Microsoft Finalizes Azure Revenue Reporting and Defines Its Scope
Microsoft has made significant changes to its reporting structure and finally assigned a dollar figure to its Azure business. Under a new two-segment approach, effective for the June quarter, the company will report Azure revenue in dollars each quarter for the first time.
Key Takeaways:
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Revenue Growth: Azure’s revenue reached $29.42 billion in Q3 2026, growing by 42% under the new structure. This represents approximately 33% of Microsoft’s total revenue.
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Segment Overhaul: The number of operating segments has decreased from three to two: Agents and Infra, and Devices and Consumer.
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Azure Scope Narrowing: GitHub cloud services, developer cloud services, Security Copilot, and healthcare products are no longer considered part of Azure. Satya Nadella described Azure as a "purely consumption-based platform and infrastructure business."
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Regulatory Context: These changes come as the European Commission considers designating Azure and Amazon Web Services (AWS) as gatekeepers under the Digital Markets Act (DMA). The Commission’s preliminary position in June suggested both should be subject to DMA regulations, which include interoperability requirements, limits on self-preferencing, and fines up to 20% of global turnover for repeated breaches.
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First Azure Revenue Figure: Microsoft will report Azure revenue in dollars alongside its overall financial results this quarter, aligning with the Commission’s expected final decision on the DMA designation.
The timing of these events is notable, as the first published Azure revenue figure and the European Commission’s anticipated decision both fall in the same quarter.