In This Article:
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Revenue: $70.1 billion, up 13% (15% in constant currency).
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Gross Margin: Increased 11% (13% in constant currency); percentage was 69%, down 1 point year-over-year.
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Operating Income: Increased 16% (19% in constant currency).
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Earnings Per Share (EPS): $3.46, an increase of 18% (19% in constant currency).
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Microsoft Cloud Revenue: $42.4 billion, grew 20% (22% in constant currency).
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Commercial Bookings: Increased 18% (17% in constant currency).
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Commercial Remaining Performance Obligation: $315 billion, up 34% (33% in constant currency).
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Productivity and Business Processes Revenue: $29.9 billion, grew 10% (13% in constant currency).
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Intelligent Cloud Revenue: $26.8 billion, grew 21% (22% in constant currency).
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Azure and Other Cloud Services Revenue: Grew 33% (35% in constant currency).
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More Personal Computing Revenue: $13.4 billion, grew 6% (7% in constant currency).
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Capital Expenditures: $21.4 billion.
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Cash Flow from Operations: $37 billion, up 16%.
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Free Cash Flow: $20.3 billion.
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Return to Shareholders: $9.7 billion through dividends and share repurchases, up 15% year-over-year.
Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Microsoft Cloud revenue surpassed $42 billion, up 22% in constant currency, showcasing strong demand for cloud and AI offerings.
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Azure and other cloud services revenue grew 33% and 35% in constant currency, driven by strong demand for AI services.
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Microsoft 365 Copilot usage tripled year-over-year, indicating strong adoption of AI-driven productivity tools.
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LinkedIn revenue increased 7% and 8% in constant currency, with significant growth in LinkedIn Premium subscriptions.
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Gaming revenue increased 5% and 6% in constant currency, with Xbox content and services revenue growing 8% and 9% in constant currency.
Negative Points
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On-premises server business revenue decreased 6% and 4% in constant currency, reflecting a continued shift to cloud offerings.
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Microsoft Cloud gross margin percentage decreased by 3 points year-over-year due to the impact of scaling AI infrastructure.
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Operating expenses increased 6% and 7% in constant currency, driven by investments in AI infrastructure.
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There are AI capacity constraints expected beyond June, indicating potential challenges in meeting growing demand.
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The Talent Solutions business within LinkedIn continues to be impacted by weakness in the hiring market.
Q & A Highlights
Q: Can you discuss Microsoft's data center strategy and any shifts taking place, especially in light of strong AI demand? A: Satya Nadella, CEO, explained that Microsoft continuously adjusts its data center strategy to align with future workload growth, considering demand, workload shape, and location. Amy Hood, CFO, added that these are long lead-time decisions, and the company is working to balance supply and demand, with some increased demand leading to tightness as they exit the year.