Caterpillar Inc. stock research
FY2025 Q1
Caterpillar (CAT) Gross Margin — Quarter Ended Mar 31, 2025
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year. The gross margin improved slightly from the prior quarter but weakened relative to a year ago, as cost of revenue declined less proportionally than revenue in both comparisons.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year. The gross margin improved slightly from the prior quarter but weakened relative to a year ago, as cost of revenue declined less proportionally than revenue in both comparisons.
- The most observable driver is the relationship between revenue and cost of revenue: revenue dropped while cost of revenue dropped less, compressing gross profit. The narrower decline in cost of revenue relative to revenue is the strongest factor affecting margin direction.
- Compared to the prior quarter, gross margin improved slightly as cost of revenue fell at a faster pace than revenue. Compared to the same quarter last year, gross margin weakened as revenue declined while cost of revenue fell by a smaller proportion.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
37.1%
Gross profit
$5.3B
Revenue
$14.2B
Cost of revenue
$9.0B
Quarter-over-quarter change
+0.7 pts
Year-over-year change
-1.8 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 |
|---|---|---|---|---|
| Jun 30, 2024 | $16.7B | $6.5B | $10.2B | 39.2% |
| Sep 30, 2024 | $16.1B | $6.0B | $10.1B | 37.5% |
| Dec 31, 2024 | $16.2B | $5.9B | $10.3B | 36.3% |
| Mar 31, 2025 | $14.2B | $5.3B | $9.0B | 37.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
+0.7 pts
Year-over-year change
Mar 31, 2024
-1.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver is the relationship between revenue and cost of revenue: revenue dropped while cost of revenue dropped less, compressing gross profit. The narrower decline in cost of revenue relative to revenue is the strongest factor affecting margin direction.
Compared to the prior quarter, gross margin improved slightly as cost of revenue fell at a faster pace than revenue. Compared to the same quarter last year, gross margin weakened as revenue declined while cost of revenue fell by a smaller proportion.
Monitor the trend in cost of revenue relative to revenue, as its stickiness has been a key factor in margin changes.