Microsoft will release quarterly results after Wednesday's closing bell, and with it comes a new reporting structure the company hopes will provide more visibility into its big cloud computing business. Announced in August , and reported this way for the first time this week, Microsoft decided to change which revenue streams fall under its three main reporting segments. The shift, which most impacts the company's Azure cloud unit, comes as Wall Street watches each quarter for signs that all the company's artificial intelligence investments are paying off.
The two other major clouds — Amazon Web Services (AWS) and Alphabet 's Google — face a similar level of scrutiny in this new age of AI. In Microsoft's upcoming report, search and news advertising revenue will move from the More Personal Computing (PCP) segment into the Intelligent Cloud (IC) segment. Remember, IC houses Azure and other cloud services.
The move gives investors more clarity into actual usage of its AI-adjacent offerings because search and ads are based on engagement, rather than stable income streams like subscriptions that are housed within PCP. These subscriptions include those from Microsoft's productivity software. Another change includes Microsoft removing revenue from Power Business Intelligence data analytics and the Enterprise Mobility and Security group of products from the IC segment.
With those two moving out, the new Azure figure will "more closely align to consumption," Microsoft said in an in.
