“Hardware revenue will decline year-over-year.”

In context

“lts may differ based on current tariff uncertainties. Devices revenue will decline. Search and News advertising ex-TAC revenue growth should be in the mid-teens from continued growth in both volume and revenue per search with share gains across Edge and Bing. Growth is expected to moderate from last quarter primarily due to additional FX impact and as the third-party partnership usage noted earlier returns to more normal levels. Search ex-TAC growth will be higher than overall Search and News advertising revenue growth, which we expect to be in the mid to high-single-digits. And in Gaming, we expect revenue growth to be in the low-single-digits. We expect Xbox content and services revenue growth to be in the low to mid-single-digits driven by first-party content as well as Xbox Game Pass. Hardware revenue will decline year-over-year. Now back to company guidance. We expect COGS to grow between 19% and 20% in constant currency or to be between $21.65 billion to $21.85 billion and operating expense to grow between 5% and 6% in constant currency or to be between $16.4 billion and $16.5 billion. Other income and expense is expected to be roughly negative $1 billion primarily driven by investments accounted for under the equity method. As a reminder, we do not recognize mark-to-market gains or losses on equity method investments. And lastly, we expect our Q3 effective tax rate to be approximately 18%. Now some additional thoughts on the rest of the fiscal year and beyond. First, FX. With the strengthening of the US dollar since October, we now expect FX to decrease Q4 revenue and COGS growth by more than one point and oper”