A. O. Smith Corporation stock research
FY2025 Q3
A. O. Smith (AOS) Gross Margin — Quarter Ended Sep 30, 2025
Revenue and gross profit both decreased from the prior quarter but increased compared to the same quarter last year. Gross margin weakened sequentially but improved year-over-year, reflecting a mixed performance relative to cost of revenue changes.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue and gross profit both decreased from the prior quarter but increased compared to the same quarter last year. Gross margin weakened sequentially but improved year-over-year, reflecting a mixed performance relative to cost of revenue changes.
- The strongest observable margin driver is the year-over-year improvement in gross margin, supported by gross profit growing faster than revenue relative to the prior year. This indicates a favorable relationship between revenue and cost of revenue over the longer-term comparison.
- Compared to the immediately preceding quarter, revenue and gross profit were lower, and gross margin weakened. Compared to the same quarter one year earlier, revenue and gross profit were higher, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
38.7%
Gross profit
$364.5M
Revenue
$942.5M
Cost of revenue
$578.0M
Quarter-over-quarter change
-0.6 pts
Year-over-year change
+1.3 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 |
|---|---|---|---|---|
| Dec 31, 2024 | $912.4M | $338.1M | $574.3M | 37.1% |
| Mar 31, 2025 | $963.9M | $375.4M | $588.5M | 38.9% |
| Jun 30, 2025 | $1.0B | $397.1M | $614.2M | 39.3% |
| Sep 30, 2025 | $942.5M | $364.5M | $578.0M | 38.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
-0.6 pts
Year-over-year change
Sep 30, 2024
+1.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the year-over-year improvement in gross margin, supported by gross profit growing faster than revenue relative to the prior year. This indicates a favorable relationship between revenue and cost of revenue over the longer-term comparison.
Compared to the immediately preceding quarter, revenue and gross profit were lower, and gross margin weakened. Compared to the same quarter one year earlier, revenue and gross profit were higher, and gross margin improved.
Monitor the allowance for credit losses, which increased from the prior year-end, as it may affect future revenue recognition and profitability.