Microsoft Cloud Revenue Hits $22.1B in 2025, Outpaces Expectations; Alphabet’s 2025 Ad Revenue Declines Amid $70B Buyback
Discover how Microsoft’s cloud segment soared past forecasts with $22.1 billion revenue in 2025, while Alphabet faced a dip in ad revenue despite launching a $70 billion stock buyback program.
Shares of Microsoft Corporation (MSFT) and Alphabet Inc. (GOOG, GOOGL) surged in after-hours trading as Microsoft exceeded expectations in its cloud computing growth, while Alphabet reported a drop in advertising revenue but announced a substantial share repurchase plan.
Highlights
- Microsoft posted earnings per share (EPS) of $2.45, surpassing the anticipated $2.24.
- Alphabet showed strong cloud momentum, yet YouTube ad revenue declined again.
- No new job cuts were announced; however, Alphabet recorded a $2 billion charge related to previous layoffs.
Microsoft, headquartered in Redmond, Washington, saw its shares climb 5% after reporting EPS of $2.45, beating analysts’ estimates of $2.24. This success was largely driven by its cloud computing division, which generated $22.1 billion in revenue, outperforming the expected $21.9 billion.
Alphabet, Google’s parent company, exceeded revenue forecasts with $69.8 billion and posted a profit of $15.1 billion. Despite this, advertising revenue fell 5% to $40.4 billion, with YouTube ad sales dropping to $6.69 billion from $6.86 billion year-over-year. The stock rose 3.7% following the board’s approval of a $70 billion stock buyback initiative.
While concerns about additional tech layoffs lingered, neither Microsoft nor Alphabet announced further job cuts. Alphabet disclosed $2 billion in first-quarter expenses tied to severance and related costs after cutting 12,000 jobs in January. The company also incurred $564 million in charges for downsizing office space and indicated potential future evaluations of workspace needs.
Microsoft’s latest earnings report marked the first post-launch of its AI-enhanced Bing search engine powered by ChatGPT. The company noted a 10% increase in search and news advertising revenue compared to the previous quarter. However, this growth was offset by a decline in its More Personal Computing segment, where revenue fell to $13.26 billion from $14.58 billion the prior year.
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