Caterpillar Inc. stock research
FY2025 Q4
Caterpillar (CAT) Gross Margin — Quarter Ended Dec 31, 2025
Revenue increased compared to both the prior quarter and the same quarter last year, while gross profit was lower than both periods. Cost of revenue rose more than proportionally, causing gross margin to weaken sequentially and year-over-year.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2025 Q4
Revenue increased compared to both the prior quarter and the same quarter last year, while gross profit was lower than both periods. Cost of revenue rose more than proportionally, causing gross margin to weaken sequentially and year-over-year.
- The strongest observable driver is the relationship between revenue and cost of revenue: revenue grew but cost of revenue grew faster, compressing gross profit and margin.
- Compared to the immediately preceding quarter, revenue was higher but gross profit was lower, and gross margin weakened. Compared to the same quarter one year earlier, revenue was higher, gross profit was lower, and gross margin weakened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
30.5%
Gross profit
$5.8B
Revenue
$19.1B
Cost of revenue
$13.3B
Quarter-over-quarter change
-3.4 pts
Year-over-year change
-5.9 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 | $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% |
| Dec 31, 2025 | $19.1B | $5.8B | $13.3B | 30.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
-3.4 pts
Year-over-year change
Dec 31, 2024
-5.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the relationship between revenue and cost of revenue: revenue grew but cost of revenue grew faster, compressing gross profit and margin.
Compared to the immediately preceding quarter, revenue was higher but gross profit was lower, and gross margin weakened. Compared to the same quarter one year earlier, revenue was higher, gross profit was lower, and gross margin weakened.
Monitor the trajectory of cost of revenue relative to revenue, as its faster growth is the primary factor behind margin compression.