Microsoft recently updated its business unit operating results reports with some shifts in product groups. This also affects expectations for the first quarter of Microsoft’s fiscal year 2025.
The announced adjustments now mean that certain search and news advertising revenues will fall under the Azure business unit, Reuters writes. Revenues from the Nuance division’s AI and voice technology services, for example, will now fall under the productivity unit, along with Office, for example. Previously, this portfolio was part of the Intelligent Cloud division.
According to Microsoft, these adjustments are in line with recent organizational changes within the tech giant. Ultimately, this should give investors a clearer picture of to what extent AI contributes to revenue, it is hoped.
Impact on new quarterly figures
The new reporting adjustments also have an immediate effect on expectations for the first quarter of fiscal 2025. Microsoft is currently the only Big Tech company to report contributions from AI in its reports.
Just last month, Microsoft reported that AI is providing a bigger boost to Azure, even with stagnant overall revenue.
Mainly revenue declines
For the first quarter of fiscal 2025, Microsoft expects revenue from Intelligent Cloud to be between $23.80 billion and $24.10 billion. This is down from the previously expected revenue of between $28.6 billion and $28.9 billion.
The PC segment expects sales of between $12.25 billion and $12.65 billion for the period. Here, too, expectations were previously higher with sales of between $14.9 and $15.3 billion. So the reason for this is the move of some business units to the productivity division.
Revenue from the productivity division and business process activities is now estimated at between $27.75 billion and $28.05 billion. This is now considerably higher than the previously expected revenue of $20.3 and $20.6 billion.
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