Microsoft Corp. will overhaul its financial reporting structure, consolidating three reportable segments into two divisions starting with its fiscal first-quarter results this fall. The new structure aims to provide clearer visibility into its cloud and AI-driven revenue streams, addressing long-standing demands from investors for more granular disclosures.
Under the revised framework, the company will split operations into "Agents and Infra" and "Devices and Consumer." The former combines Azure cloud services with server products and Microsoft 365 business software, while the latter consolidates Windows, Xbox gaming, search, and LinkedIn advertising revenues. The change marks the first major reorganization of Microsoft's reportable segments since 2015.
The move follows a period of rapid growth for Microsoft's cloud business. Quarterly Azure revenue reached $29.4 billion in the most recent quarter, contributing to annual sales of $100 billion for the fiscal year ending in June, up from $75 billion in the prior year. Azure now accounts for roughly 30% of Microsoft's total revenue, underscoring its role as the company's primary growth engine.
The restructuring aligns with broader industry trends, including an AI data center buildout where Microsoft maintains a pivotal infrastructure partnership with OpenAI. Competitors such as Amazon Web Services (AWS) reported $128.7 billion in sales for calendar 2025, highlighting the intensifying rivalry in the cloud computing market.
Microsoft's shares gained 0.4% in extended trading following the announcement. The company disclosed the changes in an SEC filing, emphasizing the shift toward greater transparency in its financial disclosures.
