- Published on
Microsoft discloses Azure revenue as part of major financial reporting changes
- Authors
- Name
- DeepHorus
Microsoft is overhauling its financial reporting structure to better reflect the transformative impact of artificial intelligence on its business. The tech giant announced it will split its operations into two new segments, replacing the previous three-segment model, starting with its first quarter fiscal 2027 earnings report in late October. A key element of this change is the unprecedented quarterly disclosure of revenue for its Azure cloud platform.
The new structure simplifies Microsoft's reporting into two primary segments: "Agents and Infra" and "Devices and Consumer." This replaces the older segments of Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The move is designed to provide greater transparency into the company's core growth drivers.
The "Devices and Consumer" segment will encompass Xbox, Windows OEM and devices, and search and advertising revenues from LinkedIn and Bing. The "Agents and Infra" segment will house the remainder of Microsoft's portfolio, including Azure, Microsoft 365 Cloud, server products, industry solutions, and enterprise services.
Microsoft CEO Satya Nadella stated that AI represents a "profound shift" changing both technology and business models. He explained that the changes reflect how AI is blurring product boundaries and reshaping how the company operates. The revised reporting aims to offer investors a clearer view of these evolving dynamics.
A significant development is that Azure's quarterly revenue will now be broken out distinctly. Previously, Microsoft only provided year-over-year growth rates for Azure. The newly reported Azure revenue will focus purely on its consumption-based platform and infrastructure services, excluding GitHub cloud, Security Copilot, and healthcare cloud revenues.
Nadella emphasized that under this structure, investors will get "full transparency" on quarterly revenue for key businesses like Azure, Microsoft 365 Cloud, and ads. This move is anticipated to provide a more granular and accurate picture of the company's performance in the AI era.
The financial reporting changes will take effect during Microsoft's fiscal year 2027, beginning with its Q1 earnings report scheduled for late October. Analysts and investors are expected to closely scrutinize the new disclosures for insights into the standalone performance of Azure and the overall health of Microsoft's AI-driven segments.
