Microsoft CEO Satya Nadella speaks at the Microsoft AI Tour in Sydney on April 23, 2026.
George Chan | Getty Images News | Getty Images
microsoft begins disclosing quarterly earnings for its Azure cloud business for the first time, giving investors a clearer picture of the competing business. Amazon Web services and Google cloud platform.
The changes, announced in a presentation Wednesday, are part of a broader change to Microsoft’s reporting structure by reducing its operating segments from three to two. The previous regime had been in place since 2015.
Microsoft’s Azure division has been a big beneficiary of the artificial intelligence boom, as customers turn to major cloud infrastructure platforms to access the AI models they need to develop new agents and other tools. Stifel analysts said in July that about half of Azure’s revenue growth in fiscal 2026 will come from OpenAImeanwhile human Microsoft’s reliance on the cloud is also increasing.
CEO Satya Nadella said in a presentation: “There’s no question that Al is a game-changer in both technology and business.” “What we build and how we operate is changing, lines between products are blurring and business models are being reshaped.”
Amazon began disclosing revenue from market leader AWS in 2015. Alphabet, which ranks No. 3 in cloud, began offering gross revenue from Google Cloud Platform and Workspace productivity subscriptions in 2020.
In contrast, Microsoft only provides year-over-year growth rates for Azure and only started providing actual revenue on an annual basis last year.
Another big change to Azure, according to the presentation, is the exclusion of GitHub cloud services, developer cloud services, Security Copilot assistant, and healthcare and life sciences cloud products. In 2021, the company began announcing growth from Azure and other cloud services, and later booked a portion of the revenue from its acquisitions of GitHub and Nuance Communications.
“Under this reporting structure, Azure becomes a more purely consumption-based platform and infrastructure business,” Nadella said in the document.
Going forward, Microsoft’s two segments will be agents and infrastructure and devices and consumers.
The first includes Azure and Microsoft 365 cloud offerings, as well as productivity and server licenses, industry solutions, and frontier and support services. The latter includes revenue from search and advertising, Xbox, and the sale of device and Windows operating system licenses to device manufacturers.
Within agents and infrastructure, Microsoft can demonstrate momentum with its suite of AI assistants, including Microsoft 365 Copilot and GitHub Copilot coding agents for commercial customers. Microsoft announced in July that 365 Copilot has more than 30 million paid seats, up from more than 20 million in April.
Microsoft is also providing two years of revised financial results and adjusted guidance, but will no longer present costs and operating margins for the three old segments.
The new structure helped Azure’s revenue increase 42% to $29.42 billion in the June quarter. This compares to a 43% increase using the older Azure and other cloud services metrics. This means Azure accounted for nearly 33% of Microsoft’s total revenue in the most recent period.
Management said Azure revenue for the fiscal first quarter should increase 44% to 45% excluding currency effects. In July, the company called for 45% growth in constant currencies for Azure and other cloud services.
Microsoft is targeting agent and infrastructure revenue of $75.15 billion to $75.75 billion and device and consumer revenue of $14.7 billion to $15.2 billion. There are no changes to the outlook for overall revenue, cost of revenue, and operating expenses.
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