“FX should increase COGS growth by roughly one point with no impact to operating expense growth.”

In context

“driven by a sales mix shift to higher-margin businesses. Against a low prior-year comparable, operating expenses increased 76% in constant currency driven by impairment and other related expenses in our gaming business, as well as continued investments in shared R&D mentioned earlier that benefits the entire portfolio. Operating income increased 41% in constant currency, and operating margins increased year over year to 28%. Now moving to our Q4 outlook, which, unless specifically noted otherwise, is on a US dollar basis. Based on current rates, we expect FX to increase revenue growth by roughly one point in Productivity and Business Processes and More Personal Computing, with no meaningful impact to Intelligent Cloud. Overall impact to total revenue is expected to be less than one point. FX should increase COGS growth by roughly one point with no impact to operating expense growth. Starting with our commercial business, in commercial bookings, when adjusted for the impact from OpenAI, we expect healthy growth on a growing expiry base with consistent execution in our core annuity sales motions against a significant prior-year comparable. Microsoft Cloud gross margin percentage should be roughly 64%, down year over year driven by continued investments in AI and increased GitHub Copilot usage. Just this week, we announced a business model transition in GitHub Copilot that will align pricing with usage and value that takes effect on June 1. Now to segment guidance. In Productivity and Business Processes, we expect revenue of $37.0 to $37.3 billion or growth of 12% to 13%. In Microsoft 365 Commercial cloud on an adjusted basis, we expect revenue growth to be between 15 a”