MSFT — Q2 2025 Earnings Call

Technology

Microsoft Corporation • Reported: 2025-01-29

EPS Actual

$3.23

Est. $3.11 ▲ Beat

Revenue Actual

$69.6B

Est. $68.8B ▲ Beat

Overall Result

Double Beat

EPS + Revenue vs. estimates

Period

Q2 2025

FY2025 • Reported 2025-01-29

Executive Summary

Microsoft delivered strong Q2 FY2025 results with revenue of $69.6 billion, up 12% year-over-year, exceeding expectations. Azure and cloud services grew 31%, with AI services contributing 13 percentage points to Azure growth. The Intelligent Cloud segment generated $25.5 billion in revenue, while Productivity and Business Processes reached $29.4 billion.

Key Highlights

Cloud positive

Azure growth accelerates

Azure and cloud services grew 31% (33% in constant currency), with AI contributing 13 points of growth.

AI positive

AI revenue run rate

AI business surpassed a $13 billion annual revenue run rate, up 175% year-over-year.

Copilot positive

Copilot adoption surge

Microsoft 365 Copilot customers grew 60% quarter-over-quarter, with broad enterprise adoption.

CapEx neutral

Massive AI investment

Capital expenditures reached $22.6B as Microsoft invests heavily in AI infrastructure and data centers.

Gaming neutral

Gaming content revenue up

Xbox content and services revenue grew 2%, with Game Pass subscribers reaching new records.

Guidance positive

Strong Q3 outlook

Q3 revenue guidance of $68.1-69.1B above consensus, signaling continued momentum.

Direct Quotes

Satya Nadella

CEO • AI Strategy

"We are innovating across our tech stack to help every customer build AI-first business processes and applications. Agentic AI is emerging as the next big step, and we're leading this transition."

Satya Nadella

CEO • AI Revenue

"Our AI business has surpassed a $13 billion annual revenue run rate, increasing 175% year-over-year. Customers are moving from experimentation to production deployments."

Amy Hood

CFO • Financial Results

"Revenue was $69.6 billion, increasing 12 percent and 14 percent in constant currency, with better-than-expected results across each segment."

Satya Nadella

CEO • Copilot Adoption

"We now have over 230,000 organizations using Microsoft 365 Copilot, up 60% quarter-over-quarter. The AI transformation of work is happening at scale."

All MSFT Quarters

Q3 2025 →