Microsoft undergoes major earnings restructuring: Azure revenue will be reported quarterly, and the Office business will be merged and renamed "Agents and Infra".

Microsoft has yielded to years of criticism from Wall Street by announcing it will begin disclosing specific revenue for its Azure cloud computing business on a quarterly basis, along with the company’s largest financial reporting structure reorganization since 2015.

Jonathan Neilson, Microsoft's head of investor relations, said that given Azure's current size and scale, "now feels like the right time to introduce a higher level of transparency."

A filing by Microsoft after the close of trading on Wednesday showed that Azure's revenue reached $29.4 billion in the most recent fiscal quarter, and also disclosed quarterly revenue data for the past two years, showing a continuous expansion trend.

This increased level of information disclosure is expected to provide investors with a clearer benchmark to measure Microsoft's commercialization progress in the field of artificial intelligence. Azure has been regarded by the market as an important indicator of Microsoft's AI business, and analysts have long struggled to accurately value it due to insufficient information.

Microsoft shares closed down 0.84% on Wednesday, but were up 0.32% in after-hours trading as of press time.

The Transparency Debate: Wall Street's Year-Long Demands

For a long time, Microsoft has only disclosed Azure's year-over-year growth rate, rather than absolute revenue figures, which has drawn continuous dissatisfaction from investors and analysts. This practice makes it difficult for outsiders to intuitively assess Azure's true significance in Microsoft's overall business, and also makes it impossible to make horizontal comparisons with competitors.

Back in 2015, former Microsoft CEO and major shareholder Steve Ballmer publicly called for greater transparency from management regarding cloud business disclosures. "This is a key metric," Ballmer told Bloomberg at the time. "Since they claim cloud computing is at the core of the company, they should disclose it truthfully."

Microsoft stated that Azure's sales exceeded $100 billion in the fiscal year ending in June, representing a growth of approximately 33% from $75 billion in the previous fiscal year and accounting for about 30% of the company's total revenue.

Report Structure Restructuring: A Mapping of AI Strategic Focus

Launched alongside Azure disclosures is Microsoft's most significant restructuring of its reporting divisions since 2015.

Under the new architecture, the existing "Intelligent Cloud" division (covering Azure and server products) and the "Productivity and Business Processes" division (covering Microsoft 365 and other former Office suites) will be merged into a single division named "Agents and Infra".

The original "More Personal Computing" division (which covered Windows, search advertising, and Xbox) has been renamed the "Devices & Consumers" division.

Furthermore, most of LinkedIn's business growth will be attributed to Bing search and other advertising revenue segments. This new structure will officially take effect in Microsoft's first-quarter fiscal year (this fall) earnings report.

In a statement regarding the adjustment, Microsoft CEO Satya Nadella stated that the development of artificial intelligence "is changing the way we build and operate, blurring the boundaries between our products and reshaping our business model."

The new division naming convention reflects Microsoft's strategic intention to position AI agents as the core growth driver for the next stage.

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