Microsoft Overhauls Financial Reporting as Azure Revenue Soars

The new reporting model marks a departure from legacy divisions like Intelligent Cloud and More Personal Computing. The Agents and Infra segment, home to Azure and Microsoft 365, now accounts for 83 percent of total revenue, surging 25 percent year-over-year. Investors gained a long-awaited level of transparency, with Microsoft confirming Azure contributed $33.17 billion to the quarterly total—a 48 percent increase from the previous year.

Conversely, the Devices and Consumer segment faced significant headwinds, generating $15.5 billion, a three percent decline. The drop is largely attributed to a 22 percent fall in Windows OEM and device revenue, exacerbated by a broader 20 percent contraction in the PC market and supply chain constraints dubbed "RAMageddon." Hardware performance in the Xbox division also struggled, with hardware revenue down 14 percent and content and services down 2 percent. Despite CEO Asha Sharma’s internal commitment to return Xbox to growth by mid-2027, the gaming unit remains in a state of transition following significant layoffs and studio restructuring.