Caterpillar Inc. stock research
FY2025 Q3
Caterpillar (CAT) Gross Margin — Quarter Ended Sep 30, 2025
Revenue increased from both the prior quarter and the same quarter last year, while gross profit remained stable year over year but rose from the prior quarter. Gross margin weakened compared to both periods, as cost of revenue grew faster than revenue.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue increased from both the prior quarter and the same quarter last year, while gross profit remained stable year over year but rose from the prior quarter. Gross margin weakened compared to both periods, as cost of revenue grew faster than revenue.
- Revenue growth outpaced the increase in cost of revenue compared to the prior quarter, yet gross margin still declined slightly, indicating that the cost structure absorbed a larger share of revenue.
- Compared to the prior quarter, revenue was higher and gross profit improved, but gross margin was lower. Versus the same quarter a year ago, revenue was higher but gross profit was unchanged, resulting in a lower gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
33.8%
Gross profit
$6.0B
Revenue
$17.6B
Cost of revenue
$11.7B
Quarter-over-quarter change
-1.0 pts
Year-over-year change
-3.7 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 |
|---|---|---|---|---|
| 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% |
| Sep 30, 2025 | $17.6B | $6.0B | $11.7B | 33.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
-1.0 pts
Year-over-year change
Sep 30, 2024
-3.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Revenue growth outpaced the increase in cost of revenue compared to the prior quarter, yet gross margin still declined slightly, indicating that the cost structure absorbed a larger share of revenue.
Compared to the prior quarter, revenue was higher and gross profit improved, but gross margin was lower. Versus the same quarter a year ago, revenue was higher but gross profit was unchanged, resulting in a lower gross margin.
Monitor whether cost of revenue continues to increase as a proportion of revenue, as this has compressed gross margin for two consecutive comparative periods.