Microsoft to Break Out Azure Revenue in Two-Segment Overhaul

Microsoft is putting a dollar figure on Azure. Starting with its fiscal first-quarter results this fall, the company will disclose Azure's quarterly revenue for the first time, alongside its first major reorganization of reportable business segments since 2015, CNBC reported.

Under the new structure, Azure revenue grew 42% to $29.42 billion in the June quarter, representing almost 33% of Microsoft's total revenue. The number of operating segments drops from three to two: 'Agents and Infra,' which will include cloud computing services, AI-based software and traditional business software, and 'Devices and Consumer,' which holds Windows, Xbox and advertising across Bing and LinkedIn.

The Azure line itself is being narrowed. It will exclude GitHub cloud services, developer cloud services, the Security Copilot assistant and healthcare and life sciences cloud products. 'Under this reporting structure, Azure becomes more purely our consumption-based platform and infrastructure business,' CEO Satya Nadella wrote in a presentation.

Management guided fiscal first-quarter Azure revenue to grow 44% to 45% at constant currency. Previously, Microsoft mainly disclosed only Azure's annual growth rate, and last year it began providing annual sales figures for this business. It is the sharpest disclosure step yet in a running stream of Microsoft news we have tracked this summer, one of 108 Microsoft stories we have logged in the last 90 days.