Microsoft Earnings FY25 Q3 - M365 Highlights
Microsoft reported its Q3 FY25 earnings this week. Revenue was $70.1 billion USD, exceeding expectations.
Microsoft Cloud – Azure, M365 commercial, Dynamics 365, etc. — delivered $42.4 billion USD in revenue, up 20%.
Microsoft announced 430 million paid commercial Microsoft 365/Office 365 seats (up from 400 million in Q2 FY24), up 7% year over year. M365 commercial cloud revenue increased 12%.
E5 and M365 Copilot drove M365 ARPU growth. Small and medium businesses and frontline worker offerings primarily drove seat growth. This might be an opportunity for Teams Phone with the special reduced-cost Front Line SKU.
We got no new numbers related to Microsoft Teams. Power Platform now has 56 million monthly active users, up 27% annually.
Copilot was mentioned 26 times on the call (across all products), but no absolute user numbers were given. When talking about Microsoft 365 Copilot, it was said, "Hundreds of thousands of customers across geographies and industries now use Copilot, up 3X year-over-year." That's still relatively small, and I wonder if it includes the free Microsoft 365 Copilot Chat, which all 430M M/O365 users can access.
There are now 15 million GitHub Copilot users, up more than fourfold year over year. It's worth noting that GitHub Copilot now includes a free tier.
Microsoft Teams News
Matthew Carlson, Cloud Solutions Architect at Microsoft, has done a nice write-up on native SMS in Teams Phone. Everyone I talk to seems to be waiting on TCR Brand approval. If you have it working, please let me know!
The video clips in Teams recording time limit is increasing from 1 minute to 5 minutes (MC1066938)
Starting July 1st, 2025, classic Teams will no longer sign in. Most users should be automatically upgraded to new Teams now, but check your tenant's Message Center to see if you got the message MC1066333. If you did, some users on your tenant still use classic Teams, and you need to migrate them.
And another reason to always follow your tenant message center. MC1066157 - Android Open Source Project (AOSP) Teams device auto updates are starting May 15th, but you are on the newsletter, so I'm sure you are already aware. Be sure your Intune is configured!
Someone at the Microsoft UC User Group London asked what content would trigger the new screen sharing sensitive content detection in Microsoft Teams meetings. I found the answer here.
Two exciting new additions to the roadmap that will be useful for admins: Remote log collection in Teams admin center (June 491439) and Silent Test Call, proactively run synthetic Teams call simulations to specific subnets from the Teams client (June 490055).
It's T-6 months until Skype for Business Server 2015 and Skype for Business Server 2019 go End of Support. It's time to move to Microsoft Teams, or for those who need it, Skype for Business Server SE (Subscription Edition).
Copilot Wave 2 "Spring Release" and new Work Trend Index
Microsoft 365 Copilot Wave 2 "Spring Release" announced a set of updates coming to Microsoft 365 Copilot
The main announcement was an updated Microsoft 365 Copilot app "designed to power the next era of human-agent collaboration". Driven by more advanced models, adaptive memory, and reasoning agents that work alongside you. 2-minute tour of the new Microsoft 365 Copilot App here.
There were five other announcements:
- AI-powered Search to help you find information faster at work.
- A new Create experience. The premise is to start creating in Copilot and let the AI guide you, rather than starting from Word or PowerPoint.
- Copilot Notebooks to turn your content and data into instant insights and action.
- A new Agent Store to easily find and access agents right in the "flow of work".
- The Copilot Control System (CCS): Admins and security professionals start solving the challenges of cost management, security, governance, and lifecycle management. Video overview here.
Microsoft also released the latest Work Trend Index. As you might expect, it is very heavy on AI Agents being the future of work. It proposes that there is a new type of organisation, the "Frontier Firm", that looks markedly different from those we know today. Structured around on-demand intelligence and powered by “hybrid” teams of humans + agents.