Q4 results

• Revenue = $76.4 billion, up 18%
• Net Income = $27.2 billion, up 24%

The “Microsoft Cloud” segment, which is a combination of various cloud elements, hit $$46.7 billion for the quarter – an increase of 27% that made it 61% of Microsoft’s revenue for Q4.

Productivity & Business Processes

• Revenue = $33.1 billion, up 16%

Microsoft 365 Commercial Cloud grew 18% and Dynamics 365 increased 23%.

Intelligent Cloud

• Revenue = $29.9 billion, up 26%

This was driven by Azure (and other cloud services) growth of 39% - continuing the upward trend in percentage growth for Azure which saw it hit over $75 billion for the financial year.

FY25 Results

For the whole 12 months of the financial year, the numbers were:

• Revenue = $281.7 billion, up 15%
• Net Income = $101.8 billion, up 16%

Microsoft Cloud revenue was up 23% to $108 billion - accounting for 38% of overall revenue for the financial year.

1https://www.sankeyart.com/sankeys/public/137406/

Earnings Call info

Some of the parts that caught my eye during the earnings call were:

• Microsoft Fabric “continues to gain momentum, with revenue up 55% year-over-year, and over 25,000 customers”.
  • Fabric is a definite focus for Microsoft and is appearing on the radars of both ITAM and FinOps practitioners that we speak to.
• “Azure Databricks and Snowflake on Azure both accelerated as well”
  • This will be driven, at least in part, by AI adoption and its need for data.
• The “family of Copilot apps has surpassed 100 million monthly active users across commercial and consumer.”
  • Combining commercial & consumer is always an interesting move, making it harder to determine where the usage actually sits.
• “when you take a broader look at the engagement of AI features across our products, we have over 800 million monthly active users.”
  • That’s a great number – but what exactly counts as an “AI feature”? I’d wager things like PowerPoint Designer and Teams transcription are included…both very useful but also both in existence before the billions of dollars that have been spent on AI & Copilots.
• “Another increase in the number of 10-million and 100-million-dollar-plus contracts for both Azure and Microsoft 365”
  • This has been called out for the last few quarters in a row – showing growth and also a likely increase in the push for long-term commitments from customers.
• “with ARPU growth again driven by E5 and M365 Copilot. Paid M365 commercial seats grew 6% year-over-year with installed base expansion across all customer segments, though primarily in our small and medium business and frontline worker offerings.”
  • The all important ARPU (Average Revenue per User) again driven by E5 and M365 Copilot – both big focus products for Microsoft reps when it comes to anniversaries and renewals…as many of you will know! It’s interesting to not that the growth is mainly within the SMB and Frontline worker areas rather than the Enterprise/Knowledge worker segment.

All of you will be contributing to these numbers – and many of you will be paying more than your fair share. 

Whether it’s using E5 when E3 will suffice, over-licensing on Project & Visio Online, over-specced and under-utilised Azure environments, paying for M365 Copilot but not using it, Agents running wild, or any number of other issues – Microsoft have got that cash in the bank rather than your organisation.

If you want to try and re-balance that for your next anniversary or renewal – get in touch!

Microsoft Partner Incentives

As FY 26 begins for Microsoft, its partners, and its customers – they have announced a range of new incentives for their channel. Their recent post states:

“Incentives to fuel growth

We are also significantly increasing our investment across the business:

• Enterprise Customer Investment Funds will grow ~20% year over year (YOY), enabling partners to deliver more AI design wins, migrations, and Copilot deployments.
• In AI Business Solutions, we have increased Copilot funding by 50%, reflecting strong momentum and broadening accessibility across the workforce.
• Microsoft 365 incentives are increasing by double digits.
• Azure outcome-based incentives are up 70% YOY, rewarding partners for expanding workloads, driving seat growth, and deepening solution adoption.
• We are strengthening our CSP incentives with a ~20% YOY increase to reward growth through new customer acquisition, upselling new workloads, and expanding existing relationships. To align our investments with our FY26 growth ambitions, we're pulling forward the effective date of these incentives to July 1. This shift ensures a fast start to the year, enabling partners to accelerate execution, capture opportunity earlier, and drive measurable impact from day one. We're structuring this opportunity to foster a more predictable and profitable environment as partners deliver strategic customer solutions.
• We are also investing 15% more in Security, an increase from a significant investment base, to empower partner-led engagements that protect customers and open new business opportunities.”

As a customer of Microsoft and its reseller partners, consider these as you navigate 2025/2026.

Be aware that these will drive certain behaviours from resellers – particularly now the rebates on EA agreements have been lowered – and prepare your execs and teams for more offers of workshops, Proof of Concepts, chats, demos etc. Make sure that you’re buying things because you need them and will use them…not because someone else wants you to buy them.

Equally – if your reseller is receiving additional rebates/incentives etc. for selling things to you…ask for your share. If your reseller will receive X when you purchase certain products or quantities, then negotiate a percentage of X as a discount on your pricing…or as funding for services etc.

If you'd prefer to watch an outline of the results, then click the image below for a full review from Rich :