Microsoft Corporation on Wednesday filed a Form 8-K current report that recasts its business under two segments, Agents and Infra and Devices and Consumer. The filing said Microsoft Cloud revenue increased 27% to $214.4 billion in fiscal year 2026 compared with fiscal year 2025.
The company said it announced the reporting change in September 2026 so its segments would match how it manages the business. Beginning in fiscal year 2027, the information used to allocate resources and assess performance reflects the new structure. Segment figures in the filing have been recast to conform to that approach.
Agents and Infra brings together applications and agents, what the company called its multi-model system, and Azure infrastructure. The segment primarily includes Azure, the company’s cloud services; Microsoft 365 cloud; productivity and server licensing; industry solutions; and frontier and support services. Devices and Consumer primarily includes search and advertising, XBOX, and Windows licenses sold to device makers plus devices such as Surface.
Microsoft Cloud revenue is revenue from Azure, Microsoft 365 commercial cloud, and industry solutions cloud, the filing said. Commercial remaining performance obligation increased 84% to $678 billion. The company describes that obligation as the commercial share of unearned revenue and amounts that will be invoiced and recognized as revenue in future periods.
Azure revenue increased 40%, according to the filing. Microsoft 365 commercial cloud revenue increased 18%, and Microsoft 365 consumer cloud revenue increased 28%. Industry solutions cloud revenue increased 12%.
Search and advertising revenue excluding traffic acquisition costs increased 14%. XBOX content and services revenue decreased 5%. Windows OEM and devices revenue decreased 1%. OEM means original equipment manufacturers, companies that pre-install Windows on the devices they sell.
Microsoft said it updated growth metrics in the first quarter of fiscal year 2027 in connection with the segment change. Those updates adjust revenue growth measures for Azure, Microsoft 365 commercial cloud, and search and advertising for the movement of certain components. The company also created an industry solutions cloud metric that combines Dynamics 365 with LinkedIn Talent Solutions, LinkedIn Sales Solutions, and Healthcare and Life Sciences cloud, and it included paid GitHub seats in its Microsoft 365 commercial seat growth metric.
The company removed Microsoft 365 consumer subscribers as a metric in the first quarter of fiscal year 2026.
The filing describes a long-term strategic partnership with OpenAI originally established in 2019 and extended in October 2025 and April 2026. Microsoft said it is a major investor in OpenAI and will continue to receive revenue-sharing payments. It said it holds rights to OpenAI’s intellectual property, including models and infrastructure, for integration into its products.
Microsoft said investments in cloud and artificial intelligence infrastructure and in devices will continue to increase operating costs and may decrease operating margins. The company said it continues to identify and evaluate opportunities to expand datacenter locations and increase server capacity, particularly given growing demand for artificial intelligence services. Fluctuations in the U.S. dollar relative to certain foreign currencies increased reported revenue in fiscal year 2026 and did not have a material impact on reported expenses from international operations, the filing said.