Microsoft updates segment reporting structure for fiscal 2027

Microsoft Corporation has announced a revised segment reporting structure for Fiscal Year 2027 to align with executive management's focus on integrated AI infrastructure, Copilot platform adoption, and cloud productivity. While retaining its three main divisions—Productivity and Business Processes, Intelligent Cloud, and More Personal Computing—the company realigned core components. Intelligent Cloud now consolidates Azure AI consumption and enterprise silicon such as Azure Maia and Cobalt, while Copilot subscriptions are integrated directly into Microsoft 365 Commercial Cloud revenue streams. Alongside the structural changes, Microsoft delivered strong financial metrics, reporting FY26 revenue of $331.8 billion (up 18% year-over-year) and operating income of $155.2 billion, reflecting an operating margin of 46.8%. The commercial remaining performance obligation backlog climbed 84% to $678.0 billion. For Q1 FY27, Microsoft projects Intelligent Cloud revenue between $40.95 billion and $41.25 billion with Azure constant-currency growth near 45%, while committing approximately $175 billion in FY27 capital expenditures to expand datacenter and AI computing capacity.