Microsoft 8-K
Guidance reaffirmed
Reporting shifts to Agents and Infra and Devices and Consumer, recasting history and Q1 segment outlook; total-company guidance reaffirmed.
Filed 2026-09-02 16:30 ET
- 7.01 Regulation FD Disclosure
- 9.01 Financial Statements and Exhibits
Summary
FY27 segment reporting changes and Q1 outlook recast. Starting in FY2027, Microsoft will report two segments—Agents and Infra, and Devices and Consumer—in place of its current three. The presentation recasts historical results and product and service metrics to match the new structure; it says the FY27 Q1 outlook adjustments are mechanical, with no change to the total-company outlook.
Key Figures
Restated historical financials under the new segment structure:
| Metric | FY2026 | FY2025 | Y/Y |
|---|---|---|---|
| Revenue — total | $332B | $282B | 17.8% |
| Operating income — total | $155B | $129B | 20.8% |
| Revenue — Agents and Infra | $268B | $219B | 22.6% |
| Operating income — Agents and Infra | $136B | $111B | 23.1% |
| Revenue — Devices and Consumer | $63.7B | $62.9B | 1.22% |
| Operating income — Devices and Consumer | $18.9B | $17.7B | 6.54% |
- The recast moves GitHub cloud, other developer cloud services and Security Copilot into Microsoft 365 cloud; Healthcare and Life Sciences cloud into Industry solutions; and LinkedIn Marketing Solutions and Premium Subscriptions into Search and advertising. Historical results are presented on the updated basis.
Guidance
FY27 Q1 outlook, adjusted to the new reporting structure:
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Total-company revenue | Q1 FY2027 | $89.85B-$90.95B; foreign currency reduces revenue growth by <1 point | $89.85B-$90.95B | Reaffirmed |
| Agents and Infra revenue | Q1 FY2027 | $75.15B-$75.75B; foreign currency reduces growth by ≈1 point | — | — |
| Devices and Consumer revenue | Q1 FY2027 | $14.7B-$15.2B; no meaningful foreign currency impact | — | — |
| Cost of revenue | Q1 FY2027 | $29.6B-$29.8B | $29.6B-$29.8B | Reaffirmed |
| Operating expenses | Q1 FY2027 | $16.8B-$16.9B | $16.8B-$16.9B | Reaffirmed |
| Other income and expense | Q1 FY2027 | ≈$(100)M, excluding any impact from investments in OpenAI | ≈$(100)M, excluding any impact from investments in OpenAI | Reaffirmed |
| Operating margin | Q1 FY2027 | Relatively flat Y/Y | Relatively flat Y/Y | Reaffirmed |
| Effective tax rate | Q1 FY2027 | ≈20% | ≈20% | Reaffirmed |
| Capital expenditures | Q1 FY2027 | >$50B, including the impact of the useful life update | >$50B, including the impact of the useful life update | Reaffirmed |
| Commercial bookings | Q1 FY2027 | Healthy growth on a growing expiry base, adjusted for prior-year OpenAI contracts | Same | Reaffirmed |
| Microsoft Cloud gross margin percentage | Q1 FY2027 | Relatively stable Q/Q | Relatively stable Q/Q | Reaffirmed |
| Azure revenue | Q1 FY2027 | Growth of 44%-45% in constant currency | — | — |
| Microsoft 365 commercial cloud revenue | Q1 FY2027 | Growth of ≈17% in constant currency; ≈18% when adjusting for prior-year in-period revenue recognition | — | — |
| Microsoft 365 consumer cloud revenue | Q1 FY2027 | Growth in the mid-teens | Growth in the mid-teens | Reaffirmed |
| Productivity and server licensing revenue | Q1 FY2027 | Decline in the low-single digits | — | — |
| Industry solutions cloud revenue | Q1 FY2027 | Growth in the high-single digits | — | — |
| Search and advertising revenue, excluding traffic acquisition costs | Q1 FY2027 | Growth in the mid- to high-single digits | — | — |
| XBOX revenue | Q1 FY2027 | No change to outlook | Content and services decline in the mid-single digits; hardware decline Y/Y | Reaffirmed |
| Windows OEM and devices revenue | Q1 FY2027 | No change to outlook | Decline in the low-twenties | Reaffirmed |
Investor Takeaways
- Microsoft’s FY27 Q1 results will be the first reported under the new structure; compare them with the recast historical baseline and adjusted segment outlook.
The summary is written by an AI model reading the filing.
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