Technology
Microsoft to report standalone quarterly Azure revenue amid segment reorganization
The company is condensing its financial reporting into two operating segments and refining the scope of its cloud infrastructure business.
The short version
- Microsoft announced it will begin reporting standalone dollar revenue figures for its Azure cloud business each quarter.
- The reporting overhaul simplifies the company's organizational structure from three operating segments down to two: Agents and Infra, and Devices and Consumer.
- Under the redefined metrics, standalone Azure generated $29.42 billion in revenue during the June quarter, accounting for nearly one-third of companywide sales.
- Management projects Azure revenue to expand 44% to 45% on a constant currency basis in the fiscal first quarter.
Key facts
- Microsoft will regularly disclose dollar-denominated quarterly revenue for Azure for the first time, replacing its previous practice of primarily sharing percentage growth rates.[CNBC]
- The company is consolidating its financial framework from three operating units into two: Agents and Infra, and Devices and Consumer.[CNBC]
- Under the recast definition, which removes GitHub cloud services, developer tools, Security Copilot, and specialized healthcare software, Azure generated $29.42 billion in the June quarter, reflecting a 42% increase.[CNBC]
- Azure comprised nearly 33% of Microsoft's total revenue in the June quarter.[CNBC]
- For the upcoming fiscal first quarter, Microsoft guided constant-currency Azure growth of 44% to 45% while leaving total company revenue and expense targets unchanged.[CNBC]
- Microsoft disclosed it will discontinue providing operating margins and cost breakdowns for its former three-segment structure.[CNBC]
What remains uncertain
- The precise proportion of Azure growth driven by external AI partners remains an outside estimate, such as Stifel analysts estimating in July that OpenAI accounted for roughly half of Azure's fiscal 2026 growth.[CNBC]