Microsoft Reports Strong Cloud Earnings, With Windows And Xbox Up Too

Microsoft just posted the 4th and last 4th of its 2025 fiscal financial results. The package shaper made $76.4 cardinal successful gross and a nett income of $27.2 cardinal during Q4. Revenue is up 18 percent, and nett income has accrued by 24 percent.

Like clockwork, unreality services are nan beardown constituent of Microsoft’s gross this quarter. Azure gross grew 39 percent year-over-year, and Microsoft CEO Satya Nadella says “Azure surpassed $75 cardinal successful revenue” for nan year, up 34 percent.

Windows and Surface revenue

The PC marketplace is still emotion nan effects of nan Trump tariffs and user spending, while businesses look to refresh PCs up of Windows 10’s extremity of support successful October. As a result, Windows OEM and devices gross is up 3 percent twelvemonth complete year, driven by maturation successful Windows OEM revenue.

Gartner said earlier this month that PC shipments were up much than 4 percent successful nan caller quarter, acknowledgment to a Windows 11 refresh rhythm for desktop PCs. Microsoft chiefly makes money from Windows done OEM revenue, nan value that manufacturers salary to licence Windows for laptops and PCs.

While this clip past year Microsoft’s Surface gross had been successful diminution for 2 years, Microsoft started combining Windows and devices gross together during this past financial year, truthful it’s still not clear really Surface is performing.

Microsoft did motorboat 2 caller Surface devices successful nan caller quarter, though: nan 12-inch Surface Pro and 13-inch Surface Laptop. Both devices launched midway done nan quarter, truthful nan afloat effect of income connected Windows OEM and devices gross won’t beryllium felt until adjacent quarter.

Xbox and gaming

Xbox contented and services revenue, which includes Xbox Game Pass, is up by 13 percent this quarter. Microsoft still isn’t revealing immoderate caller Game Pass subscriber numbers, though, and nan past clip we sewage an update was successful February 2024, erstwhile Microsoft revealed location were 34 cardinal subscribers, including Xbox Game Pass Core (previously Xbox Live Gold) members.

Microsoft has been aggressively pushing up pinch its strategy to bring much antecedently Xbox-exclusive games to PlayStation and Nintendo Switch complete nan past year. Senua’s Saga: Hellblade II is arriving connected PS5 adjacent month, alongside nan original Gears of War arsenic a remastered version. Microsoft besides launched Forza Horizon 5 on PS5 earlier this year, arsenic good arsenic Age of Empires II: Definitive Edition, Age of Mythology: Retold, and Indiana Jones and nan Great Circle.

While nan move to bring much Xbox games to PlayStation mightiness person angered immoderate fans, it has proven to beryllium a successful choice. Preorders for Indiana Jones and nan Great Circle and Forza Horizon 5 topped Sony’s ain PlayStation Store earlier this year, and Circana revealed this week that Microsoft had six of nan 10 top-selling games connected PlayStation successful nan caller quarter.

Xbox hardware is still struggling, though. Xbox hardware gross is down 22 percent this quarter, contempt a engaged play for Game Pass. Overall gaming gross astatine Microsoft is up 10 percent.

Microsoft’s Xbox everyplace strategy — which I’ve been covering intimately in my Notepad newsletter over nan past twelvemonth — will besides see titles for nan Nintendo Switch 2. It’s imaginable we mightiness moreover spot 1 during Nintendo’s Switch 2 partner Direct tomorrow.

Looking ahead, Microsoft is besides heading to nan Gamescom show adjacent month, wherever it will fto attendees play pinch its caller Xbox Ally handheld devices. A playable demo of nan long-awaited Hollow Knight: Silksong will besides beryllium disposable connected nan ROG Xbox Ally handhelds, arsenic good “a mates much surprises astatine nan show from our partners too.”

Developing…