Microsoft Reports Strong Q2 2025 Results with AI Revenue Growth of 175%

January 30, 2025 at 6:07:58 AM

TL;DR Microsoft reported strong financial results for fiscal Q2 2025, with total revenue of $69.6 billion, a 12% increase year-over-year. Operating income rose 17% to $31.7 billion, and net income grew 10% to $24.1 billion. The AI business saw a 175% increase in revenue, surpassing $13 billion, while cloud revenue grew 21% to $40.9 billion. LinkedIn exceeded $2 billion in Premium subscription revenue, and Microsoft returned $9.7 billion to shareholders.

Microsoft Reports Strong Q2 2025 Results with AI Revenue Growth of 175%

Microsoft announced robust financial results for its fiscal Q2 2025, highlighting substantial growth in its cloud and AI businesses. The tech giant exceeded market expectations across multiple segments.

Financial Performance

The company reported total revenue of $69.6 billion, representing a 12% increase year-over-year. Operating income rose by 17% to $31.7 billion, while net income grew 10% to $24.1 billion. Diluted earnings per share also increased 10% to $3.23.

AI and Cloud Growth

Microsoft's AI business achieved remarkable growth, with annual revenue run rate surpassing $13 billion, marking a substantial 175% increase year-over-year. Microsoft Cloud revenue demonstrated strong performance, growing 21% to reach $40.9 billion. Azure, the company's cloud platform, maintained robust growth with a 31% year-over-year increase.

Segment Performance

The company reported varied performance across its main segments:

  • Productivity and Business Processes revenue increased 14% to $29.4 billion
  • Intelligent Cloud revenue grew 19% to $25.5 billion
  • More Personal Computing revenue remained stable at $14.7 billion

LinkedIn Milestone

LinkedIn achieved a significant milestone, surpassing $2 billion in Premium subscription revenue over the past 12 months. The professional networking platform reported overall revenue growth of 9% year-over-year and now serves more than 1 billion users across its platform.

Shareholder Returns

Microsoft maintained its commitment to shareholder value, returning $9.7 billion to shareholders through dividends and share repurchases during the quarter. The company's gross margin improved to 69%, while operating margin increased to 45%, representing improvements of 1 and 2 percentage points respectively year-over-year.

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