed on-premises, and other consumer services.
•
LinkedIn, including Talent Solutions, Marketing Solutions, Premium Subscriptions, and Sales Solutions.
•
Dynamics products and cloud services, including Dynamics 365, comprising a set of intelligent, cloud-based applications across ERP, CRM, Power Apps, and Power Automate; and on-premises ERP and CRM applications.

Intelligent Cloud

Our Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that power modern business and developers. This segment primarily comprises:

•
Server products and cloud services, including Azure and other cloud services, comprising cloud and AI consumption-based services, GitHub cloud services, Nuance Healthcare cloud services, virtual desktop offerings, and other cloud services; and Server products, comprising SQL Server, Windows Server, Visual Studio, System Center, related Client Access Licenses (“CALs”), and other on-premises offerings.
•
Enterprise and partner services, including Enterprise Support Services, Industry Solutions, Nuance professional services, Microsoft Partner Network, and Learning Experience.

More Personal Computing

Our More Personal Computing segment consists of products and services that put customers at the center of the experience with our technology. This segment primarily comprises:

•
Windows and Devices, including Windows OEM licensing (Windows Pro and non-Pro licenses sold through the OEM channel) and Devices, comprising Surface and PC accessories.
•
Gaming, including Xbox hardware and Xbox content and services, comprising first- and third-party content (including games and in-game content), Xbox Game Pass and other subscriptions, Xbox Cloud Gaming, advertising, and other cloud services.
•
Search and news advertising, comprising Bing and Copilot, Microsoft News, Microsoft Edge, and third-party affiliates.

Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. Cost of revenue is allocated in certain cases based on a relative revenue methodology. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit and are generally allocated based on relative gross margin.

In addition, certain costs are incurred at a corporate level and allocated to our segments. These allocated costs generally include legal, including settlements and fines, information technology, human resources, finance, excise taxes, field selling, shared facilities services, customer service and support, and severance incurred as part of a corporate program. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated and is generally based on relative gross margin or relative headcount.

Segment revenue, cost of revenue, operating expenses, and operating income were as follows during the periods presented:

 

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended June 30,

 

 

2025

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Productivity and Business Processes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

120,810

 

 

$

106,820

 

 

$

94,151

 

Cost of revenue

 

 

22,422

 

 

 

19,611

 

 

 

17,202

 

Operating expenses

 

 

28,615

 

 

 

27,548

 

 

 

26,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

69,773

 

 

$

59,661

 

 

$

50,074

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intelligent Cloud

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

106,265

 

$

87,464

 

$

72,944

 

Cost of revenue

 

40,171

29,611

 

24,109

Operating expenses

 

21,505

 

 

20,040

 

 

20,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

$

44,589

 

$

37,813

 

$

28,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

More Personal Computing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

54,649

 

 

$

50,838

 

 

$

44,820

 

Cost of revenue

 

 

25,238

 

 

 

24,892

 

 

 

24,552

 

Operating expenses

 

 

15,245

 

 

 

13,987

 

 

 

10,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

14,166

 

 

$

11,959

 

 

$

10,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

281,724

 

 

$

245,122

 

 

$

211,915

 

Cost of revenue

 

 

87,831

 

 

 

74,114

 

 

 

65,863

 

Operating expenses

 

 

65,365

 

 

 

61,575

 

 

 

57,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

128,528

 

 

$

109,433

 

 

$

88,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for fiscal years 2025, 2024, or 2023. Revenue, classified by the major geographic areas in which our customers were located, was as follows:

 

(In millions)

 

 

 

 

 

Year Ended June 30,

2025

2024

2023

 

 

 

United States (a)

$

144,546

$

124,704

$

106,744

Other countries

137,178

120,418

105,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

281,724

$

245,122

$

211,915

 

 

 

 

(a)
Includes billings to OEMs and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue.

Revenue, classified by significant product and service offerings, was as follows:

 

(In millions)

 

 

 

 

 

Year Ended June 30,

2025

2024

2023

 

 

 

Server products and cloud services

 

$

98,435

$

79,828

$

65,007

Microsoft 365 Commercial products and cloud services

87,767

 

76,969

66,949

Gaming

23,455

21,503

15,466

LinkedIn

17,812

 

16,372

 

14,989

Windows and Devices

 

17,314

 

 

17,026

 

17,147

Search and news advertising

13,878

 

12,306

 

12,125

Dynamics products and cloud services

 

 

7,827

 

 

 

6,831

 

 

 

5,796

 

Enterprise and partner services

 

 

7,760

 

 

 

7,594

 

 

 

7,900

 

Microsoft 365 Consumer products and cloud services

7,404

6,648

6,417

Other

 

 

72

 

 

 

45

 

 

 

119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

281,724

$

245,122

$

211,915

 

 

 

 

 

 

 

 

 

 

 

 

 

Our Microsoft Cloud revenue, which includes Microsoft 365 Commercial cloud, Azure and other cloud services, the commercial portion of LinkedIn, and Dynamics 365, was $168.9 billion, $137.7 billion, and $111.6 billion in fiscal years 2025, 2024, and 2023, respectively. These amounts are included in Microsoft 365 Commercial products and cloud services, Server products and cloud services, LinkedIn, and Dynamics products and cloud services in the table above.

Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation is included with various other costs in an overhead allocation to each segment. It is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss.

Long-lived assets, excluding financial instruments and tax assets, classified by the location of the controlling statutory company and with countries over 10% of the total shown separately, were as follows:

 

(In millions)

 

 

 

 

 

June 30,

2025

2024

2023

 

 

 

United States

$

230,069

$

186,106

$

114,380

Other countries

141,833

115,263

72,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

371,902

$

301,369

$

187,239