Major Transformation in Microsoft Financial Reporting: Azure Revenue to be Disclosed Quarterly, Merged with Office Business under "Agents and Infra"

Microsoft has compromised with years of criticism from Wall Street by announcing that it will begin to disclose exact quarterly revenue figures for its Azure cloud computing business, while simultaneously launching its largest financial reporting structure overhaul since 2015.

Jonathan Neilson, Microsoft's Head of Investor Relations, stated, “Given Azure’s current size and scale, it now feels like the right time to introduce a higher level of transparency.”

According to a filing submitted after the U.S. market closed on Wednesday, Azure’s revenue in the most recent fiscal quarter reached $29.4 billion. The company also disclosed quarterly revenue data for the past two years, showing a trend of continuous expansion.

This increased level of information disclosure is expected to provide investors with a clearer benchmark for assessing Microsoft’s progress in commercializing artificial intelligence. Azure has been viewed by the market as a key barometer for Microsoft’s AI business, and analysts have long struggled to accurately value it due to insufficient data.

Microsoft shares closed down 0.84% on Wednesday, but were up 0.32% in after-hours trading at the time of publication.

The Transparency Debate: Wall Street’s Long-Standing Demand

For a long time, Microsoft only disclosed Azure’s year-over-year growth rate, rather than its absolute revenue figures. This practice led to ongoing dissatisfaction among investors and analysts, as it made it difficult to clearly assess Azure’s real weight within Microsoft’s overall business and prevented meaningful comparisons with competitors.

As early as 2015, former Microsoft CEO and major shareholder Steve Ballmer publicly called for greater transparency from management regarding cloud business disclosures. “It’s a key metric,” Ballmer told Bloomberg at the time. “If they’re calling cloud computing the core of the company, they should report it honestly.”

Microsoft stated that Azure’s sales surpassed $100 billion in the fiscal year ending this June, up approximately 33% from $75 billion in the previous fiscal year, accounting for about 30% of the company’s total revenue.

Reporting Structure Overhaul: Reflecting AI’s Strategic Focus

Alongside the Azure revenue disclosures, Microsoft is implementing its most significant reporting segment restructuring since 2015.

Under the new structure, the existing “Intelligent Cloud” segment (which includes Azure and server products) and the “Productivity and Business Processes” segment (which includes Microsoft 365 and other former Office suite products) will be merged into a single segment called “Agents and Infra” (Agents and Infrastructure).

The former “More Personal Computing” segment (which encompassed Windows, search advertising, and Xbox) will be renamed the “Devices and Consumer” segment.

In addition, most of LinkedIn’s business growth will be incorporated into the Bing search and other advertising revenue segment. The new structure will officially take effect with Microsoft’s first-quarter earnings report of the new fiscal year (this fall).

In a statement about this adjustment, Microsoft CEO Satya Nadella said the development of artificial intelligence “is transforming how we build products and operate, it blurs the boundaries between our products and reshapes our business model.”

The new segment naming approach reflects Microsoft’s strategic intent to position AI agents as the next core driver of growth.