Microsoft Corp. (NASDAQ: MSFT) will adjust its segment reporting structure for fiscal 2027, consolidating cloud infrastructure and AI services under a unified 'Azure & AI Infrastructure' unit within its Intelligent Cloud segment. The change, effective from the first quarter of the fiscal year, follows the release of supplemental presentation materials and restated historical data on Wednesday.
The company will maintain its three primary reporting segments—Productivity and Business Processes, Intelligent Cloud, and More Personal Computing—while refining internal classifications to better reflect operational performance. Within Intelligent Cloud, Azure AI consumption services, core cloud platform computing, and enterprise silicon infrastructure, including deployments of Azure Maia and Azure Cobalt, will be grouped under the new 'Azure & AI Infrastructure' unit. Enterprise Mobility + Security metrics will be adjusted to separate cloud infrastructure consumption from productivity seating.
In Productivity and Business Processes, Copilot subscriptions will be integrated directly with Microsoft 365 Commercial Cloud revenue streams. Nuance’s specialized vertical AI services have been reallocated to enterprise workflow offerings in Dynamics 365 and Microsoft 365. The More Personal Computing segment will see refined reporting around Surface hardware, Windows OEM, and Xbox content and services.
Microsoft reported full-year revenue of $331.8 billion for fiscal 2026, an 18% increase year-over-year and 16% in constant currency. Operating income reached $155.2 billion, with an operating margin of approximately 46.8%. Microsoft Cloud revenue run-rate totaled $59.3 billion in the fourth quarter of fiscal 2026, up 27% year-over-year. The commercial remaining performance obligation backlog stood at $678.0 billion at the end of the fiscal year, an 84% increase from the prior year.
For the first quarter of fiscal 2027, Microsoft projected Intelligent Cloud revenue between $40.95 billion and $41.25 billion, with Azure growth expected to rise approximately 45% in constant currency. The company also reaffirmed guidance for capital expenditures of approximately $175 billion in fiscal 2027, primarily directed toward datacenters, networking, and custom silicon development.
