Microsoft has announced earnings for the financial year Q3 2016, in which it reported $20.5 billion in revenue and $3.8 billion in net income. Surface revenues are up again, which is $1.1 billion for the quarter, up 61% from the same quarter last year. Phone revenue continues to decline, which is down 46% YoY. Microsoft sold only 2.3 million Lumia devices in the quarter, compared to 8.6 million in the same period last year, a massive 73% drop.
Surface revenue increased 61%, driven by Surface Pro 4 and Surface Book sales and Windows OEM revenue outperformed the PC market but declined 2%. Office commercial products and cloud services revenue grew 7%, driven by 63% Office 365 revenue growth. Office consumer products and cloud services revenue grew 6% and Office 365 consumer subscribers increased to 22.2 million.
Server products and cloud services revenue increased 5% and Azure revenue grew 120% with usage of Azure compute and Azure SQL database more than doubling year-over-year.