Microsoft (MSFT) Q1 2025 earnings report

Microsoft reported an earnings and revenue beat for the fiscal first quarter as the company’s Azure cloud infrastructure business grew faster than forecast.

Here’s how the company fared compared to the LSEG consensus:

• Earnings per stock: $3.30 vs. $3.10 expected
• Income: $65.59 billion vs. $64.51 billion expected

Microsoft’s revenue grew 16% year over year in the quarter ended Sept. 30, according to a declaration. Net income of $24.67 billion was up from $22.29 billion in the year-ago quarter.

In August, Microsoft said it would revise the reporting of business segments to reflect its management approach. Mobility and security services, along with some Windows revenue, are now part of the productivity and business process unit, which includes Office software.

Revenue from productivity and business processes reached $28.32 billion in the quarter. The number is up 12% and higher than the $27.90 billion consensus among analysts surveyed by StreetAccount. That’s 38% higher than the $20.45 billion midpoint of the forecast management gave in July because the actual total accounts for the changes.

Investors got a clearer picture of cloud computing spending at Microsoft because, for the first time, Azure and other cloud services revenue growth metrics exclude mobility and security and sales of Power BI data analytics. Azure growth for the quarter came in at 33%. CNBC’s consensus for Azure growth was 32.8%, while StreetAccounts was 29.4%.

The entire Intelligent Cloud segment including Azure, Windows Server and enterprise services generated $24.09 billion in revenue. That’s up 20% and slightly more than the StreetAccount consensus of $24.04.

IN Alphabet’s earnings report Tuesday, the Internet company said its cloud business, which competes with Azure, grew nearly 35% from a year earlier to $11.35 billion, topping estimates. Amazonwhich is a leader in the cloud infrastructure market, is scheduled to report results after the close on Thursday.

Microsoft has shrunk the size of its More Personal Computing segment through the reporting changes. In the first quarter of the fiscal year, it contributed $13.18 billion in revenue. That’s up about 17% and above the $12.56 billion StreetAccount consensus.

The company saw 2% growth in device sales and sales of Windows operating system licenses to device manufacturers. Industry researcher Gartner estimated that quarterly PC shipments fell 1.3%.

During the quarter, Microsoft worked to help customers recover from a flawed update to CrowdStrike security software brought down Windows PCs globally. Microsoft said it would partner with BlackRock on an artificial intelligence infrastructure investment fund with a target of $30 billion in seed capital.

Microsoft’s AI investments remain a big focus for investors as the company builds out its infrastructure and increases chip spending to handle larger workloads. Microsoft is the lead investor in ChatGPT creator OpenAI, which was valued at $157 billion in a funding round earlier this month.

As of Sept. 30, Microsoft had collected more than $108 billion in finance leases that had not started, which UBS analysts have said may include third-party cloud spending to meet AI demand.

At the same time, Microsoft has spent more money on property and equipment. In the fiscal first quarter, it grew 50% year over year to $14.92 billion. The consensus among analysts polled by Capital IQ was $14.58 billion.

As of Tuesday’s close, Microsoft was up about 15% for the year, while the Nasdaq was up about 25% over the same period.

Executives will discuss the results and issue guidance on a conference call with analysts starting at 5:30 p.m. ET.

Correction: An earlier version of this story had an incorrect date for the end of the quarter. It was September 30th.