The $88 billion Microsoft invested in building data centers for artificial intelligence and cloud computing over the past year seems to be paying off with the company reporting profit of $101 billion for fiscal year 2025, which ended June 30. Quarterly revenue for the April through June period was $76.4 billion, up 18 percent year-over-year, with profit of $27.2 billion, a 24 percent increase. “Cloud and AI is the driving force of business transformation across every industry and sector,” said Microsoft Chairman and CEO Satya Nadella, noting Azure passed $75 billion in revenue for the year, up 34 percent.

The New York Times points out this period marks the first time Microsoft has broken out Azure earnings, reporting that “two years ago, Azure and other cloud services were growing 26 percent in the same quarter. Now, even though Azure has become a much larger business, it grew 39 percent.”

“We’re innovating across the tech stack to help customers adapt and grow” in cloud computing and AI, Nadella stated in the company’s earnings release. CFO Amy Hood highlighted the performance of Microsoft Cloud, which had revenue of $46.7 billion for the quarter, up 27 percent compared to the same period in 2024.

Core offerings such as Microsoft 365 Consumer products and cloud services grew revenue by 21 percent, while Microsoft 365 Commercial products and cloud services were up 16 percent. Ancillaries also improved, with Xbox content and services revenue at +13 percent, while LinkedIn revenue saw 9 percent growth.

Microsoft plans $30 billion in capital expenses in the current quarter. The spending is tied to existing contracts, Hood said, noting “We are still seeing demand improve.”

“Microsoft’s higher-than-expected capital expenditure forecast — its largest ever for a single quarter — put it on track to potentially outspend its rivals over the next year,” reports Reuters, listing Meta and Google and noting that “Microsoft and Meta’s results helped fuel a $500-billion gain in AI stocks.” Microsoft shares rose 9 percent in after hours trading.

Despite the good news, Nadella struck a somber note in a blog post related to the Microsoft layoffs tallied by The Times of India at 9,000 newly announced cuts, for a total of 15,000 this year. Nadella said the job reductions have been “weighing heavily on me,” while acknowledging the “incongruence” of staff reductions at a time when “by every objective measure, Microsoft is thriving.” But, he added, “progress isn’t linear.”

Related:
Microsoft Just Became the World’s Second $4 Trillion Company, The Walt Street Journal, 7/31/25
Microsoft Is an AI Darling, but Its Core Businesses Are Booming Too, The Walt Street Journal, 8/3/25