Microsoft updates segment reporting structure for fiscal 2027

Microsoft Corporation (NASDAQ:MSFT) released supplemental presentation materials on Wednesday that provide investors with restated historical financial data and a revised reporting structure for Fiscal Year 2027.

The company restructured its segment reporting to align with how executive management evaluates operations and allocates capital, with a focus on integrated AI infrastructure, Copilot platform adoption, and cloud productivity. The filing includes restated historical quarterly and annual figures under the new framework.

Microsoft’s three primary business segments—Productivity and Business Processes, Intelligent Cloud, and More Personal Computing—remain in place, but specific revenue streams and product lines were realigned within each division.

The Intelligent Cloud segment now consolidates all core cloud platform computing, Azure AI consumption services, and enterprise silicon infrastructure, including Azure Maia and Cobalt deployments, under Azure & AI Infrastructure. Enterprise Mobility + Security metrics were adjusted to separate cloud infrastructure consumption from productivity seating.

The Productivity and Business Processes segment now integrates Copilot subscriptions directly with Microsoft 365 Commercial Cloud revenue streams. Nuance-related specialized vertical AI services were reallocated to better reflect enterprise workflow offerings in Dynamics 365 and Microsoft 365.

The More Personal Computing segment refined its reporting around Surface hardware, Windows OEM, and Xbox content and services.

Microsoft reported FY26 full-year revenue of $331.8 billion, up 18% year-over-year and 16% in constant currency. Operating income reached $155.2 billion, representing an operating margin of approximately 46.8%. Microsoft Cloud revenue hit a run-rate of $59.3 billion in Q4 FY26, up 27% year-over-year.

The company’s commercial remaining performance obligation backlog stood at $678.0 billion at the end of FY26, up 84% year-over-year.

For Q1 FY27, Microsoft projected Intelligent Cloud revenue between $40.95 billion and $41.25 billion, with Azure growth expected at approximately 45% in constant currency. The Productivity & Business Processes segment is expected to continue mid-to-high double-digit growth driven by enterprise Copilot adoption.