Microsoft on Wednesday reported $70.1 billion in revenue for the March quarter, up 13%, with earnings of $3.46/share, topping Wall Street’s expectations by both measures.
Analysts expected revenue of $68.4 billion and earnings of $3.22 per share.
Microsoft’s profits rose 18% to $25.8 billion. Shares of Microsoft were up more than 6% in after-hours trading.
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” Microsoft CEO Satya Nadella said in a statement. “From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.”
Nadella will speak with analysts about the results and provide guidance this afternoon.
The company’s report comes amid questions about adoption of its AI products and broader macroeconomic headwinds including tariff-related policy.
- Many businesses that drive Microsoft’s revenue are becoming more cautious in their spending on cloud computing, enterprise software, and AI services, according to analyst reports, citing information from Microsoft partners and customers.
- The company generates a large share of its revenue from software and cloud services rather than hardware, making it less vulnerable to tariffs that primarily target goods and manufacturing. But some areas of its business, such as computing and gaming devices, could be impacted.
Here are key takeaways from the latest earnings report:
Revenue was up in each of the three divisions used by Microsoft in its financial reporting.
- Productivity and Business Processes (Office, LinkedIn, Dynamics) rose 10% to $29.9 billion.
- Intelligent Cloud (Azure, Windows Server) rose 21% to $26.8 billion.
- More Personal Computing (Windows, devices, gaming) rose 6% to $13.4 billion.
Microsoft Cloud revenue was $42.4 billion, up 20% year-over-year.
- This measure includes Microsoft 365 Commercial cloud, Azure and other cloud services, and the commercial portions of LinkedIn and Dynamics 365.
Revenue from Microsoft’s Azure cloud platform and related services for the latest quarter was up 33%, ahead of expectations. About 16 percentage points of this growth came from artificial intelligence, up from 13 points last quarter.
- In a report last week, Cantor Fitzgerald said interest in the company’s Copilot AI assistant remains strong, but many customers are looking for more business justification before committing.
- Microsoft said in January that its AI products were generating revenue at a rate of $13 billion annually, up from $10 billion previously.
- Speaking at Meta’s LlamaCon 2025 this week, Nadella said up to 30% of Microsoft’s own code is written by AI.
Microsoft reported capital expenditures of $21.4 billion, slightly lower than the company’s expectations, and down from $22.6 billion in the previous quarter.
- Microsoft has said it plans to spend more than $80 billion this year to grow its cloud and AI infrastructure. The company recently said it is slowing or pausing some AI data center construction.
Microsoft’s stock is down more than 6% this year, while still outperforming many of its tech industry peers.
- Microsoft is the world’s second-most valuable publicly traded company with a market capitalization of nearly $3 trillion, just behind Apple.
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