Microsoft's revenue rose 18% to $77.67 billion in the quarter to Sep 30, 2025; Gaming revenue fell 2%

Written by Claude Sonnet 5.5, an AI model, from public records. Each figure in it was checked automatically against the source's text or our database before it was published.

Microsoft reported revenue of $77.67 billion for the quarter from Jul 1 to Sep 30, 2025, up 18% on the same quarter a year earlier, in a Form 10-Q (the quarterly report a US-listed company files with the SEC) filed on Oct 29, 2025. The company called it the first quarter of fiscal year 2026. Operating income, the profit from running the business before interest and tax, was $37.96 billion, up 24% from $30.55 billion. Net income, on a GAAP basis (US accounting rules), was $27.75 billion, up 12% from $24.67 billion. Diluted earnings per share were $3.72, against $3.30 a year earlier.1^,2^,3^,4^,5^,6^,7^,8^,9^,10^,11^,12^,13

Gaming revenue was $5.51 billion, against $5.62 billion in the same quarter a year earlier, a decrease of 2%. The filing put the fall down to Xbox hardware, whose revenue decreased 29% on a lower volume of consoles sold. Xbox content and services revenue, which the filing defined as first- and third-party content including games and in-game content, Xbox Game Pass and other subscriptions, Xbox Cloud Gaming, advertising and other cloud services, increased 1%. Microsoft credited growth in Xbox Game Pass and third-party content, offset in part by a decline in first-party content, and called the prior-year quarter a strong comparison.14^,15^,16^,17^,18^,19

Microsoft Cloud revenue was $49.1 billion, up 26%, and the company said Azure and other cloud services revenue grew 40%.20^,21

Net income carried losses on Microsoft's investments in OpenAI, which the filing said reduced net income by $3.1 billion, or $0.41 a share, in the quarter, and by $523 million, or $0.07 a share, a year earlier. Leaving those losses out, the company's own non-GAAP measure of net income, a figure outside US accounting rules, was $30.8 billion, up 22%.22^,23^,24^,25

In the earnings release filed the same day, chief executive Satya Nadella said Microsoft was continuing to increase its AI investments in capital and talent, and chief financial officer Amy Hood said the quarter exceeded expectations on revenue, operating income and earnings per share.26^,27^,28

We hold the text of the report's management discussion and analysis, and the notes to its financial statements are not in our records, so what they say about the OpenAI investment is not told here. Our records keep one value for each period of an SEC filer, so they cannot tell whether the year-earlier figures were restated.29^,30