Microsoft reveals Azure cloud sales in financial reporting shift

Microsoft disclosed its Azure cloud sales on a quarterly basis for the first time, disclosing the growth in direct competition with Amazon and Alphabet's Google. In the most recent quarter, Azure earned $29.4 billion, while in its fiscal year ending June 30, it achieved $101.9 billion. Microsoft trails Amazon, which recorded $42.2 billion in cloud sales for its latest quarter, but surpasses Google, reporting $24.8 billion in cloud sales for the same period.

Previously, Microsoft had shared Azure's growth rate but not its sales figures. The company is consolidating its reporting segments into two: Agents and Infra, which encompasses cloud computing services, sales from AI-based software, and traditional business software revenue. The Devices and Consumer segment will cover Windows operating system, Xbox gaming unit, and advertising sales across Bing search engine and LinkedIn.

Microsoft CEO Satya Nadella emphasized that AI is transforming the company's technology, operations, product offerings, and business models. In the company's update to its investor forecast, Microsoft slightly reduced its Azure revenue forecast but attributed this change to the reclassification of GitHub sales from Azure to its M365 Cloud software businesses, which primarily includes advanced AI offerings.

Microsoft's overall forecast for the current quarter remains unchanged. The company remains a major cloud computing provider to OpenAI, which previously solely utilized Microsoft's services for OpenAI model training. Microsoft's shares increased by approximately 1.4% in after-hours trading following the announcement of these changes.