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Microsoft reported $70.1 billion in revenue, up 13% year over year, and $25.8 billion in net income, up 18%, for the quarter ended March 31, 2025. Announced April 30, these were the company’s fiscal third-quarter 2025 results—not a current earnings report. The central story was fast cloud growth alongside exceptionally large, continuing investment in AI infrastructure.
Microsoft’s fiscal Q3 2025 results at a glance
Microsoft’s headline revenue figure is rounded to one decimal place. The company’s reported financial measure was revenue; net income is a separate measure of profit.
| Measure | Result |
|---|---|
| Period | Quarter ended March 31, 2025 (fiscal Q3 2025) |
| Announcement | April 30, 2025 |
| Revenue | $70.1 billion, up 13% year over year |
| Net income | $25.8 billion, up 18% year over year |
| Quarterly capital spending | $21.4 billion |
| Shareholder returns | $9.7 billion: $6.2 billion in dividends and $3.5 billion in share repurchases |
The figures and segment details were reported in contemporaneous coverage of Microsoft’s earnings. Microsoft’s fiscal Q3 is the calendar quarter ending in March, so the fiscal label and quarter-end date refer to the same reporting period.
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Cloud led the growth, but Azure is not the whole segment
Microsoft’s Intelligent Cloud segment brought in $26.8 billion, up 21% from a year earlier. It includes Azure, server products, and enterprise and partner services. Within it, Azure and other cloud services revenue grew 33%, while server products and cloud services revenue rose 22%.
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Azure’s growth rate was far above the company-wide 13% increase, making cloud demand the most consequential operating signal in the report. Enterprise cloud migration and demand for computing capacity—including for AI workloads—helped make Azure central to the quarter. Microsoft’s commercial relationship with OpenAI is part of the wider AI context, as the company seeks to monetize AI through cloud infrastructure as well as software.
There is an important limit to what the reported number proves: Microsoft grouped Azure with other cloud services and did not disclose a standalone Azure revenue figure in the cited results. Nor does the 33% growth figure isolate how much came specifically from generative AI. It supports the view that cloud services were growing quickly; it does not show that every dollar of that growth was AI revenue.
Productivity subscriptions supplied a steady base
Productivity and Business Processes was Microsoft’s largest segment, with $29.9 billion in revenue, up 10%. It includes Microsoft 365, LinkedIn, and Dynamics. Microsoft said Microsoft 365 commercial products and cloud services revenue rose 11%; commercial cloud revenue increased 12%; and consumer products revenue rose 5%.
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Commercial seats increased 7%, while Microsoft 365 consumer subscribers rose 9% to 87.7 million. These figures point to a recurring subscription base growing steadily, though more slowly than Azure and other cloud services. That distinction matters: the company’s results combined a durable productivity business with faster-growing cloud operations rather than showing every division accelerating at the same pace.
AI investment remained enormous despite a sequential spending dip
Microsoft reported $21.4 billion in capital spending for the quarter, about $1 billion below the preceding quarter. But that quarter-to-quarter decline was not an abandonment of AI investment. Microsoft maintained an expectation of approximately $80 billion in AI infrastructure investment for fiscal 2025, which ended June 30, 2025, and expected AI build-out spending to rise sequentially in the following quarter.
The company also indicated that it had slowed or paused some longer-term data-center construction and was shifting some investment toward shorter-lived assets such as servers and chips. That change in timing and asset mix can help connect spending to capacity that is available sooner; by itself, it does not demonstrate that demand weakened. Conversely, robust Azure growth does not prove that the infrastructure spending will earn an adequate return.
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For investors, the key trade-off was growth versus the cost of delivering it. The quarter showed rising revenue and profit while Microsoft committed very large sums to expand capacity. The long-term test is whether demand and monetization from cloud and AI can support those investments—not simply whether spending or usage is high.
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Microsoft disclosed a $623 million loss related to OpenAI, partially offset by net gains on derivatives and investments. This is an accounting and investment disclosure. It is not a measure of Azure’s profitability, Microsoft’s total economic exposure to OpenAI, or the full cost of the company’s AI strategy.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Gaming grew even as Xbox hardware declined
More Personal Computing generated $13.4 billion, up 6%. This segment includes Windows OEM revenue, Surface and devices, Xbox and gaming, search, news, and advertising. Windows OEM and devices revenue increased 3%. Gaming revenue rose 5%, but the mix was uneven: Xbox content and services revenue rose 8%, while Xbox hardware revenue fell 6%. Search and news advertising revenue climbed 21%.
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So “gaming growth” does not mean Xbox consoles grew. Content and services, along with advertising, helped offset hardware weakness; the reported segment total blends businesses moving at different speeds.
Expectations and the after-hours reaction
Contemporaneous market coverage put consensus revenue expectations at about $68.42 billion and reported that Microsoft exceeded that estimate, alongside stronger-than-expected Azure performance. Estimates vary by provider and are not part of Microsoft’s reported results, so the comparison is best treated as market context rather than an audited benchmark. The same earnings roundup reported that shares rose sharply in extended trading after the release. Coverage cited moves of roughly 7% to 9% at different points in the after-hours session; that was not the regular-session return. See the April 30, 2025 earnings coverage roundup.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsFor shareholders, the result paired strong profit growth with continued dividends and buybacks. For business customers, it signaled that Microsoft was expanding cloud and AI capacity, but the earnings figures alone do not establish what a particular company’s use of Azure, Microsoft 365, or an AI product will cost or return.
Historical context: this article covers Microsoft fiscal Q3 2025, announced April 30, 2025. Its figures should not be read as the company’s latest results.
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