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At the start of the month, Microsoft announced that it was laying off 9,000 employees across the organization in cuts that affected a significant number of departments. CEO Satya Nadella then told employees that this decision is weighing heavily on him but emphasized that this is the "enigma of success" as the company"s headcount still remains the same while it inches closer to the $4 trillion market capitalization. In the wake of all this, the firm has now announced earnings for the fourth quarter of the 2025 fiscal year; basically FY25 Q4.
Overall, Microsoft reported a revenue of $76.4 billion in the latest quarter, which is a year-over-year increase of 18% compared to the $64.7 billion reported last time. Operating income grew by 23% to $34.3 billion and net income stood at $27.2 billion, which is also up by 24%. As such, the diluted earnings per share this time around was $3.65, which is also an increase of 24%.
As usual, the drivers behind this growth were primarily Microsoft 365 products and Azure, but other categories grew too. The Productivity and Business Processes revenue grew by 16% to $33.1 billion, fueled by boosts to Microsoft 365 commercial and consumer products, as well as LinkedIn and Dynamics 365. Intelligent Cloud revenue stood strong at $29.9 billion, with Azure recording an increase of 27%. Finally, the More Personal Computing category saw Windows OEM and devices revenue increase by 3%, Xbox services jump by 13%, and Search and news advertising grow by 21%, combining to result in $13.5 billion in revenue, which reflects a respectable growth of 9%
CEO Satya Nadella attributed the company"s financial growth to cloud and AI services too, noting that:
Cloud and AI is the driving force of business transformation across every industry and sector. We’re innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34 percent, driven by growth across all workloads.
All of this translates to a very strong fiscal year 2025 (FY25), where Microsoft recorded a revenue of $281.7 billion (+9% compared to FY24) throughout the year. Operating income was $128.5 billion (+17%), net income was a massive $101.8 billion (+16%), and diluted earnings per share stood at $13.64 (+16%).