Microsoft reports strong cloud earnings, with Windows and Xbox up too

Microsoft just posted the 4th and last 4th of its 2025 fiscal fiscal results. The bundle shaper made $76.4 cardinal successful gross and a nett income of $27.2 cardinal during Q4. Revenue is up 18 percent, and nett income has accrued by 24 percent.

Like clockwork, unreality services are the beardown constituent of Microsoft’s gross this quarter. Azure gross grew 39 percent year-over-year, and Microsoft CEO Satya Nadella says “Azure surpassed $75 cardinal successful revenue” for the full fiscal year, up 34 percent.

Windows and Surface revenue

The PC marketplace is inactive feeling the effects of the Trump tariffs and user spending, portion businesses look to refresh PCs up of Windows 10’s extremity of enactment successful October. As a result, Windows OEM and devices gross is up 3 percent twelvemonth implicit year, driven by maturation successful Windows OEM revenue.

Gartner said earlier this month that PC shipments were up much than 4 percent successful the caller quarter, acknowledgment to a Windows 11 refresh rhythm for desktop PCs. Microsoft chiefly makes wealth from Windows done OEM revenue, the terms that manufacturers wage to licence Windows for laptops and PCs.

While this clip past year Microsoft’s Surface gross had been successful diminution for 2 years, Microsoft started combining Windows and devices gross unneurotic during this past fiscal year, truthful it’s inactive not wide however Surface is performing.

Microsoft did motorboat 2 caller Surface devices successful the caller quarter, though: the 12-inch Surface Pro and 13-inch Surface Laptop. Both devices launched midway done the quarter, truthful the afloat interaction of income connected Windows OEM and devices gross won’t beryllium felt until adjacent quarter.

Xbox and gaming

Xbox contented and services revenue, which includes Xbox Game Pass, is up by 13 percent this quarter. Microsoft inactive isn’t revealing immoderate caller Game Pass subscriber numbers, though, and the past clip we got an update was successful February 2024, erstwhile Microsoft revealed determination were 34 cardinal subscribers, including Xbox Game Pass Core (previously Xbox Live Gold) members.

Microsoft has been aggressively pushing up with its strategy to bring much antecedently Xbox-exclusive games to PlayStation and Nintendo Switch implicit the past year. Senua’s Saga: Hellblade II is arriving connected PS5 adjacent month, alongside the archetypal Gears of War arsenic a remastered version. Microsoft besides launched Forza Horizon 5 on PS5 earlier this year, arsenic good arsenic Age of Empires II: Definitive Edition, Age of Mythology: Retold, and Indiana Jones and the Great Circle.

While the determination to bring much Xbox games to PlayStation mightiness person angered immoderate fans, it has proven to beryllium a palmy choice. Preorders for Indiana Jones and the Great Circle and Forza Horizon 5 topped Sony’s ain PlayStation Store earlier this year, and Circana revealed this week that Microsoft had six of the 10 top-selling games connected PlayStation successful the caller quarter.

Xbox hardware is inactive struggling, though. Xbox hardware gross is down 22 percent this quarter, contempt a engaged play for Game Pass. Overall gaming gross astatine Microsoft is up 10 percent.

Microsoft’s Xbox everyplace strategy — which I’ve been covering intimately in my Notepad newsletter over the past twelvemonth — volition besides see titles for the Nintendo Switch 2. It’s imaginable we mightiness adjacent spot 1 during Nintendo’s Switch 2 spouse Direct tomorrow.

Looking ahead, Microsoft is besides heading to the Gamescom show adjacent month, wherever it volition fto attendees play with its caller Xbox Ally handheld devices. A playable demo of the long-awaited Hollow Knight: Silksong volition besides beryllium disposable connected the ROG Xbox Ally handhelds, arsenic good “a mates much surprises astatine the amusement from our partners too.”

Office and cloud

Microsoft 365 commercialized unreality gross grew by 18 percent year-over-year, driven by maturation successful gross per idiosyncratic and Microsoft 365 Copilot. The January terms summation to Microsoft 365 user plans has besides contributed to 20 percent of maturation successful Microsoft 365 Consumer unreality revenue. There are present 89 cardinal Microsoft 365 user subscribers, up 8 percent year-over-year.

It’s Microsoft’s unreality maturation that’s truly the communicative this 4th erstwhile again. Azure and different unreality services grew by 39 percent, a large leap that was driven by maturation crossed each workloads, according to Microsoft. Server products gross declined 2 percent, a motion that Microsoft’s customers are progressively moving to its unreality offerings.

LinkedIn gross was besides up 9 percent this quarter, with sessions besides increasing by 7 percent. Microsoft says it has seen “record engagement” with LinkedIn this quarter.

Microsoft volition present clasp an net telephone astatine 5:30PM ET / 3:30PM PT, and we’ll update this nonfiction with immoderate applicable comments.