Microsoft reported its fiscal Q4 2025 results (calendar Q2 2025) with revenue of $76.44 billion, up 18% year-over-year, beating analysts’ expectations of $73.89 billion.

Adjusted earnings per share (EPS) came in at $3.65, up 24% YoY, also surpassing expectations of $3.37.

The most closely watched figure—Azure and other cloud services revenue—rose 39%, topping consensus estimates of 35%. For the first time, Microsoft disclosed Azure’s full-year revenue size: $75 billion for fiscal 2025, representing 34% year-over-year growth.

Looking ahead, Microsoft expects Q1 fiscal 2026 (calendar Q3 2025) revenue between $74.7 billion and $75.8 billion, with a midpoint of $75.25 billion—above the market estimate of $74.09 billion. Operating margin is forecast at 46.6%, higher than the expected 45.7%.

As for capital expenditure, Microsoft guided fiscal 2026 Capex above $120 billion (about $30 billion per quarter), representing 36% growth and exceeding previous consensus of $100.5 billion by 20%. CFO Amy Hood emphasized that the company holds $368 billion in remaining performance obligations (RPOs), and Capex is tightly aligned with actual demand.

Following the release, Microsoft’s stock surged more than 8% in pre-market trading, making it the second company after Nvidia to reach a $4 trillion market cap.

☁️ Azure Cloud: Rapid Shift from On-Premise, Strong New Customer Momentum

Microsoft’s GPT-4.0-based models have achieved the highest token throughput in the industry, with tokens processed per GPU increasing by 90% compared to a year ago.

Azure delivered remarkable growth, with analysts attributing it in part to the accelerated migration of on-premise data to the cloud. One analyst asked Microsoft executives to elaborate.

CEO Satya Nadella responded that Microsoft's technical capabilities enable seamless migration from on-premise systems to Azure. For example, Nestlé migrated over 200 SAP instances, 10,000+ servers, and 1.2 petabytes of data to Azure with minimal disruption, showcasing Microsoft’s strength.

He also noted that traditional internet cloud players like e-commerce companies are expanding rapidly. Some had not previously used Azure, but many are now choosing Microsoft—often drawn initially by AI, but staying for the broader capabilities. This is another driver of Azure’s sustained growth.

Microsoft launched Azure AI Foundry, which helps customers design, customize, and manage large-scale AI applications and agents. Already, 80% of Fortune 500 companies are using Foundry.

To meet local and national government requirements for data sovereignty, Microsoft introduced Microsoft Sovereign Cloud, the industry’s most comprehensive sovereign cloud solution, covering both public and private cloud deployments.

🤖 Copilot & Office Suite: Over 100 Million Monthly Users, Fortune 100 Adoption Surges

Across consumer and enterprise use cases, the Copilot family of apps now has over 100 million monthly active users. Clients of Microsoft 365 Copilot include global giants such as Barclays, UBS, Adobe, KPMG, Pfizer, and Wells Fargo, with seat purchases in the tens of thousands. A Barclays analyst on the earnings call expressed high satisfaction with Copilot’s performance.

GitHub Copilot now has 20 million users, with enterprise adoption growing 75% year-over-year. Many companies are customizing Copilot to align with their own codebases. Notably, 90% of Fortune 100 companies now use GitHub Copilot.

In the healthcare sector, Dragon Copilot delivered over 13 million clinical consultation notes this quarter, a nearly 7x increase from the prior year.

Dynamics 365 continues to gain market share. Notable clients include Verizon, which uses it for sales, and Domino’s Pizza Group, which uses it as its Enterprise Resource Planning (ERP) system.

In cybersecurity, Microsoft became the first in the industry to offer automated security and IT task management services.

🌐 Other Segments: LinkedIn and Gaming Deliver Solid Growth

LinkedIn now has 1.2 billion members, with double-digit membership growth for four consecutive years. Comment volume rose over 30%, and video engagement increased more than 20%.

In gaming, Microsoft boasts 500 million monthly active players and is now the largest game publisher across Xbox and PlayStation. Call of Duty: Black Ops 6 attracted 50 million players with over 2 billion hours of total playtime. Minecraft hit record highs in both monthly active users and revenue.

Nearly 40 new games are currently under development.