Microsoft Revenues Up 13 Percent to $70.1 Billion

Microsoft reported that it earned a net income of $25.8 billion on revenues of $70.1 billion in the quarter ending March 31, 2025. Those figures represent gains of 18 percent and 13 percent, respectively year-over-year (YOY).

“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” Microsoft chairman and CEO Satya Nadella said. “From AI infra[structure] and platforms to apps, we are innovating across the stack to deliver for our customers.”

Productivity and Business Processes–which owns Microsoft 365, LinkedIn, and Dynamics–was again Microsoft’s biggest business, with $29.9 billion in revenues, up 10 percent YOY. Microsoft 365 commercial products and clouds services revenues were up 11 percent in the quarter, while Microsoft 365 Commercial cloud revenue grew 12 percent and Microsoft 365 consumer products revenue grew 5 percent.

Intelligent Cloud–Azure, server, and enterprise and partner services–wasn’t far behind with $26.8 billion in revenues, and its revenue growth of 21 percent was much higher than Microsoft’s other businesses. Azure and cloud services revenue grew 33 percent in the quarter, while Server products and cloud services revenue grew 22 percent. Microsoft 365 commercial seats were up 7 percent while the Microsoft 365 consumer subscriber base grew 9 percent to 87.7 million.

More Personal Computing is where Microsoft lumps Windows revenues from PC makers and consumers, Surface, Xbox and gaming, and search and new advertising. This has been the company’s smallest business unit for years, at it added $13.4 billion in revenues with 6 percent growth YOY.

Windows revenues from PC makers and Surface grew 3 percent in the quarter, Microsoft said, driven by growth from PC makers. Gaming revenue was up 5 percent overall, and Xbox content and services revenue grew 8 percent, but Xbox console revenue were down 6 percent. Search and news ad revenue was up 21 percent.

But the big news here is that Microsoft has finally slowed its spending on AI: After 10 consecutive quarters in which it has spent more each time on AI infrastructure costs, Microsoft spent less money this quarter: $21.4 billion, a decline of $1 billion quarter-over-quarter. That’s only a small step back, and Microsoft said it was still on track to spend $80 billion on AI infrastructure this fiscal year, which ends June 30. But it’s still notable.

Microsoft also semi-acknowledged some recent rumors, confirming that it has slowed down or paused some AI infrastructure build-outs. The firm said it was shifting its spending from long-term investments like AI datacenters to shorter-lived assets like chips that can recognize new revenues immediately. It also divulged that it lost $623 million from OpenAI, partially offset by net gains on derivatives and investments. But it will continue investing in AI and expects to spend more, sequentially, on AI build out in the current quarter than it did in this quarter.

Microsoft returned $9.7 billion to shareholders in the quarter in the form of $6.2 billion in dividends and $3.5 billion in share repurchases.