Q4 2025 Microsoft Corp Earnings Call Transcript
Key Points
- Microsoft Cloud surpassed $168 billion in annual revenue, up 23%, showcasing strong growth in cloud services.
- Azure achieved $75 billion in annual revenue, up 34%, driven by growth across all workloads and leading the AI infrastructure wave.
- Microsoft 365 Copilot adoption is accelerating, with significant seat additions and strong usage intensity.
- LinkedIn continues to grow with 1.2 billion members and four consecutive years of double-digit member growth.
- Gaming revenue increased by 10%, with Xbox content and services revenue up 13%, driven by successful game launches and Xbox Game Pass growth.
- Microsoft Cloud gross margin percentage decreased by 2 points year over year due to scaling AI infrastructure.
- On-premises server business revenue decreased by 2%, reflecting a shift to cloud offerings.
- Talent Solutions on LinkedIn continues to be impacted by weakness in the hiring market.
- Despite strong demand, Azure remains capacity-constrained, indicating potential challenges in meeting customer needs.
- Operating expenses increased by 6%, reflecting ongoing investments in AI and cloud infrastructure.
Greetings and welcome to the Microsoft fiscal-year 2025 fourth-quarter earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce Jonathan Nielson, Vice President of Investor Relations.
Good afternoon, and thank you for joining us today. On the call with me are Satya Nadella, Chairman and Chief Executive Officer; Amy Hood, Chief Financial Officer; Alice Jolla, Chief Accounting Officer; and Keith Dolliver, Corporate Secretary and Deputy General Counsel.
On the Microsoft Investor Relations website, you can find our earnings press release and financial summary slide deck, which is intended to supplement our prepared remarks during today's call and provides a reconciliation of differences between GAAP and non-GAAP financial measures. More detailed outlook slides will be available on the Microsoft Investor Relations website when we provide outlook commentary on today's call.
On this call, we
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