Microsoft overhauls financial reporting, will disclose Azure revenue quarterly

Microsoft previously reported revenue from three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. It is now simplifying to two: Agents and Infra, and Devices and Consumer.

Devices and Consumer will include search and advertising revenues from LinkedIn and search advertising, as well as revenue from the Xbox division and Windows OEM and devices. Agents and Infra is essentially the rest of Microsoft, including Azure, Microsoft 365 Cloud, Microsoft 365 commercial and consumer, server products, industry solutions, and the enterprise and partner services that Microsoft now calls frontier and support services.

There's no question AI represents a profound shift in both technology and business, Microsoft CEO Satya Nadella said in explaining the changes. It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models, he added.

The biggest change to the reporting structure will see Microsoft finally disclose how its Azure business is running on a quarterly basis. Microsoft has been providing year-over-year growth rates for its Azure business and reported its Azure revenue for the first time last year. Under the new structure, Azure revenue will no longer include GitHub cloud and other developer cloud services, nor Security Copilot and Healthcare and Life Sciences cloud revenues.

Under this reporting structure, Azure becomes more purely our consumption-based platform and infrastructure business, Nadella said. 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 start using its new financial reporting format during its first quarter fiscal 2027 earnings in late October.