Air Products and Chemicals, Inc. stock research
FY2026 Q1
Air Products and Chemicals (APD) Gross Margin — Quarter Ended Dec 31, 2025
Revenue decreased from the prior quarter but increased compared to the same quarter last year. Gross profit moved in line with revenue, resulting in a gross margin that was slightly lower sequentially yet higher year-over-year.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2026 Q1
Revenue decreased from the prior quarter but increased compared to the same quarter last year. Gross profit moved in line with revenue, resulting in a gross margin that was slightly lower sequentially yet higher year-over-year.
- The strongest observable driver is the behavior of cost of revenue, which remained unchanged from the previous quarter while revenue declined, compressing gross profit and margin. Compared to a year ago, revenue grew more than cost of revenue, supporting margin expansion.
- Sequentially, gross margin weakened as revenue dipped while cost of revenue held steady. Year-over-year, gross margin improved because revenue increased at a faster pace than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
32.1%
Gross profit
$995.0M
Revenue
$3.1B
Cost of revenue
$2.1B
Quarter-over-quarter change
-0.2 pts
Year-over-year change
+0.9 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 | $2.9B | $862.3M | $2.1B | 29.6% |
| Jun 30, 2025 | $3.0B | $982.6M | $2.0B | 32.5% |
| Sep 30, 2025 | $3.2B | $1.0B | $2.1B | 32.3% |
| Dec 31, 2025 | $3.1B | $995.0M | $2.1B | 32.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
-0.2 pts
Year-over-year change
Dec 31, 2024
+0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the behavior of cost of revenue, which remained unchanged from the previous quarter while revenue declined, compressing gross profit and margin. Compared to a year ago, revenue grew more than cost of revenue, supporting margin expansion.
Sequentially, gross margin weakened as revenue dipped while cost of revenue held steady. Year-over-year, gross margin improved because revenue increased at a faster pace than cost of revenue.
Monitor whether cost of revenue continues to remain stable relative to revenue changes in upcoming quarters.