Cadence Design Systems, Inc. stock research
FY2025 Q1
Cadence Design Systems (CDNS) Gross Margin — Quarter Ended Mar 31, 2025
Revenue and gross profit both moved lower from the prior quarter, while cost of revenue declined less proportionally, causing gross margin to weaken. Compared with the same quarter last year, revenue and gross profit were higher, but gross margin contracted slightly as cost of revenue grew at a faster pace.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue and gross profit both moved lower from the prior quarter, while cost of revenue declined less proportionally, causing gross margin to weaken. Compared with the same quarter last year, revenue and gross profit were higher, but gross margin contracted slightly as cost of revenue grew at a faster pace.
- The relationship among revenue, gross profit, cost of revenue, and gross margin shows that cost of revenue decreased while revenue declined, indicating near-term pressure on margin efficiency.
- Compared with the immediately preceding quarter, revenue and gross profit were lower, and gross margin weakened because cost of revenue did not fall proportionally. Versus the same quarter one year earlier, revenue and gross profit improved, but gross margin was slightly weaker as cost of revenue grew more quickly.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
86.5%
Gross profit
$1.1B
Revenue
$1.2B
Cost of revenue
$167.1M
Quarter-over-quarter change
-0.0 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, 2024 | $1.0B | $883.9M | $125.2M | 87.6% |
| Jun 30, 2024 | $1.1B | $921.4M | $139.3M | 86.9% |
| Sep 30, 2024 | $1.2B | $1.1B | $163.0M | 86.6% |
| Mar 31, 2025 | $1.2B | $1.1B | $167.1M | 86.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2024
-0.0 pts
Year-over-year change
Mar 31, 2024
-1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The relationship among revenue, gross profit, cost of revenue, and gross margin shows that cost of revenue decreased while revenue declined, indicating near-term pressure on margin efficiency.
Compared with the immediately preceding quarter, revenue and gross profit were lower, and gross margin weakened because cost of revenue did not fall proportionally. Versus the same quarter one year earlier, revenue and gross profit improved, but gross margin was slightly weaker as cost of revenue grew more quickly.
Monitor whether cost of revenue continues to decline at a slower pace than revenue in the coming quarter.