Microsoft’s cloud and AI companies are doing fairly effectively — and their affect is being felt throughout the corporate. In its Q2 2025 earnings, Microsoft introduced income of $69.6 billion for the quarter, up 12 % year-over-year, and internet revenue of $24.1 billion, which is up 10 % year-over-year.
As for the AI enterprise, CEO Satya Nadella says in a press release that it has “surpassed an annual income run fee of $13 billion, up 175 % year-over-year.” The corporate’s Azure and different cloud companies enterprise grew 31 % year-over-year, a slight lower from 33 % YoY progress the earlier quarter.
The corporate’s gaming revenues didn’t fare so effectively. Gaming income declined 7 %, and Xbox {hardware} income declined 29 %. Microsoft has been transferring away from a spotlight by itself {hardware} with messaging like its “That is an Xbox” advert marketing campaign and bringing Xbox Sport Studios video games to different platforms, and people adjustments may very well be contributing to the decline.
Which means the main focus is as an alternative on video games and companies, and that’s the place the enterprise is seeing some enhancements. Xbox content material and companies income have been up 2 %, “pushed by progress in Xbox Sport Go,” Microsoft says. (Final quarter, Microsoft’s software program gaming revenues have been method up whilst Xbox {hardware} income declined.)
Throughout Wednesday’s earnings name, Nadella mentioned that Sport Go “set a brand new quarterly income document” and famous that Xbox Cloud Gaming noticed a “document 140 million hours streamed” in the course of the quarter. Nadella additionally revealed that Indiana Jones and the Nice Circle has “already been performed by greater than 4 million individuals.”
In its press launch, Microsoft mentioned that it noticed Home windows OEM and Gadgets income progress of 4 % year-over-year, a slight bump from 2 % in Q1.
On the earnings name, Microsoft CFO Amy Hood mentioned that Home windows OEM and units ought to decline low to mid single digits in Q3 2025. Total gaming income is predicted to develop in single digits, with Xbox content material and companies anticipated to develop low to mid single digits. Xbox {hardware} income “will decline yr over yr.”
Through the name, Nadella additionally reiterated that the corporate stays “very pleased with the partnership with OpenAI” (the 2 firms introduced final week that they’re adjusting their partnership) and acknowledged that DeepSeek had some “actual improvements.”
Replace, January twenty ninth: Added particulars from Microsoft’s earnings name.
