Microsoft has implemented a significant organizational change in its financial reporting, introducing a new segment for Microsoft 365 Commercial products and cloud services, which aims to clarify revenue recognition and better reflect current branding.
By moving Enterprise Mobility and Security (EMS) and PowerBI revenue into M365 Commercial, Microsoft aims for its Azure revenue reporting to more accurately depict consumption growth, addressing market concerns about spending in AI infrastructure.
The reorganization affects multiple revenue projections, with expected drops in the Intelligent Cloud segment from $28.6-$28.9 billion to $23.8-$24.1 billion and in More Personal Computing revenue from $14.9-$15.3 billion to $12.25-$12.65 billion.
New metrics introduced by Microsoft for investors now focus on specific growth areas such as Office Commercial, M365 Commercial, Dynamics, and Azure services, providing a clearer insight into the company’s performance.
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