Microsoft Rides AI and Cloud Wave in April-June Quarter
Microsoft’s quarterly results beat expectations as AI and cloud services drove record revenue growth, pushing its market cap past $4 trillion
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Microsoft Corp.’s aggressive push into artificial intelligence and enterprise cloud services powered the tech firm’s better-than-expected results in its final quarter of fiscal 2025.
Revenue for the quarter rose 18% year-on-year (y-o-y) to $76.4 billion, while net income surged 24% to $27.2 billion.
Azure, Microsoft’s flagship cloud computing platform, was the standout performer. Annualized revenue from Azure alone crossed $75 billion, a 34% jump over the previous year, as enterprise demand for AI capabilities accelerated.
Microsoft Cloud, a broader category that includes Azure, Microsoft 365 cloud services, Dynamics 365, and other enterprise offerings, generated $46.7 billion in revenue in the June quarter, up 27% from the year-ago period.
Much of that growth came from organizations redesigning core operations around generative AI and large language models, increasingly hosted and deployed via Azure OpenAI Service.
“Cloud and AI is the driving force of business transformation across every industry and sector,” CEO Satya Nadella said in a statement. “We’re innovating across the tech stack to help customers adapt and grow in this new era.”
This “new era” is defined by agentic systems, copilots, and infrastructure-scale orchestration of AI workloads.
Behind the numbers is also a deeper structural shift: large enterprises are embedding generative AI into the core of their operations, and Microsoft is positioning itself as the systems layer for that transition.
More than 85% of Fortune 500 companies now use Microsoft’s AI tools, from copilots in Microsoft 365 and GitHub to agentic automation in Dynamics 365, according to the company’s internal figures and recent IDC-backed insights.
Customer stories range from Amgen’s use of Azure OpenAI Service to streamline drug discovery, to Telkomsel’s conversational AI platform that serves over 50 million users monthly.
To support this shift, Microsoft ramped up capital expenditures by 27% during the quarter to $24.2 billion, a large portion of which went to expanding GPU-rich data centers optimized for AI training and inference at scale.
That infrastructure investment has enabled enterprises to move from AI pilots to production-grade deployment in areas such as sales, logistics, customer service, and knowledge work.
Microsoft also remains in advanced negotiations to extend its exclusive access to OpenAI’s models—even if the startup reaches artificial general intelligence.
While OpenAI has begun courting rival cloud providers, Microsoft’s integration rights and early infrastructure backing still give it preferential access to GPT‑based tools and advances.
Meanwhile, sector-specific AI deals are accelerating.
The Premier League signed a five-year partnership to re-platform its digital infrastructure on Azure, integrating generative AI for fan engagement and match analytics.
In manufacturing, companies like ABB are deploying Microsoft Copilot to streamline predictive maintenance and shop floor productivity.
The Intelligent Cloud segment, which includes Azure along with Windows Server, GitHub, and other infrastructure-related services, posted $29.9 billion in quarterly revenue, a 26% increase. Within this, server and cloud services revenue rose 27%, driven by a 39% increase in Azure and related offerings.
Microsoft 365, which anchors the company’s productivity suite, continued to deliver double-digit growth. Commercial cloud revenue rose 18%, while consumer cloud services increased 20%.
Operating income for the quarter reached $34.3 billion, a 23% jump from the previous year. Diluted earnings per share rose to $3.65, up from $2.95.
On Thursday, 31 July, Microsoft’s market capitalization crossed the $4 trillion mark for the first time, helping it become only the second publicly traded company to reach the milestone after Nvidia.
For the full fiscal year ended 30 June, Microsoft reported a revenue of $281.7 billion, up 15% y-o-y, and $101.8 billion in net income, up 16% y-o-y.
The company returned $9.4 billion to shareholders in Q4 through dividends and share repurchases.
