Superpower Daily
Google Agrees to Buy 396 MW of Geothermal Power for a Planned U...Anthropic’s Fable 5.1 Takes Benchmark Lead, but Its Top Setting...LlamaIndex and Kaggle Launch a Document Benchmark for Cost and...Meta Rolls Out Muse Spark 1.3 for Longer Tasks, With Max Reason...CrowdStrike Wants AI Agents Rechecked Before Every ActionLoudoun County Confronts Data-Center Backlash After Reaping a T...Google Agrees to Buy 396 MW of Geothermal Power for a Planned U...Anthropic’s Fable 5.1 Takes Benchmark Lead, but Its Top Setting...LlamaIndex and Kaggle Launch a Document Benchmark for Cost and...Meta Rolls Out Muse Spark 1.3 for Longer Tasks, With Max Reason...CrowdStrike Wants AI Agents Rechecked Before Every ActionLoudoun County Confronts Data-Center Backlash After Reaping a T...
Businesspublished

Microsoft Will Publish Azure’s Quarterly Revenue as It Consolidates Segments

The new figure gives Azure a clearer quarterly measure, but it arrives under a narrower definition and alongside less profitability detail for Microsoft’s former business lines.

By 2 min read
Microsoft Will Publish Azure’s Quarterly Revenue as It Consolidates Segments
Microsoft Will Publish Azure’s Quarterly Revenue as It Consolidates Segments
Sign in to save and react

Listen to this story

The audio brief

About 1:39
0:001:39
Read transcript
Microsoft is putting a dollar figure on Azure every quarter, starting with $29.42 billion in the June quarter. That gives investors a much clearer way to compare Microsoft’s cloud business with Amazon Web Services and Google Cloud. Azure grew 42% year over year under the new reporting definition, and represented almost a third of Microsoft’s total revenue. The important caveat is that this is not simply the old metric with a price tag attached. Microsoft is narrowing Azure to what it describes as a more consumption-focused platform and infrastructure business. GitHub cloud services, developer cloud services, Security Copilot, and healthcare and life sciences products are excluded. Under the old definition, the June-quarter growth rate would have been 43%, rather than 42%. Microsoft is guiding to 44% to 45% Azure growth in fiscal first quarter at constant currency. That’s guidance, not a reported result. The reporting change also reorganizes the company into Agents and Infra, and Devices and Consumer. Microsoft expects those divisions to generate between $75.15 billion and $75.75 billion, and between $14.7 billion and $15.2 billion, respectively, in the coming quarter. It will provide two years of recast results, but no longer disclose costs and operating margins for the three former segments. One figure to watch is whether Azure’s new baseline remains comparable as Microsoft’s AI products, including Microsoft 365 Copilot and GitHub Copilot, sit elsewhere in the reporting structure.

Story brief

3 key points

Microsoft’s reporting overhaul will make Azure’s quarterly scale easier to compare with AWS and Google Cloud, but the first figure comes with a narrower definition. Azure generated $29.42 billion in the June quarter, up 42% year over year and nearly one-third of Microsoft revenue; fiscal Q1 guidance is 44%-45% growth at constant currency, not a reported result. Investors will get two years of recast segment data,...

  1. 01

    The June quarter establishes Azure’s first quarterly dollar baseline under Microsoft’s revised, more consumption-focused definition.

  2. 02

    Excluded from Azure: GitHub cloud services, developer cloud services, Security Copilot, and healthcare and life sciences cloud products.

  3. 03

    Microsoft expects fiscal Q1 Agents and Infra revenue of $75.15 billion-$75.75 billion and Devices and Consumer revenue of $14.7 billion-$15.2 billion.

Microsoft will begin publishing quarterly Azure revenue in dollars, giving its cloud platform a direct financial measure for the first time. The company is making that change as it replaces three operating segments with two, centered on Agents and Infra and Devices and Consumer.

A clearer number, with new boundaries

Azure grew 42% year over year to $29.42 billion in Microsoft’s June quarter under the new definition, representing almost 33% of the company’s total revenue. Microsoft expects fiscal first-quarter Azure growth of 44% to 45% at constant currency; that is company guidance, not a reported result.

Microsoft had previously supplied Azure’s growth rate rather than quarterly dollar sales, although it began providing annual Azure sales last year. Amazon has disclosed AWS revenue since 2015, while Alphabet began reporting combined Google Cloud Platform and Workspace revenue in 2020.

The cloud line becomes more narrowly defined

The new Azure line is not the former Azure and other cloud services metric with a dollar label added. Microsoft says the old measure would have risen 43% in the June quarter, compared with 42% for newly defined Azure. The previous fiscal first-quarter outlook was 45% constant-currency growth for the older measure.

What Microsoft is moving around

  • Azure will exclude GitHub cloud services, developer cloud services, Security Copilot, and healthcare and life sciences cloud products. Microsoft describes the revised Azure measure as a more purely consumption-based platform and infrastructure business.
  • Agents and Infra will include Azure, Microsoft 365 cloud products, productivity and server licensing, industry solutions, and frontier and support services. Devices and Consumer will include search and advertising, Xbox, devices, and Windows licenses sold to device makers.

New revenue buckets, less old-margin detail

Microsoft is targeting $75.15 billion to $75.75 billion in fiscal first-quarter revenue for Agents and Infra, and $14.7 billion to $15.2 billion for Devices and Consumer. It will provide two years of recast results and adjusted guidance, but stop disclosing costs and operating margins for the three former segments.

The new Agents and Infra segment will also contain Microsoft’s commercial Microsoft 365 Copilot and GitHub Copilot offerings. Microsoft said it had more than 30 million paid Microsoft 365 Copilot seats in July, up from more than 20 million in April.

Sources

  1. cnbc.comMicrosoft to start disclosing Azure quarterly revenue as company consolidates business units

Related coverage

Continue reading