Microsoft will begin disclosing quarterly Azure revenue in dollar terms for the first time, a reporting change that gives investors and competitors a direct read on the cloud unit at the center of the company's AI infrastructure business1,2.
Under the new structure, Azure revenue grew 42% year over year to $29.42 billion in the June quarter. Azure represented almost 33% of Microsoft's total revenue in the period. Previously, Microsoft had only provided year-over-year growth rates for Azure, withholding absolute dollar figures on a quarterly basis. The company started offering actual sales on an annual basis dating back to last year.
The disclosure arrives alongside a broader reorganization of Microsoft's reporting segments, trimming from three operating units to two: Agents and Infra, and Devices and Consumer. The prior three-segment structure had been in place since 2015. Microsoft will stop showing costs and operating margins for the three old segments and is providing two years of recast financial results along with adjusted guidance.
"Under this reporting structure, Azure becomes more purely our consumption-based platform and infrastructure business," CEO Satya Nadella wrote in a presentation. The redefined Azure unit will exclude GitHub cloud services, developer cloud services, the Security Copilot assistant, and healthcare and life sciences cloud products. Microsoft had previously lumped in some revenue from the GitHub and Nuance Communications acquisitions. Using the old "Azure and other cloud services" metric, revenue grew 43% in the quarter, one percentage point above the narrower definition.
Management said fiscal first-quarter Azure revenue should grow 44% to 45% at constant currency. In July, Microsoft had called for 45% growth at constant currency under the old Azure and other cloud services metric. The company is targeting $75.15 billion to $75.75 billion in Agents and Infra revenue and $14.7 billion to $15.2 billion in Devices and Consumer revenue, with no changes to the outlook for overall revenue, cost of revenue, or operating expenses.
The AI dimension of Azure's growth is substantial. Analysts at Stifel estimated in July that about half of Azure's revenue growth in the 2026 fiscal year came from OpenAI. Anthropic has also become more reliant on Microsoft's cloud. Microsoft said in July that it had over 30 million paid seats for 365 Copilot, up from more than 20 million as of April.
Amazon began disclosing revenue from AWS in 2015, and Alphabet started providing total revenue from Google Cloud Platform and Workspace productivity subscriptions in 2020. ANALYSIS Microsoft's move to report Azure in dollars closes a long-standing transparency gap relative to its two primary cloud competitors, and the cleaner segment definition strips out bundled software revenue that had made apples-to-apples comparisons difficult.
The new two-segment structure, with one unit named "Agents and Infra," places AI workloads and cloud infrastructure under a single reporting umbrella, tying Microsoft's financial narrative directly to the AI compute cycle that is driving Azure's 42% growth rate.