Microsoft Q4: Cloud and AI Results Drive Record Revenue

ITAM News & Analysis

Microsoft Q4: Cloud and AI Results Drive Record Revenue

On 30^th July 2025, Microsoft released its much-anticipated FY25 Q4 earnings report. The results follow a surprisingly strong Q3, which exceeded the expectations of some of the most optimistic investors. The latest Q4 results continue with this trend. Microsoft reported quarterly revenue of $76.4 billion (an increase of 18% YoY). This demonstrates an impressive year-end for the Tech giant, which Satya Nadella described as “a record fiscal year”.

Reviewing the Q4 results tells a story of strong cloud performance, with Azure surpassing $75 billion in revenue. While the other side to that story shows a significant increase in operating expenses. Microsoft continues to aggressively invest in cloud to ensure Azure demand doesn’t outpace infrastructure availability.

Highlights

• Q4 revenue was $76.4 billion, which is an increase of 18% year-on-year.
• Total of $281.7 billion annual revenue, a 15% increase.
• Azure and other cloud services growth up by 39% year-over-year.
• Microsoft Cloud surpassed $168 billion in annual revenue, up 23%.
• Azure surpassed $75 billion in annual revenue, up 34%, driven by growth across all workloads.
• Microsoft now has 400 data centers across 70 regions, more than any other cloud provider.
• Customers continue to adopt Copilot at a faster rate than any other new Microsoft 365 suite, with strong usage intensity, as shown by our week-over-week retention.
• Dynamics 365 revenue growth of 23%.
• GitHub Copilot Enterprise customers increased 75% quarter-over-quarter as companies tailor Copilot to their own codebases.

What does this mean for ITAM?

Microsoft’s FY2025 results mark a pivotal moment for the ITAM industry, as its investment into expanding cloud and AI, solidify the theory that ITAM’s focus must shift further in this direction.

With Copilot adoption accelerating, ITAM professionals must focus on refining AI strategies. The increase to 20 million GitHub Copilot users is a symbolic reminder that even the development world cannot be exempt from the implementation of effective strategies around AI.

ITAM must also focus on refining cloud cost management strategies, ensuring optimised licensing, and resource allocation. Once again, this highlights the ever-increasing need for collaboration and even integration with FinOps teams.

It’s clear Microsoft customers are leaning into innovation and that innovation is leading to increased spending from customers. Perhaps one key takeaway for ITAM is that the technology industry is screaming out for new innovative ways of working. If we can capture this innovation in the ITAM space, it could drive increased adoption of ITAM technologies and methodologies.

Amid all this innovation, ITAM teams must continue to consider the sustainability impacts of managing new technology. Although we do not see such significant growth in this area, we do see a slow and steady increase in adoption of sustainability metric monitoring. Over time, as legislation increases in this area, it could result in the technology industry applying more caution to power-hungry AI solutions. ITAM teams can mitigate future challenges in this area by applying good AI policies and ensuring solutions have measurable ROI.

Conclusion

Microsoft’s FY25 results demonstrate a year of strategic acceleration in Cloud and AI.  Their focus, as we have seen with other cloud providers, seems to be on staying ahead of the cloud demand by increasing their infrastructure for Azure. The success seen in FY25 paints a picture of a technology industry that is crying out for new, innovative ways of working, resulting in growing complexity for the ITAM industry.

 

 

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