Microsoft Corporation · Earnings release · 8-K Exhibit 99

EX-99.1 2 msft-ex99_1.htm EX-99.1 EX-99.1 Exhibit 99.1 Microsoft Cloud and AI Strength Drives Third Quarter Results REDMOND, Wash. — April 30, 2025 — Microsoft Corp. today announced the following results for the quarter ended March 31, 2025, as compared to the corresponding period of last fiscal year: • Revenue was $70.1 billion and increased 13% (up 15% in constant currency) • Operating income was $32.0 billion and increased 16% (up 19% in constant currency) • Net income was $25.8 billion and increased 18% (up 19% in constant currency) • Diluted earnings per share was $3.46 and increased 18% (up 19% in constant currency) “T1Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” said Satya Nadella, chairman and chief executive officer of Microsoft. “From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.” “We delivered a strong quarter with Microsoft Cloud revenue of $42.4 billion, up 20% (up 22% in constant currency) year-over-year driven by continued demand for our differentiated offerings,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

Business Highlights Revenue in Productivity and Business Processes was $29.9 billion and increased 10% (up 13% in constant currency), with the following business highlights: • Microsoft 365 Commercial products and cloud services revenue increased 11% (up 14% in constant currency) driven by T2Microsoft 365 Commercial cloud revenue growth of 12% (up 15% in constant currency) • Microsoft 365 Consumer products and cloud services revenue increased 10% (up 12% in constant currency) driven by Microsoft 365 Consumer cloud revenue growth of 10% (up 12% in constant currency) • LinkedIn revenue increased 7% (up 8% in constant currency) • Dynamics products and cloud services revenue increased 11% (up 13% in constant currency) driven by T3Dynamics 365 revenue growth of 16% (up 18% in constant currency) Revenue in Intelligent Cloud was $26.8 billion and increased 21% (up 22% in constant currency), with the following business highlights: • Server products and cloud services revenue increased 22% (up 24% in constant currency) driven by T4Azure and other cloud services revenue growth of 33% (up 35% in constant currency) Revenue in More Personal Computing was $13.4 billion and increased 6% (up 7% in constant currency), with the following business highlights: • Windows OEM and Devices revenue increased 3% • Xbox content and services revenue increased 8% (up 9% in constant currency) • T5Search and news advertising revenue excluding traffic acquisition costs increased 21% (up 23% in constant currency) T6Microsoft returned $9.7 billion to shareholders in the form of dividends and share repurchases in the third quarter of fiscal year 2025.     Business Outlook Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Quarterly Highlights, Product Releases, and Enhancements Every quarter Microsoft delivers hundreds of products, either as new releases, services, or enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge. Here are the major product releases and other highlights for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities. Environmental, Social, and Governance (ESG) To learn more about Microsoft’s corporate governance and our environmental and social practices, please visit our investor relations Board and ESG website and reporting at Microsoft.com/transparency .

Webcast Details Satya Nadella, chairman and chief executive officer, Amy Hood, executive vice president and chief financial officer, Alice Jolla, chief accounting officer, Keith Dolliver, corporate secretary and deputy general counsel, and Jonathan Neilson, vice president of investor relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/en-us/investor . The webcast will be available for replay through the close of business on April 30, 2026. Constant Currency Microsoft presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.

To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year. Microsoft has provided this non-GAAP financial information to aid investors in better understanding our performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Financial Performance Constant Currency Reconciliation   Three Months Ended March 31,                                      ($ in millions, except per share amounts)   Revenue   Operating Income   Net Income   Diluted Earnings per Share                                     2024 As Reported (GAAP)   $61,858   $27,581   $21,939   $2.94 2025 As Reported (GAAP)   $70,066   $32,000   $25,824   $3.46 Percentage Change Y/Y (GAAP)   13%   16%   18%   18% Constant Currency Impact   $(1,059)   $(703)   $(392)   $(0.05) Percentage Change Y/Y Constant Currency   15%   19%   19%   19%       Segment Revenue Constant Currency Reconciliation   Three Months Ended March 31,                              ($ in millions)   Productivity and Business Processes   Intelligent Cloud   More Personal Computing                             2024 As Reported (GAAP)   $27,113   $22,141   $12,604 2025 As Reported (GAAP)   $29,944   $26,751   $13,371 Percentage Change Y/Y (GAAP)   10%   21%   6% Constant Currency Impact   $(626)   $(308)   $(125) Percentage Change Y/Y Constant Currency   13%   22%   7% We have recast certain prior period amounts to conform to the way we internally manage and monitor our business.

Selected Product and Service Revenue Constant Currency Reconciliation   Three Months Ended March 31, 2025                               Percentage Change Y/Y (GAAP)   Constant Currency Impact   Percentage Change Y/Y Constant Currency                             Microsoft Cloud   20%   2%   22% Microsoft 365 Commercial products and cloud services   11%   3%   14% Microsoft 365 Commercial cloud   12%   3%   15% Microsoft 365 Consumer products and cloud services   10%   2%   12% Microsoft 365 Consumer cloud   10%   2%   12% LinkedIn   7%   1%   8% Dynamics products and cloud services   11%   2%   13% Dynamics 365   16%   2%   18% Server products and cloud services   22%   2%   24% Azure and other cloud services   33%   2%   35% Windows OEM and Devices   3%   0%   3% Xbox content and services   8%   1%   9% Search and news advertising excluding traffic acquisition costs   21%   2%   23%   About Microsoft Microsoft (Nasdaq “MSFT” @microsoft) creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of our customers.

The technology company is committed to making AI available broadly and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more. Forward-Looking Statements Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as: • intense competition in all of our markets that may adversely affect our results of operations; • focus on cloud-based and AI services presenting execution and competitive risks; • significant investments in products and services that may not achieve expected returns; • acquisitions, joint ventures, and strategic alliances that may have an adverse effect on our business; • impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;     • cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position; • disclosure and misuse of personal data that could cause liability and harm to our reputation; • the possibility that we may not be able to protect information stored in our products and services from use by others; • abuse of our advertising, professional, marketplace, or gaming platforms that may harm our reputation or user engagement; • products and services, how they are used by customers, and how third-party products and services interact with them, presenting security, privacy, and execution risks; • issues about the use of AI in our offerings that may result in reputational or competitive harm, or legal liability; • excessive outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure; • supply or quality problems; • government enforcement under competition laws and new market regulation may limit how we design and market our products; • potential consequences of trade and anti-corruption laws; • potential consequences of existing and increasing legal and regulatory requirements; • laws and regulations relating to the handling of personal data that may impede the adoption of our services or result in increased costs, legal claims, fines, or reputational damage; • claims against us that may result in adverse outcomes in legal disputes; • uncertainties relating to our business with government customers; • additional tax liabilities; • sustainability regulations and expectations that may expose us to increased costs and legal and reputational risk; • an inability to protect and utilize our intellectual property may harm our business and operating results; • claims that Microsoft has infringed the intellectual property rights of others; • damage to our reputation or our brands that may harm our business and results of operations; • adverse economic or market conditions that may harm our business; • catastrophic events or geo-political conditions, such as the COVID-19 pandemic, that may disrupt our business; • exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange; and • the dependence of our business on our ability to attract and retain talented employees.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/en-us/investor . All information in this release is as of March 31, 2025. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.     For more information, press only: Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777, rrt@we-worldwide.com For more information, financial analysts and investors only: Jonathan Neilson, Vice President, Investor Relations, (425) 706-4400 Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news .

Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at http://www.microsoft.com/en-us/investor .     MICROSOFT CORPORATION   INCOME STATEMENTS (In millions, except per share amounts) (Unaudited)     Three Months Ended March 31,   Nine Months Ended March 31,   2025   2024   2025   2024                                     Revenue:                 Product   $15,319   $17,080   $46,810   $51,556 Service and other   54,747   44,778   158,473   128,839                                     Total revenue   70,066   61,858   205,283   180,395                                     Cost of revenue:                 Product   3,037   4,339   10,187   13,834 Service and other   18,882   14,166   53,630   40,596                                     Total cost of revenue   21,919   18,505   63,817   54,430                                     Gross margin   48,147   43,353   141,466   125,965 Research and development   8,198   7,653   23,659   21,454 Sales and marketing   6,212   6,207   18,369   17,640 General and administrative   1,737   1,912   5,233   5,363                                     Operating income   32,000   27,581   94,205   81,508 Other expense, net   (623)   (854)   (3,194)   (971)                                     Income before income taxes   31,377   26,727   91,011   80,537 Provision for income taxes   5,553   4,788   16,412   14,437                                     Net income   $25,824   $21,939   $74,599   $66,100                                     Earnings per share:                 Basic   $3.47   $2.95   $10.03   $8.90 Diluted   $3.46   $2.94   $9.99   $8.85                   Weighted average shares outstanding:                 Basic   7,434   7,431   7,434   7,431 Diluted   7,461   7,472   7,466   7,467                         COMPREHENSIVE INCOME STATEMENTS (In millions) (Unaudited)     Three Months Ended   Nine Months Ended   March 31,   March 31,   2025   2024   2025   2024                                     Net income   $25,824   $21,939   $74,599   $66,100                                     Other comprehensive income (loss), net of tax:                 Net change related to derivatives   (20)   10   4   28 Net change related to investments   450   (202)   1,130   869 Translation adjustments and other   353   (294)   (377)   11                                     Other comprehensive income (loss)   783   (486)   757   908                                     Comprehensive income   $26,607   $21,453   $75,356   $67,008                         BALANCE SHEETS (In millions) (Unaudited)     March 31, 2025   June 30, 2024                     Assets         Current assets:         Cash and cash equivalents   $28,828   $18,315 Short-term investments   50,790   57,228                     Total cash, cash equivalents, and short-term investments   79,618   75,543 Accounts receivable, net of allowance for doubtful accounts of $695  and $830   51,700   56,924 Inventories   848   1,246 Other current assets   24,478   26,021                     Total current assets   156,644   159,734 Property and equipment, net of accumulated depreciation of $87,074 and $76,421   183,939   135,591 Operating lease right-of-use assets   24,475   18,961 Equity and other investments   16,035   14,600 Goodwill   119,329   119,220 Intangible assets, net   23,968   27,597 Other long-term assets   38,234   36,460                     Total assets   $562,624   $512,163                     Liabilities and stockholders' equity         Current liabilities:         Accounts payable   $26,250   $21,996 Short-term debt   0   6,693 Current portion of long-term debt   2,999   2,249 Accrued compensation   10,579   12,564 Short-term income taxes   6,805   5,017 Short-term unearned revenue   44,636   57,582 Other current liabilities   22,937   19,185                     Total current liabilities   114,206   125,286 Long-term debt   39,882   42,688 Long-term income taxes   25,061   27,931 Long-term unearned revenue   2,840   2,602 Deferred income taxes   2,522   2,618 Operating lease liabilities   17,686   15,497 Other long-term liabilities   38,536   27,064                     Total liabilities   240,733   243,686                     Commitments and contingencies         Stockholders' equity:         Common stock and paid-in capital - shares authorized 24,000; outstanding 7,434  and 7,434   106,965   100,923 Retained earnings   219,759   173,144 Accumulated other comprehensive loss   (4,833)   (5,590)                     Total stockholders' equity   321,891   268,477                     Total liabilities and stockholders' equity   $562,624   $512,163                 CASH FLOWS STATEMENTS (In millions) (Unaudited)     Three Months Ended   Nine Months Ended   March 31,   March 31,   2025   2024   2025   2024                                     Operations                 Net income   $25,824   $21,939   $74,599   $66,100 Adjustments to reconcile net income to net cash from operations:                 Depreciation, amortization, and other   8,740   6,027   22,950   15,907 Stock-based compensation expense   2,980   2,703   8,901   8,038 Net recognized losses (gains) on investments and derivatives   (298)   49   553   261 Deferred income taxes   (2,244)   (1,323)   (4,835)   (3,593) Changes in operating assets and liabilities:                 Accounts receivable   (2,461)   (2,028)   5,598   6,055 Inventories   52   260   390   1,229 Other current assets   1,076   951   642   880 Other long-term assets   (518)   (2,137)   (3,368)   (5,577) Accounts payable   1,179   648   1,221   (659) Unearned revenue   (1,032)   (645)   (12,923)   (10,309) Income taxes   1,298   2,622   (1,081)   2,493 Other current liabilities   2,839   2,803   576   215 Other long-term liabilities   (391)   48   292   313                                     Net cash from operations   37,044   31,917   93,515   81,353                                     Financing                 Proceeds from issuance (repayments) of debt, maturities of 90 days or less, net   0   (3,810)   (5,746)   6,392 Proceeds from issuance of debt   0   6,352   0   24,198 Repayments of debt   (2,250)   (11,589)   (3,216)   (16,005) Common stock issued   546   522   1,508   1,468 Common stock repurchased   (4,781)   (4,213)   (13,874)   (13,044) Common stock cash dividends paid   (6,169)   (5,572)   (17,913)   (16,197) Other, net   (382)   (498)   (1,614)   (1,006)                                     Net cash used in financing   (13,036)   (18,808)   (40,855)   (14,194)                                     Investing                 Additions to property and equipment   (16,745)   (10,952)   (47,472)   (30,604) Acquisition of companies, net of cash acquired and divestitures, and purchases of intangible and other assets   (981)   (1,575)   (4,235)   (67,790) Purchases of investments   (4,474)   (2,183)   (8,144)   (14,901) Maturities of investments   6,721   3,350   11,461   23,218 Sales of investments   2,161   1,941   6,688   8,871 Other, net   604   (1,281)   (325)   (916)                                     Net cash used in investing   (12,714)   (10,700)   (42,027)   (82,122)                                     Effect of foreign exchange rates on cash and cash equivalents   52   (80)   (120)   (107)                                     Net change in cash and cash equivalents   11,346   2,329   10,513   (15,070) Cash and cash equivalents, beginning of period   17,482   17,305   18,315   34,704                                     Cash and cash equivalents, end of period   $28,828   $19,634   $28,828   $19,634                         SEGMENT REVENUE AND OPERATING INCOME (In millions) (Unaudited)     Three Months Ended   Nine Months Ended   March 31,   March 31,   2025   2024   2025   2024                                     Revenue                                   Productivity and Business Processes   $29,944   $27,113   $87,698   $78,193 Intelligent Cloud   26,751   22,141   76,387   63,679 More Personal Computing   13,371   12,604   41,198   38,523                                     Total   $70,066   $61,858   $205,283   $180,395                                     Operating Income                                   Productivity and Business Processes   $17,379   $15,143   $50,780   $43,955 Intelligent Cloud   11,095   9,515   32,449   27,978 More Personal Computing   3,526   2,923   10,976   9,575                                     Total   $32,000   $27,581   $94,205   $81,508                   We have recast certain prior period amounts to conform to the way we internally manage and monitor our business.