Cadence Design Systems, Inc. stock research
FY2023 Q2
Cadence Design Systems (CDNS) Gross Margin — Quarter Ended Jun 30, 2023
Revenue and gross profit both decreased from the prior quarter but increased compared to the same quarter last year. Gross margin improved sequentially and year-over-year, driven by a lower cost of revenue relative to revenue.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue and gross profit both decreased from the prior quarter but increased compared to the same quarter last year. Gross margin improved sequentially and year-over-year, driven by a lower cost of revenue relative to revenue.
- The strongest observable margin driver is the reduction in cost of revenue as a share of revenue, which lifted gross margin to its highest level among the three quarters shown.
- Compared to the prior quarter, revenue and gross profit were lower, but gross margin was higher due to a larger decline in cost of revenue. Versus the same quarter last year, all three metrics—revenue, gross profit, and gross margin—were higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
90.4%
Gross profit
$882.8M
Revenue
$976.6M
Cost of revenue
$93.8M
Quarter-over-quarter change
+2.6 pts
Year-over-year change
+0.5 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, 2023 | $1.0B | $897.2M | $124.5M | 87.8% |
| Jun 30, 2023 | $976.6M | $882.8M | $93.8M | 90.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+2.6 pts
Year-over-year change
Jul 2, 2022
+0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the reduction in cost of revenue as a share of revenue, which lifted gross margin to its highest level among the three quarters shown.
Compared to the prior quarter, revenue and gross profit were lower, but gross margin was higher due to a larger decline in cost of revenue. Versus the same quarter last year, all three metrics—revenue, gross profit, and gross margin—were higher.
Monitor whether the cost of revenue remains at a similar low level in future quarters to sustain the elevated gross margin.