Microsoft restructures into two segments to align reporting with AI strategy

Microsoft announced in a September 3 regulatory filing that it will overhaul its financial reporting structure beginning in fiscal 2027, consolidating three reportable segments into two: Agents and Infra, and Devices and Consumer. The new structure reflects how the company operates and allocates resources as artificial intelligence increasingly cuts across its business units. The Agents and Infra segment combines enterprise applications including Microsoft 365 and GitHub with Azure infrastructure services, while Devices and Consumer encompasses search and advertising, Xbox, Windows OEM and devices. The company will separately disclose Azure revenue growth, Microsoft 365 commercial cloud revenue growth, and industry solutions cloud growth, providing investors with new quarterly transparency into major business lines. The restructuring does not change Microsoft's fiscal first-quarter outlook or capital expenditure guidance, which exceeds $50 billion for the quarter.

1. Microsoft filed the reorganization plan on Wednesday, September 3, 2026, effective beginning fiscal 2027.
2. The company moves from three reportable segments to two: Agents and Infra, and Devices and Consumer.
3. Agents and Infra combines Microsoft 365, GitHub and Azure infrastructure; Devices and Consumer includes search and advertising, Xbox, Windows OEM and devices.
4. GitHub cloud services and Security Copilot move from Azure into the Microsoft 365 commercial cloud segment.
5. LinkedIn Marketing Solutions and LinkedIn Premium subscriptions will be reported within search and advertising.
6. Microsoft will separately disclose Azure revenue growth, Microsoft 365 commercial cloud revenue growth and industry solutions cloud growth.
7. First-quarter revenue guidance remains $89.85 billion to $90.95 billion.
8. CEO Satya Nadella described the shift as reflecting AI as a profound technology blurring traditional product boundaries.