The quarter marks a structural change in how Microsoft reports its finances. The previous three segments, Productivity and Business Processes, Intelligent Cloud and More Personal Computing, are gone, replaced by two: Agents and Infra, and Devices and Consumer. Agents and Infra, which covers Azure, Microsoft 365 commercial and consumer, and server products, generated $76.8 billion, 83 percent of total revenue, up 25 percent. Devices and Consumer, covering Windows, Xbox, Surface and search and advertising, brought in $15.5 billion, down 3 percent.

A practical consequence of the overhaul is that Azure revenue is now disclosed quarterly. It came in at $33.17 billion, up 48 percent year over year. Microsoft Cloud revenue overall was $63.9 billion, up 30 percent, which CFO Amy Hood described as growth accelerating, with results exceeding expectations across revenue, operating income and earnings per share.

The consumer side was far weaker. Windows OEM and devices revenue fell 22 percent, which Microsoft attributes to the prior-year benefit of Windows 10 end of support, OEM inventory drawdowns and a weaker PC market amid high memory prices. Hood expects Windows OEM revenue to decline again next quarter, by around the mid 30s in percent, with declines continuing through the 2027 financial year. Xbox hardware revenue fell 14 percent and content and services, including Game Pass, fell 2 percent, and Microsoft still is not reporting Game Pass subscriber numbers, last disclosed at 34 million more than two years ago.

The results arrived days after Microsoft offered voluntary buyouts to around 60,000 employees, roughly a quarter of its workforce, its second such offer this year, as the company spends heavily on AI. On the earnings call, CEO Satya Nadella framed the company's hybrid AI push for Windows, saying more capable models running locally create an opportunity to make more intelligence effectively unmetered.