"AI is changing... across every role, function, and business process, helping customers drive new growth and operating leverage." - Satya Nadella
— Satya Nadella
03Detailed Report
MSFT
Microsoft Corporation
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 10, 2026
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Executive Summary
In Q1 2025, Microsoft Corporation reported impressive financial performance with revenues reaching $65.6 billion, reflecting a year-over-year growth of 16%. A significant driver of this growth was the Microsoft Cloud segment, which generated $38.9 billion, up 22%, underscoring the robust demand for cloud services amid ongoing digital transformation across industries. Earnings per share (EPS) rose to $3.30, a 10% increase from the previous year, showcasing solid execution and operational efficiency. The management emphasized the sustained strength of their cloud offerings and the transformative impact of AI across their product portfolio, positioning the company favorably for future growth in both commercial and consumer markets.
Key Performance Indicators
Revenue
Increasing
65.59B
QoQ: 1.33% | YoY: 16.04%
Gross Profit
Increasing
45.49B
69.35% margin
QoQ: 0.98% | YoY: 13.11%
Operating Income
Increasing
30.55B
QoQ: 9.41% | YoY: 13.60%
Net Income
Increasing
24.67B
QoQ: 11.94% | YoY: 10.66%
EPS
Increasing
3.32
QoQ: 12.16% | YoY: 10.67%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue Performance:
- Total Revenue: $65.6 billion, up 16% YoY.
- Microsoft Cloud Revenue: $38.9 billion, up 22% YoY.
- EPS: $3.30, up 10% YoY.
The increase in revenue is attributed to promising growth in both the Intelligent Cloud and Personal Computing segments, alongside strong contributions from Microsoft 365 and Dynamics 365.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
65.59B
16.04%
1.33%
Gross Profit
45.49B
13.11%
0.98%
Operating Income
30.55B
13.60%
9.41%
Net Income
24.67B
10.66%
11.94%
EPS
3.32
10.67%
12.16%
Key Financial Ratios
Gross Profit Margin
Excellent
69.40%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Excellent
46.60%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Excellent
37.60%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Fair
4.72%
Return on assets is acceptable but below top-tier companies
Return on Equity
Fair
8.57%
Return on equity is acceptable but below top-tier companies
Current Ratio
Adequate
1.30
Current ratio meets minimum requirements but limited cushion
Debt to Equity
Conservative
0.21
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Growth
32.42x
Elevated P/E suggests growth expectations or premium valuation
Price to Book
High Premium
11.12x
Very high premium suggests asset-light business model or lofty expectations
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