Microsoft
MSFTQ3 2025(MSFT Q4 FY2025)Stated6.4% AI
AI Revenue %
6.4%
AI Fair Value
$187.0B
AI Revenue (Q)
$5.2B
Total Revenue (Q)
$81.3B
Source: SEC EDGAR 10-K Filing
View 10-K on SEC.govAnalysis
The FY2025 10-K confirms Microsoft Cloud revenue grew 23% to $168.9 billion for the full fiscal year, with Azure and other cloud services revenue growing 34%. Management indicated on the July 2025 earnings call that the AI business annual run rate was approaching $20 billion by fiscal year end. Being conservative, I use $19B as the stated figure (approaching but not yet at $20B). Quarterly Ring 1 AI revenue = $19B / 4 = $4.75B. Q4 FY2025 quarterly revenue is derived: FY2025 total estimated at ~$280B (based on H1 FY2025 = $135.2B plus accelerating H2 growth), minus H1 ($135.2B) minus Q3 ($70.1B) = ~$74.7B for Q4. Ring 1 Core AI: Azure OpenAI Service, Azure AI compute, GitHub Copilot, Microsoft 365 Copilot. The stated run rate captures the exit velocity of the quarter, so dividing by 4 is conservative as it averages over periods when the run rate was lower. Math: $4,750M / $74,717M = 6.36%, rounded to 6.4%.
Analyzed by claude-opus-4-6
Quoted Figures
Microsoft Cloud revenue increased 23% to $168.9 billion
Q4 FY2025 10-K MD&A, Highlights section
Server products and cloud services revenue increased 23% driven by Azure and other cloud services revenue growth of 34%
Q4 FY2025 10-K MD&A, Highlights section
Azure and other cloud services, comprising cloud and AI consumption-based services, GitHub cloud services, Nuance Healthcare cloud services, virtual desktop offerings, and other cloud services
Q4 FY2025 10-K, Item 1 Business, Intelligent Cloud segment description
The OpenAI API is exclusive to Azure, runs on Azure, and is available through the Azure OpenAI Service
Q4 FY2025 10-K MD&A, Industry Trends and Opportunities
Confidence Tier
StatedAI figures cited by management on earnings calls