Microsoft's news ad revenue sees 18% rise, revenue up 16% in Q1 2025

Technology giant Microsoft has announced its Quarter 1 earnings for the fiscal year 2025. The Redmond, Washington-based company registered strong financials in Q1, with a 16% increase in revenue to $65.6 billion in the March quarter.

Microsoft reported a profit of $3.46 per share in the same period. Its operating income surged to $30.6 billion, up 14% in Q1 2025.

Notably, the search and news advertising revenue, excluding traffic acquisition costs of the technology conglomerate, increased 18% in the same period. The company said its LinkedIn revenue also witnessed 10% growth.

"Total advertising revenue across our businesses has surpassed $20,000,000,000 over the past twelve months," Microsoft mentioned.

Microsoft Chief Executive Officer Satya Nadella attributed the growth to AI-driven transformation across all channels.

According to the CEO, "AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process".

Further, Microsoft's Executive Vice President Amy Hood lauded the sales teams and partners and said, "Strong executions delivered a solid start to our fiscal year with Microsoft Cloud revenue of $38.9 billion, up 22% year-over-year".

Further, Microsoft 365 Commercial products and cloud services revenue increased 13%, while the Consumer products and cloud services revenue gained 5%. Windows OEM and devices revenue increased by 2%, and the Xbox content and services revenue surged by 61%, fuelled by 53 points of net impact from the Activision acquisition.

For the upcoming quarters, Nadella has projected continued growth in both volume and revenue per search with share gains across Edge and Bing platforms. "Overall search and news advertising revenue growth should be in the mid-teens," he added.