Microsoft Q3 2025: Cloud and AI Power 20% Surge in Microsoft Cloud Revenue to $42.4B
Microsoft reported third-quarter 2025 results that underscored the company’s accelerating momentum in cloud and artificial intelligence. Revenue rose 13% year-over-year to $70.1 billion, driven by a 20% jump in Microsoft Cloud revenue to $42.4 billion. Operating income climbed 16% to $32.0 billion, while net income rose 18% to $25.8 billion. Diluted EPS reached $3.46, up 18% from the prior year. CEO Satya Nadella credited Microsoft’s “full-stack innovation” in AI and cloud infrastructure for its continued success across enterprise and consumer segments.
Azure and other cloud services posted 33% revenue growth, fueling a 21% increase in total Intelligent Cloud revenue to $26.8 billion. Microsoft 365, Dynamics 365, and LinkedIn all contributed to strong growth within Productivity and Business Processes, which grew 10% to $29.9 billion. Microsoft also highlighted rising demand for AI-infused solutions across productivity, security, and business applications. CFO Amy Hood noted that Microsoft is benefiting from “continued demand for differentiated offerings” across its cloud and AI platforms.
On the consumer side, More Personal Computing delivered $13.4 billion in revenue, with Xbox content and services up 8%, and search and news advertising rising 21% (excluding TAC). Microsoft returned $9.7 billion to shareholders through dividends and share repurchases during the quarter. With Azure’s AI capabilities driving enterprise demand and its productivity suite gaining traction in both business and consumer markets, Microsoft remains well-positioned to capture the next phase of digital and AI transformation.
- Total Q3 2025 revenue: $70.1B (+13% YoY)
- Microsoft Cloud revenue: $42.4B (+20% YoY)
- Azure and other cloud services revenue: +33% YoY
- Intelligent Cloud segment revenue: $26.8B (+21% YoY)
- Productivity and Business Processes revenue: $29.9B (+10% YoY)
- Microsoft 365 Commercial cloud: +12%
- Dynamics 365: +16%
- LinkedIn: +7%
- More Personal Computing revenue: $13.4B (+6%)
- Xbox services: +8%
- Search and news advertising (ex-TAC): +21%
- Net income: $25.8B (+18%)
- EPS (diluted): $3.46 (+18%)
- Capital returns: $9.7B (dividends + buybacks)
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” said Satya Nadella, Chairman and CEO of Microsoft.
