FY25 Q3 – Press Releases – Investor Relations

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

Segment Revenue Constant Currency Reconciliation

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           

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 to achieve more.

Forward-Looking
Statements

Statements in
this release that are “forward-looking statements” are based on current
expectations and assumptions that are subject to risks and uncertainties.
Actual results could differ materially because of factors such as:

·       
intense competition in all of our markets that may adversely
affect our results of operations;

·       
focus on cloud-based and AI services presenting execution and
competitive risks;

·       
significant investments in products and services that may not
achieve expected returns;

·       
acquisitions, joint ventures, and strategic alliances that may
have an adverse effect on our business;

·       
impairment of goodwill or amortizable intangible assets causing
a significant charge to earnings;

·       
cyberattacks and security vulnerabilities that could lead to
reduced revenue, increased costs, liability claims, or harm to our reputation
or competitive position;

·       
disclosure and misuse of personal data that could cause
liability and harm to our reputation;

·       
the possibility that we may not be able to protect information
stored in our products and services from use by others;

·       
abuse of our advertising, professional, marketplace, or gaming
platforms that may harm our reputation or user engagement;

·       
products and services, how they are used by customers, and how
third-party products and services interact with them, presenting security,
privacy, and execution risks;

·       
issues about the use of AI in our offerings that may result in
reputational or competitive harm, or legal liability;

·       
excessive outages, data losses, and disruptions of our online
services if we fail to maintain an adequate operations infrastructure;

·       
supply or quality problems;

·       
government enforcement under competition laws and new market
regulation may limit how we design and market our products;

·       
potential consequences of trade and anti-corruption laws;

·       
potential consequences of existing and increasing legal and
regulatory requirements;

·       
laws and regulations relating to the handling of personal data
that may impede the adoption of our services or result in increased costs,
legal claims, fines, or reputational damage;

·       
claims against us that may result in adverse outcomes in legal
disputes;

·       
uncertainties relating to our business with government
customers;

·       
additional tax liabilities;

·       
sustainability regulations and expectations that may expose us
to increased costs and legal and reputational risk;

·       
an inability to protect and utilize our intellectual property
may harm our business and operating results;

·       
claims that Microsoft has infringed the intellectual property
rights of others;

·       
damage to our reputation or our brands that may harm our
business and results of operations;

·       
adverse economic or market conditions that may harm our
business;

·       
catastrophic events or geo-political conditions, such as the
COVID-19 pandemic, that may disrupt our business;

·       
exposure to increased economic and operational uncertainties
from operating a global business, including the effects of foreign currency
exchange; and

·       
the dependence of our business on our ability to attract and
retain talented employees.

For more
information about risks and uncertainties associated with Microsoft’s business,
please refer to the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s
SEC filings, including, but not limited to, its annual report on Form 10-K and
quarterly reports on Form 10-Q, copies of which may be obtained by contacting
Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s
Investor Relations website at http://www.microsoft.com/en-us/investor.

All
information in this release is as of March 31, 2025. The company undertakes no
duty to update any forward-looking statement to conform the statement to actual
results or changes in the company’s expectations.

For more
information, press only:

Microsoft
Media Relations, WE Communications for Microsoft, (425) 638-7777, rrt@we-worldwide.com

For more
information, financial analysts and investors only:

Jonathan
Neilson, Vice President, Investor Relations, (425) 706-4400

Note to
editors: For more information, news and perspectives from Microsoft, please
visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers, and titles were correct at time
of publication, but may since have changed. Shareholder and financial
information, as well as today’s 2:30 p.m. Pacific time conference call with
investors and analysts, is available at http://www.microsoft.com/en-us/investor.