Technology giant Microsoft (MSFT) says it will begin disclosing quarterly revenue for its Azure cloud computing business unit.
It will be the first time that Microsoft breaks out revenue for the Azure unit and it will provide investors with a clearer picture of the business that competes directly against Amazon Web Services (AMZN) and Google’s (GOOGL) cloud computing platform.
The change is part of a broader shift in the way Microsoft reports its quarterly results as the company consolidates its operating segments into two from three previously.
The new approach also comes as Microsoft’s Azure has been a major beneficiary of the artificial intelligence (A.I.) boom as customers use the cloud computing platform to access A.I. models.
Analysts estimate that the majority of Azure’s revenue growth this year has come from A.I. startups OpenAI and Anthropic.
Rival Amazon began disclosing revenue from its AWS cloud unit in 2015. Alphabet started providing total revenue from Google Cloud in 2020.
Microsoft, by contrast, has until now only provided the year-over-year growth rate for Azure.
Another big change to Azure is that its revenue will exclude other cloud services such as GitHub, developer cloud services, and the Security Copilot assistant.
Until now, Microsoft has lumped Azure and other cloud services together when reporting its financial results. Going forward, Azure’s revenue will be reported as a standalone item.
Microsoft said under its new reporting structure, Azure revenue grew 42% to $29.42 billion U.S in the year’s second quarter. Azure represented 33% of Microsoft’s total revenue in the period.
Management at Microsoft has forecast 45% year-over-year revenue growth for the Azure cloud unit in the current quarter.
MSFT stock has declined 2% during the past 12 months to trade at $496.82 U.S. per share.
Tech Insider
