Microsoft will start disclosing quarterly revenue for its Azure cloud business for the first time, providing investors with a clearer picture of its business that competes with Amazon Web Services and Google's cloud platform.
The change, announced in a presentation on Wednesday, is part of a broader shift in Microsoft's reporting structure, as the company trims its operating segments from three to two. The prior structure had been in place since 2015.
Microsoft's Azure unit has been a major beneficiary of the artificial intelligence boom, as customers turn to major cloud infrastructure platforms for access to the AI models needed to develop new agents and other tools. Analysts at Stifel estimated in July that about half of Azure's revenue growth in the 2026 fiscal year came from OpenAI, while Anthropic has also become more reliant on Microsoft's cloud.
"There's no question Al represents a profound shift in both technology and business," CEO Satya Nadella wrote in the presentation. "It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models."
Amazon began disclosing revenue from AWS, the market leader, in 2015. Alphabet, which ranks third in cloud, started providing total revenue from Google Cloud Platform and Workspace productivity subscriptions in 2020.
Microsoft, by contrast, has only been providing the year-over-year growth rate for Azure, and started offering actual sales on an annual basis dating back to last year.
Another big change to Azure is that it will exclude GitHub cloud services, developer cloud services, the Security Copilot assistant and healthcare and life sciences cloud products, according to the presentation. In 2021, the company started announcing growth from Azure and other cloud services, later lumping in some revenue from the GitHub and Nuance Communications acquisitions.
"Under this reporting structure, Azure becomes more purely our consumption-based platform and infrastructure business," Nadella wrote in the deck.
Going forward, Microsoft's two segments will be Agents and Infra, and Devices and Consumer.
The first will include Azure and Microsoft 365 cloud products, as well as productivity and server licensing, industry solutions and frontier and support services. The latter will comprise search and advertising, Xbox, and revenue from sales of devices and Windows operating system licenses to device makers.
Inside Agents and Infra, Microsoft will be able to showcase momentum from a series of AI assistants, including the Microsoft 365 Copilot for commercial customers and the GitHub Copilot coding agent. Microsoft said in July that it had over 30 million paid seats for the 365 Copilot, up from more than 20 million as of April.
Microsoft is also providing two years of recast financial results and adjusted guidance, but will stop showing costs and operating margins for the three old segments.
With the new structure, Azure revenue grew 42% to $29.42 billion in the June quarter, compared with 43% using the old Azure and other cloud services metric. That means Azure represented almost 33% of Microsoft's total revenue in the latest period.
Management said fiscal first-quarter Azure revenue should grow 44% to 45% at constant currency. In July the company called for 45% growth at constant currency for Azure and other cloud services.
Microsoft is targeting $75.15 billion to $75.75 billion in Agents and Infra revenue, with $14.7 billion to $15.2 billion in Devices and Consumer revenue. There are no changes to the outlook for overall revenue, cost of revenue or operating expenses.
WATCH: BofA's Liani on Microsoft upgrade: Investors are underestimating how it is differentiating in AI
