Microsoft discloses Azure revenue in major reporting changes
Microsoft is restructuring its financial reporting into two main segments and disclosing quarterly Azure revenue for the first time, starting in October 2026.
Stock photo for illustration only, not from the actual event
- Microsoft is restructuring its financial reporting into two main segments: Agents and Infra, and Devices and Consumer.
- The company will disclose quarterly revenue for its Azure cloud business for the first time.
- These changes reflect the ongoing impact and transformation driven by artificial intelligence across its operations.
- The new reporting structure will debut during the company's first-quarter fiscal 2027 earnings in late October.
Microsoft is overhauling how it reports its financial performance to investors by consolidating its business units into two distinct segments and disclosing quarterly revenue for its Azure cloud computing business for the first time. The strategic shift is designed to better reflect the profound impact of artificial intelligence on the company's operations and business models.
Previously, the software giant reported its revenues across three separate segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Under the new framework, these categories are being simplified into just two segments: Agents and Infra, and Devices and Consumer.
The Devices and Consumer segment will house search and advertising revenues from LinkedIn and search advertising, alongside the Xbox division, Windows OEM, and hardware devices. Meanwhile, the Agents and Infra segment will encompass the remainder of Microsoft's operations, including Azure, Microsoft 365 for both commercial and consumer markets, server products, industry solutions, and enterprise support services.
“There’s no question AI represents a profound shift in both technology and business.”
Satya Nadella, CEO of Microsoft
Stock photo for illustration only, not from the actual event
Microsoft CEO Satya Nadella noted that artificial intelligence is fundamentally transforming what the company builds, how it operates, blurring product boundaries, and reshaping overall business models. The reporting updates are structured to align directly with this evolution.
Disclosing quarterly revenue for Azure marks a critical milestone for investors who closely monitor cloud and AI adoption as primary growth drivers. By isolating Azure into a consumption-based platform and infrastructure business, Microsoft provides stakeholders with greater transparency into the direct financial returns generated by its cloud and AI investments.
The most notable modification in this reporting layout is the official disclosure of quarterly financial figures for Azure. Although Microsoft previously shared year-over-year growth rates, quarterly revenue reporting for the cloud unit is a new step. Notably, Azure revenue will exclude GitHub cloud, other developer cloud services, Security Copilot, and Healthcare and Life Sciences cloud revenues under this setup.
“Under this reporting structure, Azure becomes more purely our consumption-based platform and infrastructure business,” Nadella stated. “Within each of these segments, you will have full transparency of quarterly revenue across each of our key businesses, including Azure, M365 Cloud, industry solutions, and ads.”
Microsoft will officially implement these financial reporting changes beginning with its first-quarter fiscal 2027 earnings announcement in late October.
Source: The Verge
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