Microsoft reveals Azure cloud sales in financial reporting shift

Microsoft disclosed its Azure cloud computing unit's sales on a quarterly basis for the first time on September 2, allowing for a direct comparison with top rivals Amazon.com and Alphabet's Google. Azure recorded $29.4 billion (S$37.4 billion) in sales for its most recently ended quarter and $101.9 billion in sales for its fiscal year ending June 30.

These figures place Microsoft behind Amazon, with cloud sales of $42.2 billion in the most recent quarter, but ahead of Google, which reported $24.8 billion in cloud sales in its most recent quarter. Previously, Microsoft reported Azure's growth rate but not its sales figures. The change will see Microsoft consolidate its reporting segments from three to two: "Agencies and Infra," encompassing Azure, AI-based software sales, and traditional business software revenue, and "Devices and Consumer," including Windows, Xbox, and advertising sales across Bing search engine and LinkedIn.

Microsoft CEO Satya Nadella stated that AI represents a significant shift in technology and business, altering what the company builds and operates, and blurring product boundaries. Microsoft also adjusted its Azure revenue forecast for the current quarter, slightly lowering it, but explained that this adjustment resulted from moving some GitHub sales, previously grouped with Azure, to its M365 Cloud software businesses, which primarily includes advanced AI offerings.

Microsoft's overall outlook for the current quarter remains unchanged. The company's shares rose approximately 1.4% in after-hours trading on September 2 following the disclosure of these changes.