Microsoft revamps reporting on business units, offers clarity on AI benefits – The Hindu

The changes led to a restatement of revenue growth at these divisions for the last fiscal year and a revision to its forecast for the September quarter [File]
| Photo Credit: AP

Microsoft on Wednesday restructured how it reports results for its business units, moving some search and news advertising revenue under the Azure cloud-computing unit as the tech giant looks to offer investors a clearer picture on AI contributions.

The company said it was also moving revenue from the AI and speech technology services Nuance to its productivity business, which is home to the Office suite of apps, including Word and PowerPoint.

The changes led to a restatement of revenue growth at these divisions for the last fiscal year and a revision to its forecast for September quarter.

The rejig comes as big tech companies, including Microsoft, face investor pressure to show that the billions of dollars they have been investing in AI would pay off.

(Unravel the complexities of our digital world on The Interface podcast, where business leaders and scientists share insights that shape tomorrow’s innovation. The Interface is also available on YouTube, Apple Podcasts and Spotify.)

The company reported slowing growth in its cloud business in July, but had said it would accelerate in the second half of fiscal 2025.

The company now expects intelligent cloud revenue to be between $23.80 billion and $24.10 billion, compared with its prior expectations of $28.6 billion and $28.9 billion.

Microsoft also cut quarterly forecast for its more personal computing segment to between $12.25 billion and $12.65, compared with its earlier expectation of $14.9 billion and $15.3 billion.

However, it raised productivity and business processes outlook to between $27.75 billion and $28.05 billion, compared with $20.3 billion and $20.6 billion.