Microsoft Corporation (MSFT.NE) Q3 2025 Earnings Report

Microsoft delivered a solid QQ3 2025 performance, with revenue of $70.07 billion and a gross margin of 68.7%, reflecting favorable mix and ongoing demand across its software infrastructure portfolio. Operating income reached $32.0 billion, translating to an operating margin of approximately 45.7%, and net income of $25.82 billion or about 36.9% net margin, underscoring robust profitability in a large, multi-segment business. The company generated strong operating cash flow of $37.04 billion and free cash flow of $20.30 billion, supporting an aggressive capital allocation program that included $4.78 billion of share repurchases and $6.17 billion of dividends in the period, while maintaining ample liquidity and a durable balance sheet. The quarterly results highlight a continued growth trajectory versus prior year (revenue up ~13.3% YoY) with modest quarter-on-quarter acceleration in some segments. The mix remains favorable to high-margin cloud services and productivity offerings, contributing to margin resilience even as Microsoft executives navigate ongoing investments in platform capabilities and go-to-market initiatives. While management guidance was not provided in the dataset, the liquidity and cash-generating machine position Microsoft well for sustained investment in cloud, AI-enabled solutions, and ecosystem expansion, complemented by a disciplined capital return program. Investors should monitor Azure and enterprise software demand trajectories, ongoing investment in research and development and sales & marketing, and the cadence of capital returns as drivers of longer-term upside and valuation stability.