Microsoft Cloud and AI Strength Drives Third Quarter Results
REDMOND, Wash. — April 30, 2025 — Microsoft Corp. today announced the following results for the quarter ended March 31, 2025, as compared to the corresponding period of last fiscal year:
· Revenue was $70.1 billion and increased 13% (up 15% in constant currency)
· Operating income was $32.0 billion and increased 16% (up 19% in constant currency)
· Net income was $25.8 billion and increased 18% (up 19% in constant currency)
· Diluted earnings per share was $3.46 and increased 18% (up 19% in constant currency)
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," said Satya Nadella, chairman and chief executive officer of Microsoft. “From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.”
“We delivered a strong quarter with Microsoft Cloud revenue of $42.4 billion, up 20% (up 22% in constant currency) year-over-year driven by continued demand for our differentiated offerings,” said Amy Hood, executive vice president and chief financial officer of Microsoft.
Business Highlights
Revenue in Productivity and Business Processes was $29.9 billion and increased 10% (up 13% in constant currency), with the following business highlights:
· Microsoft 365 Commercial products and cloud services revenue increased 11% (up 14% in constant currency) driven by Microsoft 365 Commercial cloud revenue growth of 12% (up 15% in constant currency)
· Microsoft 365 Consumer products and cloud services revenue increased 10% (up 12% in constant currency) driven by Microsoft 365 Consumer cloud revenue growth of 10% (up 12% in constant currency)
· LinkedIn revenue increased 7% (up 8% in constant currency)
· Dynamics products and cloud services revenue increased 11% (up 13% in constant currency) driven by Dynamics 365 revenue growth of 16% (up 18% in constant currency)
Revenue in Intelligent Cloud was $26.8 billion and increased 21% (up 22% in constant currency), with the following business highlights:
· Server products and cloud services revenue increased 22% (up 24% in constant currency) driven by Azure and other cloud services revenue growth of 33% (up 35% in constant currency)
Revenue in More Personal Computing was $13.4 billion and increased 6% (up 7% in constant currency), with the following business highlights:
· Windows OEM and Devices revenue increased 3%
· Xbox content and services revenue increased 8% (up 9% in constant currency)
· Search and news advertising revenue excluding traffic acquisition costs increased 21% (up 23% in constant currency)
Microsoft returned $9.7 billion to shareholders in the form of dividends and share repurchases in the third quarter of fiscal year 2025.
Business Outlook
Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.
Quarterly Highlights, Product Releases, and Enhancements
Every quarter Microsoft delivers hundreds of products, either as new releases, services, or enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge.
Here are the major product releases and other highlights for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities.
Environmental, Social, and Governance (ESG)
To learn more about Microsoft’s corporate governance and our environmental and social practices, please visit our investor relations Board and ESG website and reporting at Microsoft.com/transparency.
Webcast Details
Satya Nadella, chairman and chief executive officer, Amy Hood, executive vice president and chief financial officer, Alice Jolla, chief accounting officer, Keith Dolliver, corporate secretary and deputy general counsel, and Jonathan Neilson, vice president of investor relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/en-us/investor. The webcast will be available for replay through the close of business on April 30, 2026.
Constant Currency
Microsoft
presents constant currency information to provide a framework for assessing how
our underlying businesses performed excluding the effect of foreign currency
rate fluctuations. To present this information, current and comparative prior
period results for entities reporting in currencies other than United States
dollars are converted into United States dollars using the average exchange
rates from the comparative period rather than the actual exchange rates in
effect during the respective periods. All growth comparisons relate to the
corresponding period in the last fiscal year. Microsoft has provided this
non-GAAP financial information to aid investors in better understanding our
performance. The non-GAAP financial measures presented in this release should
not be considered as a substitute for, or superior to, the measures of
financial performance prepared in accordance with GAAP.
Financial Performance Constant Currency Reconciliation
|
Three Months Ended March 31, | ||||
|---|---|---|---|---|
|
($ in millions, except per share amounts) |
Revenue |
Operating Income |
Net Income |
Diluted Earnings per Share |
|
2024 As Reported (GAAP) |
$61,858 |
$27,581 |
$21,939 |
$2.94 |
|
2025 As Reported (GAAP) |
$70,066 |
$32,000 |
$25,824 |
$3.46 |
|
Percentage Change Y/Y (GAAP) |
13% |
16% |
18% |
18% |
|
Constant Currency Impact |
$(1,059) |
$(703) |
$(392) |
$(0.05) |
|
Percentage Change Y/Y Constant Currency |
15% |
19% |
19% |
19% |
Segment Revenue Constant Currency Reconciliation
|
Three Months Ended March 31, | |||
|---|---|---|---|
|
($ in millions) |
Productivity and Business Processes |
Intelligent Cloud |
More Personal Computing |
|
2024 As Reported (GAAP) |
$27,113 |
$22,141 |
$12,604 |
|
2025 As Reported (GAAP) |
$29,944 |
$26,751 |
$13,371 |
|
Percentage Change Y/Y (GAAP) |
10% |
21% |
6% |
|
Constant Currency Impact |
$(626) |
$(308) |
$(125) |
|
Percentage Change Y/Y Constant Currency |
13% |
22% |
7% |
We have recast certain prior period amounts to conform to the way we internally manage and monitor our business.
Selected Product and Service Revenue Constant Currency Reconciliation
|
Three Months Ended March 31, 2025 | |||
|---|---|---|---|
|
Percentage Change Y/Y (GAAP) |
Constant Currency Impact |
Percentage Change Y/Y Constant Currency | |
|
Microsoft Cloud |
20% |
2% |
22% |
|
Microsoft 365 Commercial products and cloud services |
11% |
3% |
14% |
|
Microsoft 365 Commercial cloud |
12% |
3% |
15% |
|
Microsoft 365 Consumer products and cloud services |
10% |
2% |
12% |
|
Microsoft 365 Consumer cloud |
10% |
2% |
12% |
|
|
7% |
1% |
8% |
|
Dynamics products and cloud services |
11% |
2% |
13% |
|
Dynamics 365 |
16% |
2% |
18% |
|
Server products and cloud services |
22% |
2% |
24% |
|
Azure and other cloud services |
33% |
2% |
35% |
|
Windows OEM and Devices |
3% |
0% |
3% |
|
Xbox content and services |
8% |
1% |
9% |
|
Search and news advertising excluding traffic acquisition costs |
21% |
2% |
23% |
About Microsoft
Microsoft (Nasdaq “MSFT” @microsoft) creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of our customers. The technology company is committed to making AI available broadly and doing so responsibly, with a mission to empower every person and every organization on the planet t
