Microsoft Corporation concluded Fiscal Year 2025 with impressive financial results, reporting $281.7 billion in revenue, an increase of 15% year-over-year. Operating income also saw robust growth, rising 17% year-over-year to $128.5 billion, demonstrating effective execution of its AI-first strategy across all segments. The company-wide gross margin percentage stood at 69%, with operating expenses increasing a modest 6%.
The Intelligent Cloud segment, a key driver of Microsoft's AI ambitions, generated $106.27 billion in revenue, up 21% year-over-year, with Azure and other cloud services growing a strong 34% for the full fiscal year. In the most recent quarter (Q4 FY25), Azure's growth accelerated to 39%, exceeding expectations due to strong demand from core infrastructure businesses. The Productivity and Business Processes segment contributed $120.81 billion in revenue, growing 13%, bolstered by Microsoft 365 Commercial cloud revenue increasing 15% and LinkedIn revenue up 9%.
The More Personal Computing segment recorded $54.65 billion in revenue, up 7% year-over-year, benefiting from the Activision Blizzard acquisition which boosted Gaming revenue by 9%. Looking ahead, Microsoft guided for Q1 FY26 capital expenditures to be 'over $30 billion,' driven by continued strong demand for cloud and AI. Despite these substantial investments, the company expects its FY26 operating margins to remain 'relatively unchanged year-over-year,' reflecting disciplined execution and confidence in long-term growth.
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