Microsoft’s earnings for the third quarter of fiscal year 2025 showed strong growth, mainly from its cloud and artificial intelligence (AI) services. The company made $70.1 billion in revenue, a 13% increase compared to last year.
Its net income grew to $25.8 billion, an 18% increase. These results were better than what Wall Street expected, with earnings per share reaching $3.46, higher than the predicted $3.22.
The cloud segment was the best performer, with Microsoft Cloud revenue reaching $42.4 billion, a 20% rise from the previous year. The Intelligent Cloud division, which includes Azure, saw revenue grow by 21% to $26.8 billion.
Azure experienced a notable revenue increase of 35%, fueled by strong demand for AI services. AI contributed significantly to Azure’s growth, accounting for 16 percentage points of this increase, exceeding analyst predictions.
Microsoft’s success in cloud and AI comes from strategic investments in these areas. The company has been boosting its AI infrastructure, leading to more capacity and quicker deployment of AI solutions. This is seen in the usage of tools like Microsoft 365 Copilot, which has tripled over the last year.
Looking ahead, the company expects revenues between $73.15 billion and $74.25 billion for the next quarter, surpassing average estimates. Microsoft predicts continued strong growth in Azure, with forecasts of a 34% to 35% increase when considering constant currency.
Despite these positive results, Microsoft faces challenges such as higher capital expenditures and the impact of tariffs. Nonetheless, the company’s strong performance in cloud and AI has set it up well for future growth, solidifying its position as a leader in the tech sector.