Microsoft's first quarter numbers for its 2025 financial year have exceeded expectations, but rather than having a positive impact on share prices, the stock has fallen on future concerns.
First quarter 2025 revenue was $65.6 billion, up 16% and a $1 billion jump from Wall Street's previous projections. Operating income also increased 14% to $30.6 billion.
However, despite the strong performance, the company's shares fell 4% in after-hours trading, likely as a result of slower-than-expected growth projections for the next three-month period.
Microsoft just had a good quarter, but the next one might not be as good
The company's CEO, Satya Nadella, commented: “AI-driven transformation is changing work, work artifacts and workflow across all roles, functions and business processes,” indicating that efforts in Redmond cloud are responsible for much of the continued growth.
“Strong execution by our sales teams and partners enabled a strong start to our fiscal year with Microsoft Cloud revenue of $38.9 billion,” said Chief Financial Officer Amy Hood. Microsoft Cloud's $38.9 billion in quarterly revenue marks a significant 22% year-over-year increase.
In addition to its core cloud division, Microsoft noted that LinkedIn revenue had increased 10% and Microsoft 365 business products and cloud services had grown 13%; These are two areas of the business that have received artificial intelligence in recent months, following billions of dollars of investment from the company.
However, despite predicting continued growth of between $68.1bn and $69.1bn in the next financial quarter, shareholders have lost confidence that the tech giant will continue to deliver such strong performance, causing the shares to fall. . Analysts had previously projected quarterly revenue of $69.83 billion, more than the high end of Microsoft's latest expectations.
