Microsoft will start disclosing Azure's quarterly revenue in dollars for the first time, as it collapses its three operating segments into two. The shift, announced Wednesday, gives investors a clearer view of the cloud unit that competes with Amazon Web Services and Google Cloud.
Microsoft will begin reporting Azure's quarterly revenue in dollars for the first time. The company disclosed the change in a presentation issued Wednesday, replacing a structure that had been in place since 2015.
Segments shrink from three to two
Microsoft is trimming its operating segments from three to two: Agents and Infra, and Devices and Consumer. The first will include Azure, Microsoft 365 cloud products, productivity and server licensing, industry solutions, and frontier and support services. The second will cover search and advertising, Xbox, and device and Windows licensing revenue.
Under the new structure, Azure will exclude GitHub cloud services, developer cloud services, the Security Copilot assistant, and healthcare and life sciences cloud products. CEO Satya Nadella wrote in the presentation: "Under this reporting structure, Azure becomes more purely our consumption-based platform and infrastructure business."
Azure revenue and guidance under the new metric
With the new structure applied retroactively, Azure revenue grew 42% to $29.42 billion in the June quarter, compared with 43% growth under the old Azure and other cloud services metric. That put Azure at almost 33% of Microsoft's total revenue in the period.
Management said fiscal first-quarter Azure revenue should grow 44% to 45% at constant currency, compared with the 45% growth it had called for Azure and other cloud services in July. Microsoft is targeting $75.15 billion to $75.75 billion in Agents and Infra revenue, and $14.7 billion to $15.2 billion in Devices and Consumer revenue, with no changes to its outlook for overall revenue, cost of revenue, or operating expenses.
Microsoft is also providing two years of recast financial results, but it will stop showing costs and operating margins for the three old segments. Amazon started disclosing AWS revenue in 2015, while Alphabet began providing combined Google Cloud and Workspace revenue in 2020.
AI demand keeps showing up in the numbers
Azure has been a major beneficiary of AI demand, as customers turn to cloud infrastructure for the models behind new agents and other tools. Analysts at Stifel estimated in July that about half of Azure's revenue growth in fiscal 2026 came from OpenAI, while Anthropic has also become more reliant on Microsoft's cloud.
The new Agents and Infra segment will also showcase Microsoft's AI assistant momentum. The company said in July it had over 30 million paid seats for Microsoft 365 Copilot, up from more than 20 million as of April.
Source: US Top News and Analysis
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