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Intelligent Cloud

Revenue increased $4.6 billion or 21%.

Server products and cloud services revenue increased $4.8 billion or 24% driven by Azure and other cloud services. Azure and other cloud services revenue grew 31% driven by growth in our consumption-based services. Server products revenue increased 6% driven by continued demand for our hybrid solutions, including Windows Server and SQL Server running in multi-cloud environments.

Enterprise and partner services revenue decreased $186 million or 9% on a strong prior year comparable for Enterprise Support Services.

Operating income increased $3.0 billion or 32%.

Gross margin increased $3.1 billion or 20% driven by growth in Azure. Gross margin percentage decreased slightly. Excluding the impact of the change in accounting estimate, gross margin percentage increased slightly primarily driven by improvement in Azure, inclusive of scaling our AI infrastructure, offset in part by sales mix shift to Azure.

Operating expenses increased $49 million or 1% driven by investments in Azure.

IMPORTANT NOTICE TO USERS (summary only, click here  for full text of notice); All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. We do not endorse third-party information. All information speaks as of the last fiscal quarter or year for which we have filed a Form 10-K or 10-Q, or for historical information the date or period expressly indicated in or with such information. We undertake no duty to update the information. Forward-looking statements are subject to risks and uncertainties described in our  Forms 10-Q and 10-K.
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