Microsoft Corp (NASDAQ:MSFT) shares surged more than 7% on Wednesday postmarket after the tech giant posted better-than-expected fiscal third-quarter results, driven by accelerating demand for its cloud and AI services and a record-breaking performance in gaming revenue.
The company reported revenue of $70 billion for the quarter ended March 31, up 13% from a year earlier and above analysts’ expectations of $68.4 billion, according to LSEG data.
Earnings per share rose nearly 18% year-over-year to $3.46, also topping estimates of $3.22.
Azure and other cloud services revenue climbed 33%, outpacing analyst expectations of 31% growth and underscoring Microsoft’s momentum in the enterprise AI space.
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” CEO Satya Nadella said in a statement. “From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.
Gaming revenue rose 5% year-over-year in the quarter, totaling an estimated $5.72 billion — the highest ever for a third fiscal quarter. The increase was fueled by an 8% jump in Xbox content and services revenue, supported by strong engagement with Game Pass and popular titles like Call of Duty and Minecraft. However, Xbox hardware sales declined 5% during the period.
Microsoft's More Personal Computing segment, which includes Xbox, saw a 21% rise in operating income from a year ago.