“Therefore, we expect COGS of $29.4 to $29.6 billion or growth of 22% to 23%, including roughly $350 million from the retirement program, and operating expense of $19.3 to $19.4 billion or growth of approximately 7%, including roughly $550 million from the retirement program.”

In context

“evenue ex-TAC growth should be in the high single digits driven by revenue per search and volume with continued share gains across Bing and Edge. In Xbox content and services, we expect revenue to decline in the low teens, reflecting a prior-year comparable that benefited from strong first-party content as well as the recent price changes for Xbox Game Pass as we focus on delivering more value to gamers. Hardware revenue should decline year over year. Therefore, at the total company level, revenue should be between $86.7 and $87.8 billion or growth of 13% to 15%, with accelerating commercial growth partially offset by our consumer business. Our Q4 outlook for COGS and operating expenses includes roughly $900 million in one-time cost for the recently announced voluntary retirement program. Therefore, we expect COGS of $29.4 to $29.6 billion or growth of 22% to 23%, including roughly $350 million from the retirement program, and operating expense of $19.3 to $19.4 billion or growth of approximately 7%, including roughly $550 million from the retirement program. Even as we invested through the year in additional capacity to serve the growing AI platform, apps, and services demand, and inclusive of these one-time costs, we expect full-year FY '26 operating margins to be up about one point year over year. Excluding any impact from our investments in OpenAI, other income and expense is expected to be roughly negative $100 million as interest income will be more than offset by interest expense, which includes the interest payments related to data center finance leases. We expect our adjusted Q4 effective tax rate to be approximately 19%. Next, capital expenditures. We expect CapEx spend to increase to over $40 billion as we continue to bring more capacity online. The sequential increase includes roughly $5 billion from higher component pricing as wel”