Microsoft is overhauling its financial reporting. Starting in the new fiscal year, it will disclose Azure’s actual revenue on a quarterly basis for the first time. At the same time, Microsoft is organizing its operations into two new main segments.
Until now, Microsoft has primarily published growth rates for Azure. Amazon, on the other hand, has been reporting AWS revenue separately since 2015. Alphabet has been doing the same for Google Cloud since 2020, although that figure also includes Workspace services.
CNBC notes that the new reporting structure highlights just how large Azure has become. In the quarter ending in June, revenue according to the adjusted figures totaled $29.42 billion, up 42 percent from a year earlier. This meant Azure accounted for nearly one-third of Microsoft’s total revenue. For the current quarter, Microsoft expects growth of 44 to 45 percent at constant exchange rates.
Azure’s scope narrowed
At the same time, Microsoft is changing the definition of Azure. Among other things, GitHub cloud services, developer services, Security Copilot, and cloud products for healthcare and life sciences are no longer included in the count.
According to CEO Satya Nadella (photo), this change is intended to ensure that Azure more clearly represents usage-based platform and infrastructure activities. The previous category, “Azure and other cloud services,” was broader. This does not yet make a significant difference to the recent growth figures: under the old metric, growth was 43 percent, compared to 42 percent under the new definition.
The new classification is also relevant in Europe. The European Commission is investigating whether Azure and AWS should be designated as gatekeepers under the Digital Markets Act. In June, Brussels tentatively concluded that both cloud services qualify for that designation, TNW reports. A final decision is expected later this year. Microsoft itself does not link that investigation to the change in reporting.
Microsoft opts for “Agents and Infra”
The rest of the financial classification is also changing. The three existing segments are being replaced by “Agents and Infra” and “Devices and Consumer.”
In addition to Azure, Agents and Infra includes Microsoft 365 cloud products, productivity and server licenses, and enterprise AI products. Microsoft could, for example, place the development of Microsoft 365 Copilot and GitHub Copilot under this segment. In July, the company reported more than 30 million paid Microsoft 365 Copilot seats, up from over 20 million in April.
Devices and Consumer includes, among other things, Windows licenses to PC manufacturers, devices, Xbox, and revenue from search engines and advertising. Nadella links the new structure to AI, which he says is blurring the lines between Microsoft’s existing products and business models.
For the coming quarter, Microsoft expects revenue from Agents and Infra to range between $75.15 billion and $75.75 billion. Devices and Consumer is expected to generate between $14.7 billion and $15.2 billion.
Microsoft has also restated two years of historical figures according to the new structure. The total revenue forecast remains unchanged. However, the company will no longer report costs and operating margins for the three former segments separately.
The new reporting structure makes it particularly clear just how large Azure has become as a standalone cloud platform. This is becoming more relevant now that cloud infrastructure plays a central role in AI. Analysts at Stifel previously estimated that approximately half of Azure’s revenue growth in fiscal year 2026 came from OpenAI.