Microsoft Q3 revenue rises to $82.9B as Azure grows 40%
Microsoft posted Q3 revenue of $82.9 billion versus a $81.29 billion consensus, with Azure revenue up 40% and Cloud sales hitting $54.5 billion. Diluted EPS of $4.27 beat by $0.22 but shares slumped 1.5% as Azure growth met forecasts and capital expenditures rose 49% to $31.9 billion.
1. Quarterly Financial Results
Microsoft delivered Q3 revenue of $82.9 billion, outpacing the $81.29 billion consensus. Azure revenue increased 40% year over year while overall Cloud sales reached $54.5 billion, up 29% (25% in constant currency).
2. Earnings and Market Reaction
Diluted earnings per share came in at $4.27, beating the $4.05 estimate by $0.22. Despite the beat, shares fell about 1.5% in after-hours trading as Azure growth aligned with forecasts rather than exceeded them.
3. Infrastructure Investment Surge
Capital expenditures jumped 49% year over year to $31.9 billion as Microsoft ramped up spending on data centers and AI infrastructure. This elevated investment follows a prior quarter spend of $37.5 billion and supports long-term cloud capacity expansion.
4. AI Business and Partnerships
Microsoft’s AI unit surpassed an annual revenue run rate of $37 billion, up 123% year over year. The company secured a 20% share of OpenAI’s revenue through 2030 and expanded its AI ecosystem with partners like Anthropic, reinforcing its leadership in agentic computing solutions.