A. O. Smith Corporation stock research
FY2025 Q4
A. O. Smith (AOS) Gross Margin — Quarter Ended Dec 31, 2025
Revenue was nearly unchanged from the same quarter one year earlier, while gross profit increased and cost of revenue decreased, resulting in a higher gross margin. Compared with the immediately preceding quarter, revenue and gross profit were lower, cost of revenue was lower, and gross margin weakened slightly.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2025 Q4
Revenue was nearly unchanged from the same quarter one year earlier, while gross profit increased and cost of revenue decreased, resulting in a higher gross margin. Compared with the immediately preceding quarter, revenue and gross profit were lower, cost of revenue was lower, and gross margin weakened slightly.
- The strongest observable margin driver is the improvement in gross margin relative to the year-ago quarter, as gross profit rose while cost of revenue declined. This contrasts with the sequential quarter where both revenue and gross profit decreased, yet cost of revenue also fell, keeping the margin change modest.
- Compared with the immediately preceding quarter, revenue and gross profit were lower, cost of revenue was lower, and gross margin weakened slightly. Compared with the same quarter one year earlier, revenue was nearly unchanged, gross profit was higher, cost of revenue was lower, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
38.4%
Gross profit
$350.4M
Revenue
$912.5M
Cost of revenue
$562.1M
Quarter-over-quarter change
-0.3 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 |
|---|---|---|---|---|
| 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% |
| Dec 31, 2025 | $912.5M | $350.4M | $562.1M | 38.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
-0.3 pts
Year-over-year change
Dec 31, 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 improvement in gross margin relative to the year-ago quarter, as gross profit rose while cost of revenue declined. This contrasts with the sequential quarter where both revenue and gross profit decreased, yet cost of revenue also fell, keeping the margin change modest.
Compared with the immediately preceding quarter, revenue and gross profit were lower, cost of revenue was lower, and gross margin weakened slightly. Compared with the same quarter one year earlier, revenue was nearly unchanged, gross profit was higher, cost of revenue was lower, and gross margin improved.
Monitor whether the year-over-year improvement in gross margin can be sustained if revenue growth resumes and cost of revenue trends change.