Caterpillar Inc. stock research
FY2025 Q2
Caterpillar (CAT) Gross Margin — Quarter Ended Jun 30, 2025
Revenue was higher than the prior quarter but slightly lower than the same quarter a year ago. Gross profit increased from the prior quarter but decreased from a year ago, while cost of revenue rose compared to both periods, resulting in a gross margin that weakened from both the prior quarter and the year-ago quarter.
Gross margin takeaway
Quarter ended Jun 30, 2025 · FY2025 Q2
Revenue was higher than the prior quarter but slightly lower than the same quarter a year ago. Gross profit increased from the prior quarter but decreased from a year ago, while cost of revenue rose compared to both periods, resulting in a gross margin that weakened from both the prior quarter and the year-ago quarter.
- The gross margin weakened sequentially and year-over-year, driven by a larger increase in cost of revenue relative to revenue growth. The strongest observable driver is the rise in cost of revenue, which outpaced revenue changes in both comparisons.
- Compared to the prior quarter, revenue and gross profit were higher, but gross margin was lower due to a proportionally larger increase in cost of revenue. Compared to the same quarter a year ago, revenue was slightly lower, gross profit was lower, and gross margin weakened as cost of revenue increased while revenue declined.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
34.8%
Gross profit
$5.8B
Revenue
$16.6B
Cost of revenue
$10.8B
Quarter-over-quarter change
-2.3 pts
Year-over-year change
-4.4 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 |
|---|---|---|---|---|
| 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% |
| Jun 30, 2025 | $16.6B | $5.8B | $10.8B | 34.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2025
-2.3 pts
Year-over-year change
Jun 30, 2024
-4.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin weakened sequentially and year-over-year, driven by a larger increase in cost of revenue relative to revenue growth. The strongest observable driver is the rise in cost of revenue, which outpaced revenue changes in both comparisons.
Compared to the prior quarter, revenue and gross profit were higher, but gross margin was lower due to a proportionally larger increase in cost of revenue. Compared to the same quarter a year ago, revenue was slightly lower, gross profit was lower, and gross margin weakened as cost of revenue increased while revenue declined.
Monitor the trajectory of cost of revenue relative to revenue, as its growth has been a key factor in margin compression.