Microsoft reports Q1 revenue up 16% YoY to $65.6B, Microsoft 365 Commercial products and cloud services up 13%, LinkedIn up 10%, and net income up 11% to $24.7B
Microsoft's prior comparable Q1 showed 13% revenue growth and 15% Office Commercial growth in 2023; this quarter extends that enterprise-software momentum at a larger revenue base. It also follows a 17% revenue increase in the preceding fiscal Q3, when commercial Office and LinkedIn were likewise growing.
The subsequent coverage shows growth continuing, though at a slower company-wide rate: Q2 revenue rose 12% to $69.6 billion and Microsoft 365 Commercial products and cloud services grew 15%. That makes this result a useful marker of the durability of Microsoft's commercial subscription and cloud businesses.
First-order effects
Microsoft enters the next quarter with higher revenue and profit, supported by 13% growth in Microsoft 365 Commercial products and cloud services.
LinkedIn's 10% growth adds another expanding business line within Microsoft's commercial portfolio.
Second-order effects
The results raise the performance bar for enterprise-software rivals competing for corporate productivity, cloud, and professional-networking budgets.
Sustained Microsoft 365 commercial growth strengthens Microsoft's ability to prioritize product investment and distribution across its existing enterprise customer base.
Third-order effects
If commercial and cloud services keep outgrowing the company’s overall base, Microsoft’s mix will continue shifting toward recurring, enterprise-led revenue rather than one-off software sales.
The pattern reinforces a market structure in which large platforms with bundled workplace software, cloud services, and professional data can compound distribution advantages; the pace remains dependent on customer IT spending.
The trend: Microsoft’s results are one data point in the continued consolidation of enterprise technology spending around recurring cloud and productivity platforms.
A question on the OpenAI/Microsoft relationship: “We have been, I think everyone on the line, picking up signals that perhaps $MSFT wants to diversify somewhat at the model layer & offer customers choice. Satya, I'd love to get your framing of the relationship” The response: [vid…
Not many $150B+ revenue businesses growing 22% y/y 💪🏼 $MSFT “Strong execution by our sales teams and partners delivered a solid start to our fiscal year with Microsoft Cloud revenue of $38.9 billion, up 22% year-over-year” https://www.microsoft.com/...
Microsoft double beat. CFO: “Strong execution by our sales teams and partners delivered a solid start to our fiscal year with Microsoft Cloud revenue of $38.9 billion, up 22% YoY” $MSFT: +1% AH [image]
new: Microsoft is officially becoming less profitable because of expected losses at OpenAI. the company said today that other income and expense in Q4 should be -$1.5 billion, mainly because of its OpenAI holding https://www.cnbc.com/...
Okay. It's $10bn, right? But AI isn't its own product category. This revenue is booked within Microsoft 365 and azure revenue, so that's what, $2.5bn a quarter of extra revenue for $19-20bn capex? How much does it cost to service this revenue? They lost $683m on OpenAI alone…
Today, Microsoft reported Q1 results - a solid start to FY25. We also shared that our all-up AI business is on track to surpass an annual run rate of $10 billion in Q2. This will make it the fastest business in our history to reach this milestone. :) https://microsoft.com/...
New: Kicking off earnigns call, @satyanadella said that Microsoft's AI business, all told, is set to be at a $10 billion annual run rate next quarter, making it the company's fastest growing business to reach that milestone.