Microsoft disclosed on Wednesday that it will start reporting Azure’s quarterly revenue for the first time, moving beyond the year‑over‑year growth percentages it has provided in the past. The change is part of a broader restructuring that reduces the company’s operating segments from three to two, a format that has been in place since 2015.
Why Azure Revenue Gets Separate Disclosure
Azure has become a key growth engine for Microsoft, especially as the artificial‑intelligence boom drives customers to major cloud platforms for access to large AI models. Analysts at Stifel estimated in July that roughly half of Azure’s revenue growth in the fiscal year 2026 was attributable to OpenAI, while the Anthropic partnership also deepened reliance on Microsoft’s cloud infrastructure.
CEO Satya Nadella emphasized the strategic importance of AI in the presentation, stating, “There’s no question AI represents a profound shift in both technology and business. It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models.”
Historically, Microsoft has only disclosed Azure’s year‑over‑year growth and began offering annual sales figures last year. Competitors have been more transparent for longer; Amazon started reporting AWS revenue in 2015, and Alphabet began providing total Google Cloud Platform and Workspace revenue in 2020.
Scope of the New Azure Metric
The revised Azure reporting will exclude several services that were previously bundled with cloud revenue, including GitHub cloud services, developer cloud services, the Security Copilot assistant, and healthcare and life‑sciences cloud products. Microsoft first started announcing growth from Azure and other cloud services in 2021, later incorporating revenue from the GitHub and Nuance Communications acquisitions.
Nadella wrote in the deck, “Under this reporting structure, Azure becomes more purely our consumption‑based platform and infrastructure business,” underscoring the intention to present Azure as a distinct, usage‑driven segment.
New Operating Segments and Financial Outlook
Going forward, Microsoft will organize its business into two segments: Agents and Infra, and Devices and Consumer. The Agents and Infra segment will house Azure, Microsoft 365 cloud products, productivity and server licensing, industry solutions, and frontier and support services. Devices and Consumer will cover search and advertising, Xbox, device sales, and Windows operating‑system licenses sold to device manufacturers.
Within the Agents and Infra segment, Microsoft expects to showcase momentum from AI assistants such as Microsoft 365 Copilot for commercial customers and GitHub Copilot. In July, the company reported more than 30 million paid seats for the 365 Copilot, up from over 20 million in April.
The company also announced that it will provide two years of recast financial results and adjusted guidance, while ceasing to display costs and operating margins for the three legacy segments.
In the most recent quarter ending in June, Azure revenue rose 42 percent to $29.42 billion, representing roughly 33 percent of Microsoft’s total revenue. This growth rate is only slightly lower than the 43 percent figure calculated under the older Azure‑and‑other‑cloud‑services metric.
Management projects fiscal first‑quarter Azure revenue to increase 44 percent to 45 percent on a constant‑currency basis. The company had previously called for 45 percent growth at constant currency for Azure and other cloud services in July.
Microsoft’s revenue targets under the new structure are $75.15 billion to $75.75 billion for Agents and Infra, and $14.7 billion to $15.2 billion for Devices and Consumer. The outlook for overall revenue, cost of revenue, and operating expenses remains unchanged.
Mitchell Landsberg is a Senior Technology Correspondent at News Raise. He covers consumer electronics, artificial intelligence, software developments, and digital privacy trends.
