Applied Digital Corporation stock research
FY2025 Q2
Applied Digital (APLD) Gross Margin — Quarter Ended Nov 30, 2024
Revenue and gross profit both improved compared with the prior quarter and the same quarter last year. Gross margin also strengthened against both periods, rising as cost of revenue increased less than revenue on a sequential basis and declined year over year.
Gross margin takeaway
Quarter ended Nov 30, 2024 · FY2025 Q2
Revenue and gross profit both improved compared with the prior quarter and the same quarter last year. Gross margin also strengthened against both periods, rising as cost of revenue increased less than revenue on a sequential basis and declined year over year.
- The gross margin improvement was driven by a year-over-year reduction in cost of revenue alongside higher revenue, and a sequential increase in revenue with cost of revenue flat. These shifts point to a more favorable spread between revenue and cost of revenue.
- Compared to the prior quarter, gross margin was higher, supported by higher revenue while cost of revenue remained unchanged. Compared to the same quarter one year earlier, gross margin improved significantly as revenue was lower but cost of revenue declined more sharply.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
37.3%
Gross profit
$13.5M
Revenue
$36.2M
Cost of revenue
$22.7M
Quarter-over-quarter change
+2.6 pts
Year-over-year change
+7.9 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 |
|---|---|---|---|---|
| Feb 29, 2024 | $43.3M | -$3.7M | $47.1M | -8.6% |
| May 31, 2024 | $14.7M | $10.1M | $4.6M | 68.8% |
| Aug 31, 2024 | $34.8M | $12.1M | $22.7M | 34.7% |
| Nov 30, 2024 | $36.2M | $13.5M | $22.7M | 37.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Aug 31, 2024
+2.6 pts
Year-over-year change
Nov 30, 2023
+7.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improvement was driven by a year-over-year reduction in cost of revenue alongside higher revenue, and a sequential increase in revenue with cost of revenue flat. These shifts point to a more favorable spread between revenue and cost of revenue.
Compared to the prior quarter, gross margin was higher, supported by higher revenue while cost of revenue remained unchanged. Compared to the same quarter one year earlier, gross margin improved significantly as revenue was lower but cost of revenue declined more sharply.
Monitor whether cost of revenue can remain stable or decline while revenue continues to grow, as this pattern has been the primary factor in margin expansion.