Microsoft Q3: Azure Surges 33% as Cloud Revenue Hits $42.4B
Rhea-AI Summary
Microsoft reported robust Q3 FY2025 financial results, with revenue reaching $70.1 billion, up 13% year-over-year. The tech giant's performance was primarily driven by strong Cloud and AI growth, with Microsoft Cloud revenue hitting $42.4 billion, a 20% increase.
Key financial metrics showed impressive growth:
- Operating Income: $32.0 billion (+16%)
- Net Income: $25.8 billion (+18%)
- Earnings Per Share: $3.46 (+18%)
Segment performance highlights included Azure cloud services growing 33%, Productivity and Business Processes revenue reaching $29.9 billion (+10%), and Intelligent Cloud revenue hitting $26.8 billion (+21%). The More Personal Computing segment generated $13.4 billion (+6%). During Q3, Microsoft returned $9.7 billion to shareholders through dividends and share repurchases.
Positive
- Revenue grew 13% YoY to $70.1B
- Operating income increased 16% to $32B
- Net income up 18% to $25.8B
- EPS rose 18% to $3.46
- Microsoft Cloud revenue reached $42.4B, up 20%
- Azure cloud services revenue surged 33%
- Dynamics 365 revenue grew 16%
- Search and news advertising revenue increased 21%
- $9.7B returned to shareholders via dividends and buybacks
Negative
- Windows OEM and Devices revenue showed modest 3% growth
- LinkedIn revenue growth slowed to 7%
- Xbox content services revenue grew only 8%, below other segments
Insights
Microsoft delivered exceptional Q3 results with double-digit growth across all metrics, driven by cloud services and AI implementation.
Microsoft's Q3 FY2025 results showcase robust financial performance with consistent double-digit growth across all key metrics. Revenue increased
The company's cloud business continues to be the primary growth driver, with Microsoft Cloud revenue reaching
Examining segment performance reveals varied growth rates:
- Intelligent Cloud showed the strongest growth at
21% , reaching$26.8 billion - Productivity and Business Processes grew
10% to$29.9 billion - More Personal Computing increased
6% to$13.4 billion
Within these segments, several services demonstrated particularly strong performance:
- Azure and other cloud services grew
33% (35% in constant currency) - Dynamics 365 revenue increased
16% (18% in constant currency) - Search and news advertising revenue rose
21% (23% in constant currency)
Microsoft also returned
The financial results demonstrate Microsoft's ability to maintain strong growth momentum despite its already substantial scale, particularly in cloud services and AI-related offerings which CEO Satya Nadella described as "essential inputs for every business."
Microsoft's strong cloud and AI results demonstrate successful execution of its strategy, with Azure's 33% growth highlighting market demand.
Microsoft's Q3 FY2025 results highlight the company's successful execution in cloud services and AI-driven solutions. The
CEO Satya Nadella's statement that "Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth" indicates how Microsoft is positioning its technological offerings as fundamental business necessities rather than optional tools. This framing aligns with the company's strategy to embed its services deeply into enterprise operations.
The segment breakdown reveals Microsoft's strength across its diversified portfolio:
- Microsoft 365 Commercial cloud services grew
12% (15% in constant currency), showing continued demand for productivity tools - Server products and cloud services revenue increased
22% (24% in constant currency) - LinkedIn revenue rose
7% (8% in constant currency) - Xbox content and services expanded
8% (9% in constant currency)
The
The consistency of growth across Microsoft's product lines illustrates how the company has successfully diversified beyond its original core Windows and Office businesses. The results show Microsoft's product portfolio spans consumer services, enterprise productivity, cloud infrastructure, and gaming, providing multiple growth vectors as technology adoption continues across industries.
These results demonstrate how Microsoft's long-term strategic focus on cloud and AI is translating into financial performance, as businesses continue to adopt these technologies to improve operations and create new capabilities.
Microsoft Corp. (MSFT) announced on April 30, 2025, its financial results for the third quarter of its fiscal year 2025, ended March 31, 2025. The company reported significant growth driven primarily by the performance of its Cloud and Artificial Intelligence (AI) offerings.
Financial Performance Highlights
Microsoft reported double-digit growth in key financial metrics compared to the same period last year. The company stated the following results:
- Revenue:
$70.1 billion 13% 15% - Operating Income:
$32.0 billion 16% 19% - Net Income:
$25.8 billion 18% 19% - Diluted Earnings Per Share (EPS):
$3.46 18% 19%
The technology giant attributed the strong quarterly performance to continued demand for its services, particularly within the Microsoft Cloud segment.
“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, in the release. “From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.”
Amy Hood, executive vice president and chief financial officer of Microsoft, noted the contribution of the cloud business, stating, “We delivered a strong quarter with Microsoft Cloud revenue of
Segment Performance
Microsoft breaks down its revenue into three main segments. Performance highlights for the quarter ended March 31, 2025, compared to the prior year, include:
Productivity and Business Processes
Revenue in this segment reached
- Microsoft 365 Commercial products and cloud services revenue grew
11% 14% 12% 15% - Microsoft 365 Consumer products and cloud services revenue increased
10% 12% 10% 12% - LinkedIn revenue rose
7% 8% - Dynamics products and cloud services revenue increased
11% 13% 16% 18%
Intelligent Cloud
This segment reported revenue of
- Server products and cloud services revenue grew
22% 24% - Azure and other cloud services revenue saw significant growth of
33% 35%
More Personal Computing
Revenue in More Personal Computing was
- Windows OEM and Devices revenue increased by
3% - Xbox content and services revenue grew
8% 9% - Search and news advertising revenue, excluding traffic acquisition costs (TAC), rose
21% 23%
Shareholder Returns and Outlook
Microsoft stated that it returned
Regarding future performance, the company indicated that it will provide forward-looking guidance during its earnings conference call and webcast held on April 30, 2025.
The press release also noted that Microsoft delivers numerous product releases and enhancements each quarter as a result of significant research and development investments, pointing to a separate list for major highlights.
Constant Currency Basis
Microsoft provided constant currency figures to help investors assess underlying business performance by excluding the effects of foreign currency fluctuations. According to the release, these non-GAAP figures are calculated by converting current and prior period results reported in foreign currencies into U.S. dollars using average exchange rates from the comparative period. The company cautioned that these non-GAAP measures should not substitute GAAP figures.
This article is based solely on information provided in Microsoft Corp.'s press release dated April 30, 2025. The content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Stock Titan and its writers make no representations as to the accuracy, completeness, or timeliness of the information. Investors should conduct their own due diligence before making any investment decisions.
Source: Microsoft Corp.
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