Microsoft’s cloud and AI companies are doing fairly properly — and their affect is being felt throughout the corporate. In its Q2 2025 earnings, Microsoft introduced income of $69.6 billion for the quarter, up 12 % year-over-year, and web earnings of $24.1 billion, which is up 10 % year-over-year.
As for the AI enterprise, CEO Satya Nadella says in a press release that it has “surpassed an annual income run price of $13 billion, up 175 % year-over-year.” The firm’s Azure and different cloud companies enterprise grew 31 % year-over-year, a slight lower from 33 % YoY development the earlier quarter.
The firm’s gaming revenues didn’t fare so properly. Gaming income declined 7 %, and Xbox {hardware} income declined 29 %. Microsoft has been shifting away from a spotlight by itself {hardware} with messaging like its “This is an Xbox” advert marketing campaign and bringing Xbox Game Studios video games to different platforms, and people adjustments may very well be contributing to the decline.
That means the main focus is as a substitute on video games and companies, and that’s the place the enterprise is seeing some enhancements. Xbox content material and companies income have been up 2 %, “pushed by development in Xbox Game Pass,” Microsoft says. (Last quarter, Microsoft’s software program gaming revenues have been approach up whilst Xbox {hardware} income declined.)
During Wednesday’s earnings name, Nadella stated that Game Pass “set a brand new quarterly income file” and famous that Xbox Cloud Gaming noticed a “file 140 million hours streamed” through the quarter. Nadella additionally revealed that Indiana Jones and the Great Circle has “already been performed by greater than 4 million folks.”
In its press launch, Microsoft stated that it noticed Windows OEM and Devices income development of 4 % year-over-year, a slight bump from 2 % in Q1.
On the earnings name, Microsoft CFO Amy Hood stated that Windows OEM and units ought to decline low to mid single digits in Q3 2025. Overall gaming income is predicted to develop in single digits, with Xbox content material and companies anticipated to develop low to mid single digits. Xbox {hardware} income “will decline yr over yr.”
Update, January twenty ninth: Added particulars from Microsoft’s earnings name.
