Microsoft Corp. posted another quarter of robust performance, underscoring the company’s accelerating strength in cloud computing and artificial intelligence.
For the fiscal third quarter ended March 31, 2025, the tech giant reported revenue of $70.1 billion, up 13% from a year earlier (15% in constant currency), while net income climbed 18% to $25.8 billion. Diluted earnings per share reached $3.46, also an 18% increase.
Chairman and CEO Satya Nadella highlighted the company’s AI-driven growth engine, saying Microsoft continues to “innovate across the stack” — from cloud infrastructure and AI platforms to business and consumer applications — to help organizations improve efficiency and scale faster. CFO Amy Hood added that Microsoft Cloud revenue surged 20% year-over-year to $42.4 billion, with strong enterprise demand continuing into the next quarter.
Azure and Cloud Dominate Growth
Microsoft’s Intelligent Cloud division remained the company’s biggest growth driver, with revenue up 21% to $26.8 billion. Azure and other cloud services led the way with a 33% increase, boosted by growing adoption of generative AI infrastructure and cloud-based enterprise tools. Server products and related services also rose 22%, reflecting the continued momentum of hybrid and multi-cloud solutions.
Productivity and Business Processes Steady
Revenue from Productivity and Business Processes climbed 10% to $29.9 billion, driven by solid gains in Microsoft 365 subscriptions and Dynamics 365 adoption. Microsoft 365 Commercial products and cloud services rose 11%, while the Dynamics suite saw a 16% jump, emphasizing the ongoing digital transformation across businesses. LinkedIn also contributed, with revenue up 7% as professional hiring and advertising activity strengthened.
Consumer and Gaming Segments Rebound
The “More Personal Computing” segment grew 6% to $13.4 billion. Xbox content and services improved 8%, showing resilience in the gaming division despite broader industry slowdowns. Windows OEM and Devices rose 3%, while advertising revenue tied to search and news climbed a notable 21%, supported by increased engagement across Microsoft’s AI-enhanced advertising tools.
Shareholder Returns and Outlook
During the quarter, Microsoft returned $9.7 billion to shareholders through dividends and stock repurchases. While the company did not issue a detailed outlook in its release, it plans to share forward guidance during its earnings call, with analysts expecting AI-related growth to remain a key driver through the rest of fiscal 2025.
AI and Product Innovation Continue to Lead
Microsoft emphasized its continued investment in AI research and product integration across its ecosystem — from Microsoft 365 Copilot and Azure OpenAI Services to new developer tools for building custom AI models. The company noted that these initiatives, backed by years of R&D spending, are designed to enhance productivity, improve security, and expand capabilities at both the enterprise and consumer levels.
ESG and Corporate Governance
Microsoft reiterated its focus on sustainability, transparency, and responsible AI practices. The company’s ESG and governance initiatives are detailed in its latest investor relations report, which outlines its approach to reducing environmental impact and advancing ethical technology standards.
Summary
With consistent double-digit growth across its major divisions and record cloud revenue, Microsoft’s Q3 FY25 results reaffirm the company’s leadership in the AI and cloud computing landscape. As enterprises accelerate adoption of AI-driven solutions, Microsoft’s strong position in infrastructure, productivity software, and gaming continues to fuel long-term investor confidence.
