Microsoft CEO Satya Nadella speaks at an event commemorating the 50th anniversary of the company at Microsoft headquarters in Redmond, Washington, on April 4, 2025.
David Ryder
Microsoft shares rose more than 6% in extended trading on Wednesday after the company reported better-than-expected quarterly results driven by its Azure cloud business.
Here’s how the company performed in comparison with LSEG consensus:
Earnings per share: $3.46 vs. $3.22 expectedRevenue: $70.07 billion vs. $68.42 billion expected
Microsoft’s revenue grew 13% year over year in the quarter, which ended on March 31, according to a statement. Net income climbed 18% to $25.8 billion from $21.9 billion, or $2.94 per share, a year earlier.
While earnings and revenue topped estimates, those results are backward looking. President Donald Trump’s sweeping tariffs were announced in early April, and investors will be focused on commentary on the upcoming earnings call for a sense of their likely impact on results this quarter and for the rest of the year.
CEO Satya Nadella said earlier this year that Microsoft plans spend $80 billion in fiscal 2025 on construction of data centers that can handle artificial intelligence workloads. That requires hefty imports from overseas, meaning costs could rise substantially depending on where tariffs land.
Microsoft continued to invest heavily in AI infrastructure during the quarter. Capital expenditures, excluding finance leases, reached $16.75 billion, up nearly 53%. Analysts surveyed by Visible Alpha had expected $16.37 billion.
The company’s Azure revenue grew 33%, with 16 points of the growth associated with AI. Analysts polled by StreetAccount and CNBC had anticipated 30.3% and 29.7% growth, respectively. Microsoft’s Intelligent Cloud unit that includes the Azure cloud produced $26.75 billion in revenue, up around 21% and more than StreetAccount’s consensus of $26.16 billion.
Revenue in the Productivity and Business Processes segment, which contains Office software subscriptions and LinkedIn, rose 10% to $29.94 billion, beating the $29.57 billion StreetAccount consensus.
In the More Personal Computing unit, containing Windows, search advertising, devices and video game consoles, revenue rose 6% to $13.37 billion, higher than StreetAccount’s $12.66 billion consensus.
Microsoft said sales of devices and of Windows operating licenses to device makers increased 3%. Technology industry researcher Gartner estimated that PC shipments went up 4.8% in the quarter.
During the quarter, which ended on March 31, Microsoft announced an adjustment to its relationship with key AI partner OpenAI. The company said it would have a right of first refusal when OpenAI wants new computing capacity, but won’t always have to deliver it. On the same day, OpenAI announced the Stargate AI infrastructure project alongside Oracle and SoftBank at the White House.
Microsoft said it had $623 million in “other expense” during the quarter. The sum includes recognized losses on equity method investments, including OpenAI. The figure was $2.29 billion in the prior quarter.
As of Wednesday’s close, Microsoft shares were down 7% for the year, while the S&P 500 index was down about 6%.
Executives will issue guidance and discuss the results on a call with analysts starting at 5:30 p.m. ET.
This is breaking news. Please check back for updates.
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