Adobe Inc. stock research
FY2025 Q1
Adobe (ADBE) Gross Margin — Quarter Ended Feb 28, 2025
Revenue, gross profit, and cost of revenue all increased compared to both the prior quarter and the same quarter last year. Gross margin improved slightly from the prior quarter and was higher than the year-ago quarter.
Gross margin takeaway
Quarter ended Feb 28, 2025 · FY2025 Q1
Revenue, gross profit, and cost of revenue all increased compared to both the prior quarter and the same quarter last year. Gross margin improved slightly from the prior quarter and was higher than the year-ago quarter.
- The strongest observable margin driver is the increase in gross profit outpacing the increase in cost of revenue, leading to a higher gross margin. This is evident when comparing both the sequential and year-over-year periods.
- Compared to the prior quarter, revenue and gross profit were higher, while cost of revenue also increased, resulting in a slightly improved gross margin. Versus the same quarter last year, all three metrics were higher, with gross margin showing a more notable improvement.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
89.1%
Gross profit
$5.1B
Revenue
$5.7B
Cost of revenue
$622.0M
Quarter-over-quarter change
+0.1 pts
Year-over-year change
+0.5 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| May 31, 2024 | $5.3B | $4.7B | $598.0M | 88.7% |
| Aug 30, 2024 | $5.4B | $4.9B | $554.0M | 89.8% |
| Nov 29, 2024 | $5.6B | $5.0B | $616.0M | 89.0% |
| Feb 28, 2025 | $5.7B | $5.1B | $622.0M | 89.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Nov 29, 2024
+0.1 pts
Year-over-year change
Mar 1, 2024
+0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the increase in gross profit outpacing the increase in cost of revenue, leading to a higher gross margin. This is evident when comparing both the sequential and year-over-year periods.
Compared to the prior quarter, revenue and gross profit were higher, while cost of revenue also increased, resulting in a slightly improved gross margin. Versus the same quarter last year, all three metrics were higher, with gross margin showing a more notable improvement.
Monitor the trend in cost of revenue relative to revenue, as its growth rate could influence future gross margin stability.