Microsoft Restructures Reporting Segments, Revises Guidance

On Wednesday, Microsoft Corporation MSFT disclosed segment restructuring and revised guidance.

The company stated it will now report the revenue from the commercial components of Microsoft 365 in the Productivity and Business Processes (PBP) segment.

Also, the company will now report the cloud portion of Microsoft 365 commercial as “Microsoft 365 Commercial Cloud” and the on-premises part as “Microsoft 365 Commercial products”.

In addition, the company shifted Copilot Pro revenue to “Search and news advertising” in the More Personal Computing (MPC) segment, renaming it as “Microsoft 365 Consumer products and cloud services.”

Also, Microsoft stated that Search and news advertising revenue moved to Azure in the Intelligent Cloud (IC) segment, which is now part of Microsoft Cloud metrics. Moreover, Nuance Enterprise revenue is moved to “Dynamics products and cloud services” in PBP.

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Q1 Outlook Update: The company revised guidance for IC revenue to $23.80 billion-$24.10 billion (from $28.6 billion-$28.9 billion prior), Personal Computing revenue to $12.25 billion-$12.65 billion (from $14.9 billion to $15.3 billion) and, PBP revenue to $27.75 billion-$28.05 billion (from $20.3 billion-$20.6 billion).

Microsoft expects Azure revenue to decline by 1-2 percentage points sequentially, with growth around 33% in constant currency.

In July, Microsoft reported fourth-quarter revenue of $64.7 billion, beating a Street consensus estimate of $64.36 billion and earnings per share of $2.95, exceeding a Street consensus estimate of $2.92.

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Price Action: MSFT shares are down 0.13% at $424.80 at last check Thursday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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