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Microsoft Q4 earnings surge on cloud results; AI gains steam
Booming cloud business drove fourth-quarter and full-year results past analyst expectations as the AI race continues to heat up.
Microsoft on Wednesday dazzled with fourth-quarter earnings showing big gains in cloud business lines and across the board, driven by skyrocketing enterprise artificial intelligence demand.
Intelligent Cloud business raked in $29.9 billion in revenue on the quarter -- a 26% increase -- while the company's Azure cloud platform surpassed $75 billion for the fiscal year, rising 34% compared with last year. This was the first time Microsoft disclosed Azure standalone annual revenue. For comparison, cloud competitor Google last week posted an annual revenue run rate of $50 billion.
Microsoft posted revenue of $76.4 billion in the fourth quarter, up 18% and beating Wall Street estimates. Fourth-quarter profits were $27.2 billion, a 24% increase.
Microsoft 365 commercial products and cloud services revenue jumped 16%, driven by cloud revenue growth of 18%, the company said. Server products and cloud services revenue increased 27%, driven by Azure and other cloud services revenue growth of 39%. Overall revenue for fiscal 2025 increased 15%, to $281.7 billion.
"Thirty-four percent growth is a stellar result for Azure and shows acceleration from previous quarters," said Steven Dickens, CEO and principal analyst at HyperFrame Research, in an email interview. "The AI story from Azure is resonating with clients, and we are now starting to see this translate into the quarterly earnings. To beat analysts' expectations on numbers this large is impressive and bodes well for Microsoft's trajectory going forward."
Shane Snider, a veteran journalist with more than 20 years of experience, covers IT infrastructure at Informa TechTarget.
