Microsoft Reveals $101.9 Billion Azure Revenue as AI Reshapes Financial Reporting Structure

Microsoft discloses Azure revenue as part of major financial reporting changes

Microsoft is changing how it reports its finances to investors by splitting its businesses into two segments and disclosing quarterly revenue for its Azure cloud business for the first time. The changes are meant to reflect the ongoing impact of AI on Microsoft and how the company now operates. The software giant has previously reported revenue from three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. This is now simplifying to two: Agents and Infra, and Devices and Consumer. Devices and Consumer will include search and advertising revenues from LinkedIn and search advertising, as well as revenue from the Xbox division and Windows OEM and devices. Agents and Infra is essentially the rest of Microsoft, including Azure, Microsoft 365 Cloud, Microsoft 365 commercial and consumer, server products, industry solutions, and the enterprise and partner services that Microsoft now calls frontier and support services. "There's no question AI represents a profound shift in both technology and business," says Microsoft CEO Satya Nadella. "It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models." The biggest change to this reporting structure will see Microsoft finally disclose how its Azure business is running on a quarterly basis. Microsoft has been providing year-over-year growth rates for its Azure business, reporting its Azure revenue for the first time last year. Azure revenue will no longer include GitHub cloud and other developer cloud services, nor Security Copilot and Healthcare and Life Sciences cloud revenues. "Under this reporting structure, Azure becomes more purely our consumption-based platform and infrastructure business," says Nadella. "Within each of these segments, you will have full transparency of quarterly revenue across each of our key businesses, including Azure, M365 Cloud, industry solutions, and ads." Microsoft will start using these new financial reporting changes during its first quarter fiscal 2027 earnings in late October.

Microsoft to start disclosing Azure quarterly revenue as company consolidates business units

* Microsoft will begin reporting Azure revenue in dollars for the first time, providing more clarity about its business that competes with Amazon Web Services. * The company is trimming the number of internal operating segments from three to two. * "Under this reporting structure, Azure becomes more purely our consumption-based platform and infrastructure business," CEO Satya Nadella wrote in a presentation. In this article * GOOGL * OPENAI.FG * ANTHR.FG * MSFT Follow your favorite stocksCREATE FREE ACCOUNT Microsoft CEO Satya Nadella speaks at the Microsoft AI Tour in Sydney on April 23, 2026. George Chan | Getty Images News | Getty Images 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. watch now VIDEO4:3704:37 Analyst on hyperscalers' earnings potential Squawk Box Asia 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. watch now VIDEO2:4702:47 BofA's Liani on Microsoft upgrade: Investors are underestimating how it is differentiating in AI Power Lunch Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Microsoft shares rise after Azure sales disclosure; AI cloud growth in focus

Microsoft has disclosed Azure's quarterly and annual revenue for the first time, giving investors a clearer view of its position against Amazon Web Services and Google Cloud amid rising AI infrastructure demand. Azure reported $29.4 billion in quarterly sales and $101.9 billion for fiscal 2026, while Microsoft also unveiled a new two-segment reporting structure. Microsoft on Wednesday disclosed quarterly and annual sales for its Azure cloud computing business for the first time, giving investors a clearer comparison with rivals Amazon.com and Alphabet's Google as the companies compete to meet surging demand for artificial intelligence infrastructure. Azure generated $29.4 billion in sales in Microsoft's latest quarter and $101.9 billion in the fiscal year ended June 30, the company said. That puts Microsoft behind Amazon Web Services, which reported quarterly cloud sales of $42.2 billion, but ahead of Google Cloud, which posted $24.8 billion in quarterly revenue. US MarketsPowered By As on 03 Sep 2026, 01:30 AM IST S&P 500 Top Gainers Dell Technologies492.20(15.81%) Charter Communications158.97(8.74%) Skyworks Solutions71.67(6.32%) Block82.46(5.88%) Gainers" S&P 500 Top Losers Palo Alto Networks328.48(-9.28%) Coterra Energy32.56(-8.62%) Datadog209.23(-6.53%) Edison Intl55.19(-6.14%) Losers" Reuters reported that Microsoft had previously disclosed Azure's growth rate but had not provided its revenue separately, making direct comparisons with its largest cloud rivals more difficult. The company also announced changes to its reporting structure, moving from three business segments to two. The new "Agents and Infra" segment will include cloud services, AI-related software and traditional business software, while "Devices and Consumer" will cover Windows, Xbox and advertising revenue from Bing and LinkedIn. Microsoft said the restructuring reflects the growing impact of artificial intelligence across its products and business operations. The company also revised its Azure revenue forecast for the current quarter slightly lower than the outlook provided last month. Microsoft said the adjustment was primarily due to the reclassification of some GitHub sales, which had previously been included with Azure and will now be reported alongside its M365 Cloud software business, Reuters reported. The broader outlook for the current quarter remained unchanged. Microsoft is a major cloud provider to OpenAI. The relationship has expanded beyond Microsoft's infrastructure as changes to their agreement have allowed OpenAI to work with Amazon Web Services and other providers. For calendar 2025, AWS recorded $128.7 billion in sales, while Microsoft Azure generated $85.8 billion over the comparable four-quarter period. Google has not disclosed full-year cloud revenue. Microsoft shares gained about 1.4% in after-hours trading on Wednesday following the announcement. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of The Economic Times.)

Microsoft Azure: Microsoft reveals Azure cloud sales in financial reporting shift

Microsoft said that Azure had $29.4 billion in sales in its most recently ended quarter and $101.9 billion in sales in its most ⁠recent ⁠fiscal year ended June 30. The figures place Microsoft behind Amazon, whose cloud sales were $42.2 billion in its most recent quarter, but ahead of Google, which reported $24.8 billion in cloud sales in its most recent quarter. Microsoft on Wednesday reported sales from its Azure cloud computing unit on a quarterly basis for the first time, providing a direct comparison to its top rivals Amazon.com and Alphabet's Google as the three compete in the computing market amid an AI data center boom. Microsoft said that Azure had $29.4 billion in sales in its most recently ended quarter and $101.9 billion in sales in its most ⁠recent ⁠fiscal year ended June 30. The figures place Microsoft behind Amazon, whose cloud sales were $42.2 billion in its most recent quarter, but ahead of Google, which reported $24.8 billion in cloud sales in its most recent quarter. Microsoft previously reported a closely watched growth rate for Azure but not its sales. Microsoft will move from three reporting segments to two: one called "Agents and Infra" that will include its cloud computing services, its sales from AI-based software ⁠and its revenue from more traditional business software, and one called "Devices and Consumer" that will include its Windows operating system, its Xbox gaming unit and its advertising ⁠sales across both its Bing search engine and LinkedIn, the business-focused social network. "There's no question AI represents a profound shift in both technology and business," Microsoft CEO Satya Nadella said in a statement accompanying the change. "It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models." Microsoft also updated the quarterly forecast it gave investors last month, slightly lowering it its Azure revenue forecast, but said the changes reflected the move of some sales from GitHub, its code-hosting service, which were previously grouped with Azure, to grouping those with its M365 Cloud software businesses, which includes most of ⁠its advanced AI offerings. Microsoft's overall current quarter outlook remains unchanged, the company said. Microsoft is a major cloud computing provider to OpenAI, which exclusively used Microsoft for training its models until changes in the terms of its deal allowed it to work with Amazon Web Services and others. AWS had $128.7 billion in sales for calendar 2025, and Microsoft Azure had sales of $85.8 billion over the comparable four-quarter period. Google has not reported full-year cloud sales. Microsoft shares rose about 1.4% in after-hours trading on Wednesday after the company disclosed the change.

Microsoft drops $101.9 billion surprise as AI reshapes company

Microsoft (MSFT) has told Wall Street Azure was growing quickly. While it hadn't previously disclosed the product-specific revenue, that changed this week. Microsoft shared quarterly Azure revenue for the first time, according to Reuters, showing $29.4 billion in the most recent quarter and $101.9 billion in the fiscal year ended June 30. The disclosures provide investors their clearest picture yet of where Microsoft stands in the cloud computing competition, with Azure behind Amazon's (AMZN) Amazon Web Services but ahead of Alphabet's (GOOGL) Google Cloud, based on the companies' latest quarterly sales numbers. But maybe the scale of Azure is not the most relevant component of the Microsoft statement. The firm is also altering how it reports its operations, going from three business categories to two as artificial intelligence increasingly spans cloud infrastructure, software, and AI applications. Microsoft CEO Satya Nadella said AI is transforming what Microsoft creates and how the business works, making its products less distinct from one another. For investors, it poses a greater challenge than whether Azure can catch AWS. Microsoft could be hinting that the traditional approach of assessing its operations no longer suits the company it is becoming. Microsoft finally reveals how big Azure has become Azure generated $29.4 billion in sales during Microsoft's latest quarter, StockTwits noted, and $101.9 billion during the fiscal year ended June 30. That provides a concrete figure for a business that Microsoft has mostly spoken about in terms of growth percentages. It also makes the comparison with Microsoft's top cloud competitors much clearer for investors. Amazon Web Services made $42.2 billion in revenue in its last quarter, compared to $24.8 billion for Google Cloud, as Reuters reported. AWS generated $128.7 billion in calendar 2025 sales, compared with $85.8 billion for Azure over the comparable four-quarter period. Google has not disclosed an equivalent full-year cloud figure. AWS is still the biggest standalone cloud business. But the announcement from Microsoft also demonstrates how much Azure has grown on its own. The cloud platform generates more than $100 billion a year as companies ramp up spending on the infrastructure required to operate artificial intelligence models, apps, and agents. Microsoft's recent results underscore the trend. Azure and other cloud services revenue increased 43% year over year in Microsoft's fiscal fourth quarter. Companywide revenue rose 18% to $90 billion, while operating income increased 18% to $40.6 billion. For the full fiscal year, Microsoft generated $331.8 billion in revenue. Those metrics help explain why Azure has become such a significant part of Microsoft's investment narrative. But the more crucial issue may be what Microsoft wants to offer on top of all that processing capability. One advantage Microsoft has that makes a direct Azure-versus-AWS comparison inadequate. The corporation already has software deeply implanted within many corporate clients, including Microsoft 365, Windows, and developer tools. That means Microsoft can earn every infrastructure dollar for its wider AI plan without relying on Azure. Microsoft has a new client segment for its AI software: A customer running AI workloads on Azure may now also become a buyer of Microsoft's AI software, developer tools, and workplace apps. Microsoft's recent reporting shift shows that management increasingly wants investors to consider those companies together. Bloomberg / Getty Images Microsoft's AI shift is changing how investors see the business Microsoft intends to reduce its reporting segments from three to two. One of those new businesses, named Agents and Infra, will contain Microsoft's cloud-computing services, AI-based software, and more conventional business software. The second, Devices and Consumer, would encompass Windows, Xbox, Bing-linked advertising, and LinkedIn advertising, Reuters confirmed. That seems like an accounting adjustment on the face of it. In a strategic sense, this change indicates much more. Microsoft's former reporting structure was a reflection of a corporation whose core products could still be pretty neatly segregated into productivity software, cloud infrastructure, and personal computing. Artificial intelligence makes maintaining boundaries harder. Azure provides AI infrastructure. GitHub Copilot integrates AI into software development. Microsoft 365 Copilot adds generative AI to business apps. Companies can add more software to Microsoft's cloud infrastructure with its growing AI agent portfolio. Those items may make money in diverse ways, but economically they reinforce each other more and more. A firm may first acquire computer capacity from Azure. It may then add AI tools for developers, Microsoft 365 Copilot subscriptions for workers, and AI agents to automate corporate processes. Nadella captured that shift when he said AI is "blurring the boundaries between our products and reshaping our business models," The Standard reported. That may be the true message of Microsoft's financial-reporting facelift. Wall Street has been asking for years how big Azure is. Microsoft may now be telling investors that the right question is not Azure alone. Microsoft also slightly lowered the Azure revenue forecast it gave investors last month. But there's a good reason. The adjustment followed the company's decision to transfer certain GitHub sales that had been lumped with Azure into its Microsoft 365 Cloud businesses, which include many of Microsoft's advanced AI services, the company said. Microsoft said it still expects the same results for the quarter overall. Thus, the lower Azure forecast was not framed as a drop-off in demand. It was another consequence of Microsoft redrawing the lines between businesses that AI is increasingly bringing together. Microsoft's $101.9 billion reveal comes with an expensive catch There is still a big danger underlying Microsoft's growing AI prospect. Building artificial intelligence costs a lot of money. Microsoft has been investing in data centers, semiconductors, networking equipment, and other infrastructure to meet the need for AI computing. That investment is helping Azure develop swiftly, but it is also squeezing profitability. Microsoft said its cloud gross margin percentage declined from a year ago, partially due to a shift in its sales mix toward Azure, as well as sustained investment in AI infrastructure and increased use of AI products. This situation presents perhaps the biggest issue for Microsoft investors. Artificial intelligence can provide significant new income, but ultimately, Microsoft has to show those dollars increase faster than the massive expense of sustaining them. The company has several ways to make that equation work. Azure can generate infrastructure revenue directly. Copilot products can add higher-value software revenue. Developer tools and AI agents also provide Microsoft with other routes to monetize the same consumers who currently use its cloud. That's why the new Agents and Infra category is potentially so essential. Microsoft seems to be constructing an AI economic engine in which consuming infrastructure feeds software sales, and software adoption creates more demand for infrastructure. If that flywheel succeeds, Azure's $101.9 billion in yearly sales may one day seem less like the main focus of Microsoft's AI narrative and more like the foundation underneath it. But the squeeze on margins means investors can't expect every more AI dollar to be as lucrative. Microsoft must still prove that improvements in efficiency, software monetization, and scalability can outweigh the expense of the infrastructure buildout. That makes the company's first Azure revenue report particularly helpful. For the first time, investors now have a clear yardstick for one of Microsoft's most valuable companies. And Microsoft's new reporting structure implies management already expects the next act in the tale will be far larger than Azure alone. Microsoft finally tells Wall Street how big its cloud engine is. Now investors need to figure out how much more valuable that engine becomes when Microsoft hooks it up to just about everything else the business offers. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published September 3, 2026 at 7:33 PM.

Microsoft to Disclose Azure Cloud Quarterly Revenues as Part of Consolidation Efforts

Within each of these segments, you will have full transparency of quarterly revenue across each of our key businesses, including Azure, M365, industry solutions, and ads Big Tech giant Microsoft announced last evening that it would start reporting sales from its Azure cloud computing unit on a quarterly basis so that investors and customers can directly compare the numbers with top rivals Amazon Web Services and Google Cloud. Does the timing of this announcement have anything to do with AI and the datacentre boom? In a statement, CEO Satya Nadella said "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." The announcement came as part of a presentation made on Wednesday. In the deck, Nadella said, "Beginning with FY27, we will transition from our current three reporting segments, viz., productivity and business processes, intelligent cloud, and more personal computing, to two segments namely agents and infra, and devices and consumer.' "Within each of these segments, you will have full transparency of quarterly revenue across each of our key businesses, including Azure, M365, industry solutions, and ads," Nadella said. That the Azure unit would get special treatment seems to indicate that Microsoft wants to showcase the key beneficiary in its stables from the AI boom, especially given the customer-base that it is racking up on the cloud for access to AI models needed to develop new agents or to use the available AI tools. In fact, some analysts are already predicting that the July quarter revenue growth for Azure may be shared between OpenAI and Anthropic tools as in the past these numbers could have tilted towards the ChatGPT-maker in earlier quarters. Of course, Amazon has been disclosing AWS numbers separately for over 11 years now. In the June quarter, AWS generated 42 billion in revenues while Azure had $29.4 billion with Google Cloud coming third with $24.7 billion. There are those who argue that the latest move, ostensibly meant to increase transparency, might do just the opposite as the latest changes could make it harder to figure out the profit margins on Microsoft's individual segments, given that it is collapsing three segments into two in the latest accounting tweak. One segment has both Azure and Microsoft 365 software business, which was previously reported as two separate segments. Analysts say they were used to seeing operating margins for them separately whereby Azure had 41% operating margin in the April quarter while the M365 report a 58% margin during the same period. Going forward therefore, we may only see revenues for individual units without getting their operating income. Which means, that investors may only get to see operating profits that reflects both cloud and software as a whole and not separately. Given Microsoft's growing expenses around datacentres, could the new system be a way to keep this under wraps? On its part, the company justifies the new system claiming that both Microsoft 365 and Azure share AI chips and cloud computing capacity and therefore should be treated as one segment for reporting purposes. Sound logic that and we hope Microsoft continues to tell us its exposure to datacentre projects too.

Microsoft updates segment reporting structure for fiscal 2027 By Investing.com

Investing.com -- Microsoft Corporation (NASDAQ:MSFT) released supplemental presentation materials on Wednesday that provide investors with restated historical financial data and a revised reporting structure for Fiscal Year 2027. The company restructured its segment reporting to align with how executive management evaluates operations and allocates capital, with a focus on integrated AI infrastructure, Copilot platform adoption, and cloud productivity. The filing includes restated historical quarterly and annual figures under the new framework. Microsoft's three primary business segments -- Productivity and Business Processes, Intelligent Cloud, and More Personal Computing -- remain in place, but specific revenue streams and product lines were realigned within each division. The Intelligent Cloud segment now consolidates all core cloud platform computing, Azure AI consumption services, and enterprise silicon infrastructure, including Azure Maia and Cobalt deployments, under Azure & AI Infrastructure. Enterprise Mobility + Security metrics were adjusted to separate cloud infrastructure consumption from productivity seating. The Productivity and Business Processes segment now integrates Copilot subscriptions directly with Microsoft 365 Commercial Cloud revenue streams. Nuance-related specialized vertical AI services were reallocated to better reflect enterprise workflow offerings in Dynamics 365 and Microsoft 365. The More Personal Computing segment refined its reporting around Surface hardware, Windows OEM, and Xbox content and services. Microsoft reported FY26 full-year revenue of $331.8 billion, up 18% year-over-year and 16% in constant currency. Operating income reached $155.2 billion, representing an operating margin of approximately 46.8%. Microsoft Cloud revenue hit a run-rate of $59.3 billion in Q4 FY26, up 27% year-over-year. The company's commercial remaining performance obligation backlog stood at $678.0 billion at the end of FY26, up 84% year-over-year. For Q1 FY27, Microsoft projected Intelligent Cloud revenue between $40.95 billion and $41.25 billion, with Azure growth expected at approximately 45% in constant currency. The Productivity & Business Processes segment is expected to continue mid-to-high double-digit growth driven by enterprise Copilot adoption. Microsoft guided FY27 capital expenditures toward approximately $175 billion, directed at datacenters, networking, and custom silicon to meet demand for AI workloads and Azure capacity. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Microsoft to announce Azure quarterly revenue for the first time

Under this new definition, Azure generated $29.42bn in the quarter ended June, up 42%, representing nearly a third of Microsoft's total revenue. In Q1 the group expects Azure's growth to be between 44% and 45% at constant exchange rates. The business is greatly benefiting from the AI boom, with Stifel estimating that roughly half of its growth during FY 2026 came from OpenAI, while Anthropic is also relying more heavily on Microsoft's infrastructure. The new organization will include Agents and Infra, which will bring together Azure, Microsoft 365, productivity software, industry solutions and products such as Microsoft 365 Copilot and GitHub Copilot, as well as Devices and Consumer, which will include Windows, Xbox, devices, search and advertising. Microsoft is targeting between $75.15bn and $75.75bn in revenue for the first segment and between $14.7bn and $15.2bn for the second. The group did not change its overall revenue, cost or operating expense guidance.

Microsoft to Change Reporting Structure to Reflect Effects of AI

Microsoft is changing its reporting structure from three segments to two - Agents and Infra and Devices and Consumer - as the company responds to changes brought about by artificial intelligence. Previously, Microsoft's reporting segments consisted of Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Satya Nadella, chairman and chief executive officer, said AI represents a "profound shift" in technology and business, and is changing what the company builds and how it operates. In addition, AI is blurring boundaries between the company's products and reshaping its business models, Nadella said. The Agents and Infra segment will encompass apps and agents, which include Microsoft 365 and GitHub, the multi-model system grounded in rich-enterprise context, and global-scale Azure infrastructure, Microsoft said. Meanwhile, Devices and Consumer will contain search and advertising, XBOX, and Windows, according to the company. The new structure brings the company's advertising businesses together, Microsoft added. The Agents and Infra segment is expected to report fiscal year 2027 first-quarter revenue of $75.15 billion to $75.75 billion. Devices and Consumer is expected to report first-quarter revenue between $14.7 billion and $15.2 billion, the company said. Microsoft said it will also update several other metrics as a result of these changes.