Microsoft discloses Azure revenue as part of major financial reporting changes
Microsoft is overhauling how it reports financial results to investors, splitting its business into two new segments and, for the first time, disclosing quarterly revenue for its Azure cloud platform. The change reflects how deeply artificial intelligence has reshaped Microsoft's operations, according to chief executive Satya Nadella, who said AI is "blurring the boundaries" between the company's products and business models. Investors have long sought clearer visibility into Azure's performance, which Microsoft has historically only disclosed as a year-over-year growth percentage rather than a hard revenue figure.
The three existing segments — Productivity and Business Processes, Intelligent Cloud, and More Personal Computing — will be replaced by two: "Agents and Infra" and "Devices and Consumer". The former covers Azure, Microsoft 365 Cloud, server products, industry solutions and enterprise services, while the latter covers LinkedIn, search advertising, Xbox and Windows OEM revenue. Under the new structure, Azure's reported revenue will exclude GitHub cloud services, Security Copilot and Healthcare and Life Sciences cloud revenue, making it a purer measure of Microsoft's consumption-based infrastructure business. The changes take effect from Microsoft's first-quarter fiscal 2027 earnings report, due in late October.
In short
- Microsoft will report Azure's quarterly revenue for the first time
- Business segments cut from three to two, reflecting AI's impact
- New reporting structure begins with fiscal Q1 2027 earnings in October
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The case for
The new reporting structure could give investors a clearer view of Azure’s revenue and how Microsoft’s AI-focused businesses fit together, addressing longstanding requests for more detailed disclosure. Grouping products around the way the company says AI is reshaping its operations may also make its results easier to interpret.
The case against
The shift may make comparisons with earlier results harder, while combining several businesses in new segments could obscure how individual products are performing. Azure’s newly disclosed revenue also excludes some cloud services, so investors may still lack a complete picture of Microsoft’s cloud activity and may question whether the revised categories offer more clarity overall.
Explained simply
Microsoft is a technology company with businesses in cloud computing, software, online services, gaming and devices. Azure is its cloud platform, which lets organisations rent computing power and software over the internet; Microsoft 365 Cloud provides online versions of familiar work tools.
Investors use Microsoft’s financial reports to see how its different businesses are performing. Until now, the company has reported Azure’s growth as a percentage rather than giving its quarterly revenue, and grouped its activities into three broad segments. Artificial intelligence has become part of many products and services, making the boundaries between those businesses less clear.
Azure’s revenue is of interest because cloud computing is a major part of Microsoft’s business, and a separate figure can help investors assess its scale. The way Microsoft groups its other products also affects how investors compare performance over time.
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