Microsoft is overhauling the way it reports its financial performance, placing artificial intelligence at the core of its operating structure as the technology giant seeks to give investors a clearer view of its AI-driven business model.
The company announced on September 2 that it will move from three reporting segments to two beginning in fiscal year 2027. The new structure will consist of Agents and Infra and Devices and Consumer, reflecting how Microsoft increasingly manages and measures its operations around AI, cloud infrastructure and digital services.
According to the company's announcement, the changes are intended to align financial disclosures with Microsoft's evolving business priorities and provide greater transparency into key growth engines including Azure, Microsoft 365, industry-specific cloud offerings and advertising.
New reporting model reflects AI-first strategy
The restructuring marks one of Microsoft's most significant reporting changes in recent years.
Under the new framework, Agents and Infra will combine several of Microsoft's enterprise-focused businesses, including cloud computing, productivity software, developer tools, security services, consulting and support operations.
The company is also adjusting how certain revenues are classified within the segment. Key changes include:
- Consolidation of cloud, productivity and developer businesses under a single reporting structure.
- Reclassification of selected GitHub revenues.
- Movement of certain developer and healthcare cloud revenues across business categories.
- Creation of a dedicated Industry Solutions grouping.
- Alignment of reporting metrics with Microsoft's AI-focused operating model.
Microsoft said the new format will help stakeholders better understand the economics and performance of its enterprise technology portfolio.
Windows, Xbox and advertising grouped together
The second segment, Devices and Consumer, will bring together Microsoft's consumer-facing businesses. The division will include:
- Windows
- Xbox
- Search and advertising operations
- LinkedIn Marketing Solutions
- Premium subscription businesses
According to the company, the revised structure will offer investors a more unified view of consumer demand trends, advertising performance and the broader economics of Microsoft's consumer ecosystem.
The change also reflects the growing integration of AI capabilities across consumer products and services.
Focus shifts from products to AI ecosystems
The reporting overhaul signals how Microsoft increasingly views its business through the lens of AI-powered platforms rather than standalone products.
Over the past two years, the company has embedded AI capabilities across major offerings including Azure, Microsoft 365, developer tools and enterprise software. The new reporting structure groups businesses based on how they operate within Microsoft's AI ecosystem rather than traditional product categories.
The move also gives investors greater visibility into businesses that are expected to benefit most from rising enterprise spending on AI infrastructure and software.
Investor transparency becomes a priority
Microsoft said the revised reporting framework is designed to provide clearer insight into the performance of major franchises and improve comparability across its expanding portfolio.
The changes come as investors increasingly scrutinise how large technology companies are monetising AI investments and generating returns from substantial spending on data centres, cloud infrastructure and AI models.
By reorganising around Agents and Infra and Devices and Consumer, Microsoft is positioning AI as the central organising principle of its business operations, financial reporting and long-term growth strategy.
The new reporting structure will take effect from fiscal year 2027, giving investors a new lens through which to evaluate the company's cloud, software and consumer businesses as AI becomes an increasingly important driver of revenue and profitability.