Revenue increased $3.8 billion or 14%, driven by growth across each of our segments. Intelligent Cloud revenue increased, driven by server products and cloud services. Productivity and Business Processes revenue increased, driven by Office and LinkedIn. More Personal Computing revenue increased, driven by Windows and Surface.
Gross margin increased $2.9 billion or 16%, driven by growth across each of our segments. Gross margin percentage increased, driven by gross margin percentage improvement in More Personal Computing and Productivity and Business Processes, and favorable segment sales mix. Gross margin included a 5 percentage point improvement in commercial cloud, primarily from Azure.
Operating income increased $2.0 billion or 25%, driven by growth across each of our segments.
Key changes in expenses were:
Cost of revenue increased $901 million or 10%, driven by growth in commercial cloud and Surface.
Research and development expenses increased $601 million or 16%, driven by investments in cloud engineering, Gaming, GitHub, and LinkedIn.
Sales and marketing expenses increased $230 million or 5%, driven by investments in LinkedIn, GitHub, and commercial sales capacity.
Revenue, gross margin, and operating income included an unfavorable foreign currency impact of 2%. Sales and marketing expenses included a favorable foreign currency impact of 2%.