Cadence Design Systems, Inc. stock research
FY2023 Q3
Cadence Design Systems (CDNS) Gross Margin — Quarter Ended Sep 30, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin weakened slightly from both comparison periods, indicating that cost growth outpaced revenue growth.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin weakened slightly from both comparison periods, indicating that cost growth outpaced revenue growth.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue grew while gross margin declined, suggesting cost of revenue increased at a faster rate than revenue.
- Compared to the immediately preceding quarter, gross margin was lower; compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
89.7%
Gross profit
$917.8M
Revenue
$1.0B
Cost of revenue
$105.3M
Quarter-over-quarter change
-0.7 pts
Year-over-year change
-1.0 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% |
| Sep 30, 2023 | $1.0B | $917.8M | $105.3M | 89.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-0.7 pts
Year-over-year change
Oct 1, 2022
-1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue grew while gross margin declined, suggesting cost of revenue increased at a faster rate than revenue.
Compared to the immediately preceding quarter, gross margin was lower; compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons.
Monitor the trend in cost of revenue relative to revenue, as its faster growth has pressured gross margin.