Cadence Design Systems, Inc. stock research
FY2024 Q2
Cadence Design Systems (CDNS) Gross Margin — Quarter Ended Jun 30, 2024
Revenue and gross profit increased, but cost of revenue grew more rapidly, resulting in a lower gross margin. The margin weakened compared to both the prior quarter and the same quarter a year ago.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue and gross profit increased, but cost of revenue grew more rapidly, resulting in a lower gross margin. The margin weakened compared to both the prior quarter and the same quarter a year ago.
- The most observable driver is the rise in cost of revenue relative to revenue, which outpaced revenue growth and compressed gross margin.
- Gross margin weakened from the prior quarter and was also lower than the same quarter a year ago.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
86.9%
Gross profit
$921.4M
Revenue
$1.1B
Cost of revenue
$139.3M
Quarter-over-quarter change
-0.7 pts
Year-over-year change
-3.5 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 |
|---|---|---|---|---|
| Jun 30, 2023 | $976.6M | $882.8M | $93.8M | 90.4% |
| Sep 30, 2023 | $1.0B | $917.8M | $105.3M | 89.7% |
| Mar 31, 2024 | $1.0B | $883.9M | $125.2M | 87.6% |
| Jun 30, 2024 | $1.1B | $921.4M | $139.3M | 86.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-0.7 pts
Year-over-year change
Jun 30, 2023
-3.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver is the rise in cost of revenue relative to revenue, which outpaced revenue growth and compressed gross margin.
Gross margin weakened from the prior quarter and was also lower than the same quarter a year ago.
Monitor the trend of cost of revenue as a proportion of revenue for further pressure on margin.