Microsoft Announces Major Financial Reporting Restructure into Two Segments for FY27

Microsoft announced a significant change to its financial reporting structure, effective beginning in fiscal year 2027. The company will consolidate its operations from three reportable segments into two: (1) Agents and Infra and (2) Devices and Consumer. This change is intended to provide investors with greater transparency and better reflect how the business operates in an AI-driven environment.

Key Details

• New Segments (Effective FY27):
• Agents and Infra: Includes Microsoft Cloud, productivity and server licensing (Azure, Microsoft 365, GitHub, Industry Solutions).
• Devices and Consumer: Includes Windows, XBOX, and a consolidated advertising business (Search, LinkedIn Marketing Solutions).
• Replaced Segments: This new structure replaces the previous three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
• Restated Outlook: Microsoft provided a mechanically adjusted outlook for Q1 FY27 under the new structure, with expected revenue of $75.15B - $75.75B for Agents and Infra, and $14.7B - $15.2B for Devices and Consumer.