Microsoft reports strong Q3 FY2025 results, revenue reaches $70.1 billion

Microsoft just wrapped up its third quarter of fiscal 2025 with another solid flex, beating expectations yet again. Revenue hit $70.1 billion, up 13% from last year (or 15% if you factor out currency swings), while earnings per share climbed 18% to $3.46.

Azure and the broader cloud services arm clocked in with the same 33% growth rate as Q1 (35% when adjusted for currency), pulling ahead of Q2’s 31% and reinforcing a steady upward trend. CEO Satya Nadella pointed to AI as the game-changer here. Businesses are leaning harder on Microsoft’s AI stack to work smarter and trim costs, and it’s showing in the numbers.

The Productivity and Business Processes unit, home to Microsoft 365 and Dynamics 365, pulled in $29.9 billion, a 10% lift from last year (13% with currency adjustments). Microsoft 365 Commercial posted an 11% increase, while Dynamics 365 outpaced it with 16%. LinkedIn is still growing, but at a slower 7%.

As for the More Personal Computing division, it brought in $13.4 billion, up 6%. Windows OEM crept up 3%, Xbox content and services added 8%, and search and news ads were the surprise standout, jumping 21% once you strip out traffic costs. These gains helped keep the segment in the green, with Windows and Xbox pulling more than their weight.

Financially, Microsoft converted its top-line strength into $37 billion of operating cash flow, even as it invested $16.7 billion in property and equipment to expand its datacenter footprint for AI. CFO Amy Hood highlighted that Microsoft Cloud alone generated $42.4 billion this quarter, up 20% (22% in constant currency), fueling both research and development and shareholder returns. The company returned $9.7 billion to shareholders through dividends and share buybacks.

Looking forward, while this quarter's results look solid, Redmond made sure to mention that the road ahead has its potential bumps. It pointed out that actual results could differ materially from expectations because of things like "intense competition in all of our markets," the simple fact that "significant investments in products and services may not achieve expected returns," and the ever-present threat of "cyberattacks and security vulnerabilities."

The company also noted that changes in "government enforcement under competition laws" or "laws and regulations relating to the handling of personal data" could impact its business.

More details on Microsoft's third-quarter FY2025 results are available on the company's official website.

Source

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