Microsoft reveals Azure revenue of $29.4B in reporting overhaul

Microsoft will begin reporting Azure's quarterly revenue in dollars for the first time, disclosing $29.42 billion for the June quarter as part of its largest segment restructuring since 2015. The company is collapsing three operating segments into two — Agents and Infra and Devices and Consumer — and narrowing what counts as Azure by removing GitHub cloud services, developer cloud, Security Copilot, and healthcare cloud products.

"Given Azure's current scale, now feels like the right time for a higher level of transparency," Jonathan Neilson, Microsoft's head of investor relations, said in the company's presentation Wednesday. The move follows more than a decade of pressure from investors and analysts who argued that growth-rate-only disclosure made Azure impossible to value against Amazon Web Services and Google Cloud.

Under the new structure, Azure grew 42 percent year-over-year to $29.42 billion in the fiscal fourth quarter, representing nearly 33 percent of Microsoft's total revenue. The company said Azure surpassed $100 billion in annual sales in the fiscal year ended June, up from roughly $75 billion a year earlier. Management guided fiscal first-quarter Azure growth of 44 to 45 percent at constant currency.

The restructuring reflects how Microsoft's AI strategy has redrawn its business lines. CEO Satya Nadella wrote in the presentation that AI "is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models." The new Agents and Infra segment combines Azure with Microsoft 365 cloud products, productivity and server licensing, and industry solutions — grouping the infrastructure and software that power AI agents under one reporting umbrella.

Azure's $100B run-rate narrows its definition

The redefined Azure excludes GitHub cloud services, developer cloud services, Security Copilot, and healthcare and life sciences cloud products — revenue streams that had been folded into the "Azure and other cloud services" metric since 2021. Nadella described the new Azure as "more purely our consumption-based platform and infrastructure business."

The change brings Microsoft closer to how Amazon has reported AWS since 2015 and how Alphabet has reported Google Cloud since 2020, giving investors direct dollar comparisons across the three largest cloud providers for the first time. Azure's 42 percent growth rate also exceeds the pace of its two main rivals, cementing Microsoft's position as the fastest-growing hyperscaler in the AI infrastructure buildout.

The timing also intersects with regulatory scrutiny. The European Commission reached a preliminary position in June that Azure should be designated a gatekeeper under the Digital Markets Act, with a final decision expected by the end of this year. The Commission had struggled to assess Azure's market position without absolute revenue figures, since cloud infrastructure does not generate the monthly active end users the DMA's automatic thresholds assume. Microsoft has not connected the disclosure to the DMA process, and segment changes of this scale typically take months to prepare.

Copilot seats hit 30M inside Agents and Infra

Inside the new Agents and Infra segment, Microsoft will showcase momentum from its AI assistant portfolio. The company said it had more than 30 million paid seats for Microsoft 365 Copilot as of July, up from more than 20 million in April. GitHub Copilot, the coding agent, also sits within the segment.

Analysts at Stifel estimated in July that about half of Azure's revenue growth in fiscal 2026 came from OpenAI workloads, while Anthropic has also become more reliant on Microsoft's cloud infrastructure. Microsoft's guidance for the new segment targets $75.15 billion to $75.75 billion in Agents and Infra revenue for the current quarter, with $14.7 billion to $15.2 billion from Devices and Consumer.

Microsoft shares closed down 0.84 percent Wednesday before the announcement, then rose 0.32 percent in after-hours trading. The company will begin reporting under the new structure in its fiscal first-quarter results this autumn, with two years of recast financials and adjusted guidance provided alongside. For investors tracking Microsoft's AI monetization, the quarterly Azure dollar figure now provides a direct measure of how much of the company's growth is tied to AI infrastructure demand — a metric previously obscured by bundled cloud services.

This article is for informational purposes only and does not constitute investment advice.