Microsoft announced it will begin reporting quarterly revenue for its Azure cloud business, a move that enhances transparency for investors as the company restructures its reporting segments from three to two. This change, effective immediately, follows a reporting model that had been in place since 2015.
Azure has seen substantial growth, particularly due to the rising demand for artificial intelligence capabilities, with analysts estimating that around half of Azure's revenue growth in fiscal 2026 is linked to OpenAI. CEO Satya Nadella emphasized the transformative impact of AI on technology and business operations, indicating that it is reshaping Microsoft's offerings.
The new reporting will exclude certain services like GitHub and healthcare products, allowing Azure's revenue to be more reflective of its core cloud infrastructure business. In the latest quarter, Azure revenue grew 42% to $20.71 billion, slightly down from a 43% growth rate under the previous metric.
Microsoft's new segments will focus on Agents and Infra, which includes Azure and Microsoft 365 products, and Devices and Consumer, which encompasses Xbox and advertising revenue. This strategic shift aims to highlight the momentum in AI-driven products, such as the Microsoft 365 Copilot, which has seen a significant increase in paid users.
Additionally, Microsoft will provide adjusted financial results for the past two years but will no longer disclose costs and operating margins for the previous segments