Microsoft Overhauls Reporting Structure, Splits into Two Segments, Azure to Disclose Quarterly Revenue
Microsoft announced its first major reporting overhaul since 2015, consolidating three operating segments into two: Agents and Infrastructure, and Devices and Consumers. The new structure takes effect in fiscal 2027 Q1. Azure will separately disclose quarterly revenue for the first time. In the quarter ended June, Azure revenue rose 42% year over year to $29.42 billion, while fiscal 2026 Azure revenue reached $101.938 billion, nearly a third of total revenue.
Microsoft announced a restructuring of its financial reporting, merging its three existing operating segments into two, marking the first major change since 2015. The new structure will take effect with the first quarter of fiscal 2027. CEO Satya Nadella said artificial intelligence is transforming technology and business, changing how products are built and operated, blurring product boundaries, and reshaping business models. The adjustment aims to improve financial transparency, particularly in the disclosure of cloud computing operations.
The new segments are Agents and Infrastructure, and Devices and Consumers. Agents and Infrastructure includes Azure cloud, Microsoft 365 cloud products, productivity software and server licenses, industry solutions, frontier operations, and support services. Devices and Consumers includes search and advertising, Xbox, device sales, and Windows licensing revenue. Azure will disclose quarterly revenue separately for the first time, excluding GitHub cloud services, developer cloud services, Security Copilot, and health cloud products.
In the quarter ended June, Azure revenue grew 42% year over year to $29.42 billion. In fiscal 2026, Azure revenue reached $101.938 billion, accounting for nearly one-third of Microsoft's total revenue. Microsoft previously only disclosed Azure's year-over-year growth rate, and only began providing annual actual sales figures in 2025. Amazon has disclosed AWS revenue since 2015, and Alphabet has disclosed Google Cloud and Workspace revenue since 2020.
Microsoft will also provide two years of restated financial results and adjusted guidance, but will stop showing the costs and operating margins of the three old segments.