Microsoft Exceeds Expectations, Azure Annual Revenue Surpasses $750 Billion, Net Profit Rises to $272.3 Billion! S&P 500 Index Rises Over 7% in After-Hours Trading
Microsoft announced its quarterly earnings and revenue exceeded expectations, resulting in a 7% increase in stock price after-hours trading.
The following is a comparison between the company's performance and the consensus forecast from London Stock Exchange Group (LSEG): Earnings per share: $3.65, expected $3.37; Revenue: $764.4 billion, expected $738.1 billion.
A statement shows that in the fourth quarter ended June 30, Microsoft's revenue grew 18% year-over-year to $647 billion, the fastest growth in three years. Net profit increased from $220.4 billion last year to $272.3 billion this year.
The company's intelligent cloud department, which covers Azure cloud business, reported revenue of $298.8 billion, up about 26% year-over-year, exceeding the StreetAccount consensus forecast of $289.2 billion.
Microsoft disclosed for the first time in US dollars the scale of its Azure business. In fiscal year 2025, Azure and other cloud services revenue exceeded $750 billion, up 34% from last year.
Azure revenue growth was 39% in the fourth quarter. Analysts had previously forecast Azure growth of 34.4% and 35.3%.
The productivity and business process department, which includes Office office software and LinkedIn, reported revenue of $331.1 billion, exceeding the StreetAccount consensus forecast of $321.2 billion.
Microsoft's bet on artificial intelligence (including its stake in OpenAI and a valuation of tens of billions of dollars in NVIDIA chips) is driving growth in commercial software sales. The company said that the adoption of Microsoft 365 Copilot has increased revenue per user for Office office software suite and other Microsoft 365 commercial cloud products.
The more personal computing department, which includes Windows, search ads, devices, and video games, reported total revenue of $134.5 billion, up 9% year-over-year, exceeding the StreetAccount forecast of $126.8 billion.
Microsoft said that device sales and licensing fees to device manufacturers grew 3%. Gartner, a leading research company in the technology industry, estimates that the season's personal computer shipments increased by 4.4%.
Meta announced on Wednesday that its full-year capital expenditure would be between $660 billion and $720 billion, increasing the previous forecast of $640 billion.
This quarter, Microsoft celebrates its 50th anniversary, cutting over 6,000 jobs, and releasing a GitHub feature to assign coding tasks to Copilot assistants. The company also announced that LinkedIn CEO Ryan Roslansky will take on more responsibilities, managing Office office applications.
Microsoft said that other expenses this quarter were $17.1 billion, including losses recognized from investments in OpenAI and other equity method investments. Last quarter's other expenses totaled $6.23 billion.
As of Wednesday's close, Microsoft's stock price has risen 22% year-to-date, nearing its historic high, while the S&P 500 index has risen about 8%. Microsoft's stock price surged to over $550 per share in after-hours trading, making its market value around $41 trillion, the second-largest company after NVIDIA.
Executives will begin a conference call with analysts at 5:30 pm ET to discuss the performance.