Microsoft (NASDAQ: MSFT) released its Q1 FY25 financial results after market close today, reporting revenues of US$56.5bn and an earnings per share (EPS) of US$2.99. These figures surpassed consensus projections, which estimated revenue at US$54.5bn and EPS at US$2.65.
A key driver was Microsoft’s Intelligent Cloud division, which includes Azure and saw a revenue increase of 19% to US$24.3bn. Microsoft’s Azure cloud business, a direct competitor to Amazon Web Services and Google Cloud, grew by 29%, signaling steady demand for cloud and AI-enhanced solutions. Additionally, its Productivity and Business Processes segment, which encompasses Office 365 and LinkedIn, rose by 13%, driven by rising subscriptions and LinkedIn's continued popularity among business users.
The report highlighted how AI integration is reshaping Microsoft’s product offerings, boosting capabilities across the Office suite and enhancing customer value. CEO Satya Nadella emphasised the company’s dedication to “responsible AI” as a means to further innovation while addressing growing concerns over ethical AI use. Microsoft also disclosed ongoing investments in AI research and its partnership with OpenAI to develop advanced generative AI models.
However, Microsoft’s More Personal Computing division saw a slight decline, with revenue down 3% year-over-year to US$13.7bn, reflecting continued weakness in the global PC market. Still, the division’s performance surpassed expectations, partly due to modest growth in Windows commercial products and increased demand for Xbox content.
Forward-looking statements from Microsoft included an expected increase in demand for AI-driven cloud solutions, and the company projected revenue growth in the coming quarters as businesses adopt these technologies at scale.
