Microsoft Cloud and AI Strength Drives First Quarter Results
REDMOND, Wash. — October 29, 2025 — Microsoft Corp. today announced the following results for the quarter ended September 30, 2025, as compared to the corresponding period of last fiscal year:
- Revenue was $77.7 billion and increased 18% (up 17% in constant currency)
- Operating income was $38.0 billion and increased 24% (up 22% in constant currency)
- Net income, on a GAAP basis, was $27.7 billion and increased 12%, and on a non-GAAP basis was $30.8 billion and increased 22% (up 21% in constant currency)
- Diluted earnings per share, on a GAAP basis, was $3.72 and increased 13%, and on a non-GAAP basis was $4.13 and increased 23% (up 21% in constant currency)
- Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below
“Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact,” said Satya Nadella, chairman and chief executive officer of Microsoft. “It’s why we continue to increase our investments in AI across both capital and talent to meet the massive opportunity ahead.”
“We delivered a strong start to the fiscal year, exceeding expectations across revenue, operating income, and earnings per share,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “Continued strength in the Microsoft Cloud reflects the growing customer demand for our differentiated platform.”
The following table reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.
Three Months Ended September 30, | ||
| ($ in millions, except per share amounts) | Net Income | Diluted Earnings per Share |
| 2024 As Reported (GAAP) | $24,667 | $3.30 |
| Impact from investments in OpenAI | 523 | 0.07 |
| 2024 As Adjusted (non-GAAP) | $25,190 | $3.37 |
| 2025 As Reported (GAAP) | $27,747 | $3.72 |
| Impact from investments in OpenAI | 3,086 | 0.41 |
| 2025 As Adjusted (non-GAAP) | $30,833 | $4.13 |
| Percentage Change Y/Y (GAAP) | 12% | 13% |
| Percentage Change Y/Y Constant Currency | 11% | 11% |
| Percentage Change Y/Y (non-GAAP) | 22% | 23% |
| Percentage Change Y/Y (non-GAAP) Constant Currency | 21% | 21% |
Business Highlights
Microsoft Cloud revenue was $49.1 billion and increased 26% (up 25% in constant currency), and commercial remaining performance obligation increased 51% to $392 billion.
Revenue in Productivity and Business Processes was $33.0 billion and increased 17% (up 14% in constant currency), with the following business highlights:
- Microsoft 365 Commercial cloud revenue increased 17% (up 15% in constant currency)
- Microsoft 365 Consumer cloud revenue increased 26% (up 25% in constant currency)
- LinkedIn revenue increased 10% (up 9% in constant currency)
- Dynamics 365 revenue increased 18% (up 16% in constant currency)
Revenue in Intelligent Cloud was $30.9 billion and increased 28% (up 27% in constant currency), with the following business highlights:
- Azure and other cloud services revenue increased 40% (up 39% in constant currency)
Revenue in More Personal Computing was $13.8 billion and increased 4%, with the following business highlights:
- Windows OEM and Devices revenue increased 6%
- Xbox content and services revenue increased 1% (relatively unchanged in constant currency)
- Search and news advertising revenue excluding traffic acquisition costs increased 16% (up 15% in constant currency)
Microsoft returned $10.7 billion to shareholders in the form of dividends and share repurchases in the first quarter of fiscal year 2026.
Business Outlook
Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.