Microsoft reported strong earnings for the second quarter of fiscal year 2025, with revenue rising 12% year-over-year to $69.6 billion, driven by robust demand for its cloud services and AI offerings. Net income for the quarter reached $24.1 billion, a 10% increase compared to the same period last year, while operating income grew 17% to $31.7 billion.
Diluted earnings per share came in at $3.23, also up 10% from the prior year.
CEO Satya Nadella highlighted the continued expansion of Microsoft’s AI business, which has now crossed an annual revenue run rate of $13 billion—up 175% year-over-year. “We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead,” he said.
Cloud services remained a key growth driver, with Microsoft Cloud revenue reaching $40.9 billion for the quarter, marking a 21% year-over-year increase.
Segment Performance
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Productivity and Business Processes revenue rose 14% to $29.4 billion, led by a 15% rise in Microsoft 365 Commercial revenue and a 9% increase in LinkedIn revenue. Dynamics 365 posted 19% growth.
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Intelligent Cloud revenue increased 19% to $25.5 billion, with Azure and other cloud services up 31%.
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More Personal Computing remained largely flat at $14.7 billion. Within the segment, Windows OEM and Devices revenue was up 4%, and Xbox content and services saw a 2% increase. Search and news advertising revenue (excluding traffic acquisition costs) rose 21%.
CFO Amy Hood said the company continues to balance operational discipline with investment in cloud and AI infrastructure.
Microsoft returned $9.7 billion to shareholders through dividends and share repurchases during the quarter.