Microsoft is changing the way it reports its business results, and one of the biggest changes will be far more visibility into Azure. Starting with fiscal 2027, the company will disclose Azure revenue separately, giving investors a clearer picture of how much money its cloud infrastructure business actually generates.
The move comes as Microsoft’s cloud and artificial intelligence operations become increasingly intertwined. Using the new reporting structure, Microsoft has already restated historical figures and estimates that Azure generated $101.938 billion in revenue during fiscal 2026, including $29.417 billion in the final quarter.
The company is also replacing its long-standing three-segment reporting structure with two broader divisions. The changes do not affect Microsoft’s products or services, but they provide a significantly different view of how the company is organized and where its revenue is coming from.
Azure revenue finally gets a clear figure
Until now, Microsoft generally disclosed the growth rate for “Azure and other cloud services” without regularly providing Azure’s standalone quarterly revenue. That made it possible to track momentum, but not to determine precisely how large Azure had become.
Microsoft’s revised reporting gives a much clearer picture. Under the new definition, Azure generated:
- FY26 Q1: $22.384 billion
- FY26 Q2: $24.129 billion
- FY26 Q3: $26.008 billion
- FY26 Q4: $29.417 billion
That brought full-year Azure revenue to $101.938 billion, compared with $72.610 billion in fiscal 2025. Microsoft says the business grew by 40% during FY26 under the new reporting methodology.
The figures also highlight Azure’s importance within Microsoft Cloud. The broader Microsoft Cloud business generated $59.3 billion in the final quarter of FY26, meaning Azure alone accounted for roughly half of that total.
For the first quarter of fiscal 2027, Microsoft expects Azure growth of 44% to 45% at constant exchange rates.
Microsoft is changing what counts as Azure
There is an important distinction behind the new figures. Microsoft is not simply revealing information that was previously hidden. It is also changing the composition of the Azure category.
GitHub Cloud and other developer-focused cloud services will move out of Azure and into Microsoft 365 Commercial Cloud. Security Copilot will also be excluded from Azure, while Healthcare and Life Sciences Cloud will move into the new Industry Solutions category.
Microsoft CEO Satya Nadella has explained that the revised definition is intended to make Azure more representative of its consumption-based infrastructure and platform business.
That distinction becomes particularly important when looking at growth. Microsoft previously reported 43% growth for “Azure and other cloud services” in the fourth quarter of FY26. Under the revised definition, Azure itself would have grown by 42%.
The new approach should therefore make future comparisons easier, although historical figures need to be interpreted using Microsoft’s updated definitions.
Microsoft retires its three-segment structure
The Azure disclosure is only part of a much larger reporting overhaul.
Microsoft has used three major reporting segments since fiscal 2016: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The structure emerged during the early years of Nadella’s tenure, when Windows, Office 365 and Azure were central to Microsoft’s transformation.
Beginning with fiscal 2027, those three divisions will be replaced by two broader categories.
Agents and Infra
The new Agents and Infra segment will bring together Azure, Microsoft 365 Cloud, GitHub, enterprise services, servers and industry solutions.
Restated under this structure, the segment would have generated approximately $268.127 billion in fiscal 2026 revenue.
The category reflects Microsoft’s growing focus on cloud infrastructure, enterprise software and AI-powered agents. These products increasingly depend on one another, making the previous divisions less representative of how customers actually use Microsoft’s services.
Devices and Consumer
The second division, Devices and Consumer, will contain businesses including Windows, Xbox and advertising. It will also include parts of LinkedIn’s advertising and premium operations.
The segment generated approximately $63.712 billion in fiscal 2026 revenue under the revised structure.
For Windows and Xbox watchers, the change is notable. More Personal Computing, a segment that has existed for more than a decade, is disappearing. Windows and Xbox will instead sit within a broader consumer-focused category alongside advertising and related businesses.
That does not necessarily indicate another internal restructuring of the Windows or Xbox organizations. Rather, it shows how Microsoft wants investors to view the company’s businesses as its priorities shift toward cloud infrastructure and artificial intelligence.
AI is changing how Microsoft defines its businesses
Microsoft’s explanation for the restructuring is closely tied to artificial intelligence.
The boundaries between Microsoft’s individual products have become increasingly difficult to define. A business might use Azure for computing infrastructure, GitHub for development, Microsoft’s AI agents for automation and Microsoft 365 to deliver those services to employees.
From Microsoft’s perspective, treating each of those products as completely separate businesses no longer reflects how customers consume them.
The new Agents and Infra category is designed to capture that relationship.
It also puts Azure at the center of Microsoft’s AI strategy at a time when the company is committing enormous sums to data centers and computing capacity. Demand for Azure and AI infrastructure has occasionally outpaced Microsoft’s available capacity.
Microsoft Cloud generated $214.4 billion in fiscal 2026 revenue, while its outstanding commercial obligations reached $678 billion. Those figures demonstrate the scale of the commitments surrounding Microsoft’s cloud business.
Windows users will not see immediate changes
For consumers, Microsoft’s new financial reporting will not produce an immediate change.
There is no new Windows feature associated with the announcement, and it does not alter the availability of Windows, Copilot or Xbox services in Spain, the United States or other markets.
The changes will become relevant when Microsoft begins reporting its first fiscal quarter of 2027, expected toward the end of October.
For analysts and investors, however, the difference will be substantial. Instead of relying primarily on Azure growth percentages, they will have a clearer quarterly revenue figure that can be compared with competitors such as Amazon Web Services and Google Cloud.
That will also make it easier to evaluate whether Microsoft’s enormous investments in AI infrastructure are producing the returns the company expects.
Azure is now too important to remain hidden in broader figures
Microsoft’s decision comes at a pivotal moment for the company. Azure has grown into one of its most important businesses, yet its exact revenue had previously been obscured within the broader “Azure and other cloud services” category.
The new reporting approach should provide a much clearer picture of Azure’s financial performance while separating businesses such as GitHub and Security Copilot that no longer fit neatly into an infrastructure-focused definition.
The retirement of More Personal Computing is equally significant from a strategic perspective. The segment was created during the Windows 10 era, while Microsoft’s current story is increasingly centered on AI agents, cloud infrastructure and enterprise services.
Whether that strategy ultimately pays off will depend on Microsoft’s ability to turn its enormous AI spending into sustainable growth and profits. Starting with fiscal 2027, investors will have considerably more financial information with which to judge that bet.
