MSFT · Microsoft Corporation

Microsoft delivered a strong fiscal third quarter, with revenue of $82.9 billion, up 18% year-over-year, driven by continued momentum in cloud and AI services. Operating income rose 20% to $38.4 billion, reflecting operating leverage and scale. Net income on a GAAP basis was $31.8 billion, up 23%, while non-GAAP net income (excluding OpenAI investment impacts) was $31.8 billion, up 20%. Diluted EPS of $4.27 (GAAP) exceeded the prior consensus estimate of $4.14, marking the fourth consecutive beat.

The standout driver was Microsoft Cloud revenue, which reached $54.5 billion, up 29% (25% in constant currency). Within the cloud, Azure and other cloud services revenue surged 40% (39% constant currency), fueled by AI workloads and migration. The commercial remaining performance obligation (RPO) soared 99% to $627 billion, indicating strong future revenue visibility. The AI business alone surpassed an annual revenue run rate of $37 billion, up 123% year-over-year, underscoring the rapid adoption of AI solutions.

Segment-wise, Productivity and Business Processes revenue grew 17% to $35.0 billion, with Microsoft 365 Commercial cloud revenue up 19% and Dynamics 365 up 22%. Intelligent Cloud revenue increased 30% to $34.7 billion. More Personal Computing revenue declined 1% to $13.2 billion, with Xbox content and services down 5% and Windows OEM and Devices down 2%, partially offset by search advertising revenue growth of 12%.

Management commentary highlighted strong execution and demand. CEO Satya Nadella emphasized the company's focus on cloud and AI infrastructure. CFO Amy Hood noted results exceeded expectations across revenue, operating income, and EPS. The company returned $10.2 billion to shareholders through dividends and share repurchases. No specific forward guidance was provided in the press release, but the earnings call was scheduled for further details.