Microsoft simply posted the third quarter of its 2025 fiscal monetary outcomes. The software program maker made $70.1 billion in income and a web earnings of $25.8 billion throughout Q3. Income is up 13 %, and web earnings has elevated by 18 %. Microsoft was anticipated to report $68.42 billion in income, so the outcomes have crushed Wall Road expectations.
Cloud progress seems to be the primary driver of improved revenues, with general Microsoft Cloud income reaching $42.4 billion, up 20 %. Microsoft hasn’t cut up out its AI revenues, so it’s nonetheless unclear precisely how a lot that a part of its enterprise is rising, although.
With all eyes on the impression of the Trump tariffs and shopper spending, Microsoft additionally reported Home windows OEM and units income progress of three % year-over-year. Companies and shoppers are upgrading PCs and laptops forward of the Home windows 10 finish of life in October, however there hasn’t been an enormous upswing in Home windows OEM income but. Microsoft does say that Home windows OEM progress was partly right down to “stock ranges remaining elevated as a consequence of tariff uncertainty.”
Microsoft now combines Floor income with Home windows OEM income, so it’s now not clear precisely how its Floor line is doing. Microsoft hasn’t launched any new shopper Floor units within the current quarter, however the firm did begin promoting Intel-powered variations of the Floor Professional 11 and Floor Laptop computer 7 in February for companies. Microsoft can also be rumored to be launching smaller variations of the Floor Professional and Floor Laptop computer quickly.
On the gaming aspect, Microsoft warned final quarter that Xbox {hardware} income would decline and it has once more. Xbox {hardware} is down 6 % this quarter, in a interval when Microsoft has been launching quite a lot of video games into Recreation Cross. General gaming income at Microsoft is up 5 %.
Xbox content material and providers, which incorporates Recreation Cross, is up 8 %, although. Microsoft isn’t revealing any new Recreation Cross subscriber numbers although, and the final time we received an replace was in February 2024 when Microsoft revealed there have been 34 million subscribers, together with the Xbox Recreation Cross Core (beforehand Xbox Dwell Gold) members.
Over the previous yr Microsoft has been pushing forward with its technique to deliver extra beforehand Xbox-exclusive video games to PlayStation and Nintendo Change. The transfer has confirmed to be a profitable one, with preorders for Indiana Jones and the Nice Circle and Forza Horizon 5 topping Sony’s personal PlayStation Retailer final month.
Microsoft’s Xbox in every single place technique — which I’ve been protecting carefully in my Notepad publication over the previous yr — may also embrace titles for the Nintendo Change 2. Microsoft is getting ready the same listing of video games to port over to the Change 2 this yr.
As is at all times the case for Microsoft’s earnings, the corporate’s Workplace and cloud companies are as soon as once more the celebs of the present. Microsoft 365 industrial merchandise and cloud providers income elevated 11 % yr over yr, and even workplace shopper is up 10 % in income. Microsoft 365 shopper subscribers are as much as 87.7 million now.
Microsoft bundled its Workplace AI options into Microsoft 365 Private and Household subscriptions earlier this yr and raised costs. Beforehand, Microsoft 365 subscribers needed to pay an additional $20 per 30 days to get Copilot inside Workplace apps like Phrase, Excel, and PowerPoint as a part of a Copilot Professional subscription, however Microsoft now gives these AI options inside Microsoft 365 apps for an additional $3 per 30 days.
Current subscribers have been capable of decide out of the AI options and never undergo the worth enhance, nevertheless it’s not clear what number of have truly determined to do this. Microsoft does word that it has seen “progress in income per consumer” from the January worth enhance, which has been partially offset by a “continued combine shift” to the $1.99 month-to-month Microsoft 365 Fundamental subscription.
Microsoft’s revenues in what it calls clever cloud have elevated by 21 % year-over-year to $26.8 billion, which is strictly double the income generated by Home windows, Xbox, and search and information promoting (extra private computing). Server merchandise and cloud providers income elevated 22 %, with Azure progress of 33 %.
Microsoft will now maintain an earnings name at 5:30PM ET and we’ll replace this text with any related feedback from Microsoft CEO Satya Nadella and CFO Amy Hood.
