On Wednesday, Microsoft reported higher revenue than expected for the fourth quarter of 2025 thanks to its booming cloud business.
“Cloud and AI are the driving force behind business transformation across all industries and sectors,” said Satya Nadella, chairman and CEO of Microsoft, in a statement.
Nadella has revealed the revenue for its cloud computing platform, Microsoft Azure, for the first time.
Azure recorded revenues exceeding $75 billion for the fiscal year ended June 30, up 34% from the previous year. This is “driven by growth across all workloads,” including AI workloads. On average, Azure brought in around $19 billion per quarter and around $10 billion in Cloud King AWS's shyness, recently reporting net sales of around $29 billion in the first quarter (Amazon reports revenue for the second quarter on Thursday). Google Cloud's annual run rate is $50 billion per Alphabet's second quarter 2025 revenue report [PDF].
“We continued to lead the wave of AI infrastructure and shared quarterly this year,” Nadella said in the company's revenue call.
Nadella did not share how AI grasped the equation. This is a question that fits into the minds of financial analysts, taking into account Microsoft's plan to spend $80 billion on FY25 capital expenditures to build a data center that can handle AI businesses.
Mark Moerdler, a senior analyst at Bernstein Research, asked during the call what the best way companies can monetize AI as a software service.
Nadella has provided a rambling answer to comparing AI to the cloud business.
Microsoft CFO Amy Hood has offered a more focused response, claiming that AI monetization is similar to other software monetizations.
“There's a per-user logic,” she said. “There are layers per user. These layers may be related to consumption. There may be pure consumption models. I think we will continue to look at these blends, especially as the capabilities of the AI model grow.”
In other words, Microsoft adds AI features to its products, followed by fees. When AI is injected into all applications and services, all revenue comes from AI.
And there's a lot of income. Overall, IT Mega-Giant reported quarterly revenue of $76.4 billion, up 18% from last year, operating profit increased 24% to $34.3 billion and 23% to $27.2 billion. Earnings per share increased 24% to $3.65.
Over the entire fiscal year, Microsoft increased its revenue of $281.7 billion by 15%, with operating profit of $128.5 billion, a 17% increase of net profit of $100 billion, and a 16% increase. Earnings per share increased by 16%, $13.64.
Azure is part of Microsoft's Intelligent Cloud Group, which increased revenue by 26% in quarter by $29.9 billion.
The company's Productivity and Business Process Group increased its revenue of $33.1 billion by 16%. This includes Microsoft 365 commercial and consumer products, LinkedIn, and Dynamics products.
More personal computing groups generated $13.5 billion, up 9%. This includes Windows OEMs and devices, Xbox content and services, as well as search and news ad revenue.
Worries about the CAPEX and AI revenue generation do not appear to bother investors who have driven Microsoft's stock price by about 8% following the company's revenue report. Their enthusiasm has led to the company's market capitalization rising above $4 trillion in after-hours trading, making AI weapons registrant Nvidia the second company in history to touch the $4,000,000,000,000 mark. ®
