Revenue increased $2.6 billion or 12%, driven by growth in Productivity and Business Processes and Intelligent Cloud. Productivity and Business Processes revenue increased, driven by the acquisition of LinkedIn and higher revenue from Office. Intelligent Cloud revenue increased, primarily due to higher revenue from server products and cloud services. More Personal Computing revenue was relatively unchanged, with lower revenue from phones offset by higher revenue from Search advertising and Surface.
Operating income increased $993 million or 15%, primarily due to higher gross margin, offset in part by an increase in sales and marketing expenses and research and development expenses. Operating income included an operating loss of $294 million related to LinkedIn, including $372 million of amortization of intangible assets. Key changes in expenses were:
• Cost of revenue increased $434 million or 6%, mainly due to growth in our commercial cloud and LinkedIn, offset in part by a reduction in phone and Gaming cost of revenue.
• Sales and marketing expenses increased $594 million or 18%, primarily due to LinkedIn expenses.
• Research and development expenses increased $468 million or 15%, primarily due to LinkedIn expenses and investments in cloud engineering.
• General and administrative expenses increased $121 million or 12%, primarily due to LinkedIn expenses.