Cadence Design Systems, Inc. stock research
FY2025 Q2
Cadence Design Systems (CDNS) Gross Margin — Quarter Ended Jun 30, 2025
Revenue increased compared to both the prior quarter and the same quarter last year. However, cost of revenue rose more sharply, leading to a lower gross profit than the prior quarter and a gross margin that weakened relative to both comparison periods.
Gross margin takeaway
Quarter ended Jun 30, 2025 · FY2025 Q2
Revenue increased compared to both the prior quarter and the same quarter last year. However, cost of revenue rose more sharply, leading to a lower gross profit than the prior quarter and a gross margin that weakened relative to both comparison periods.
- The primary observable factor in the gross margin decline was a larger increase in cost of revenue relative to the increase in revenue.
- Compared to the prior quarter, gross margin weakened as cost of revenue grew while gross profit declined. Compared to the same quarter last year, gross margin also weakened, with cost of revenue substantially higher despite revenue growth.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
75.5%
Gross profit
$962.7M
Revenue
$1.3B
Cost of revenue
$312.7M
Quarter-over-quarter change
-11.1 pts
Year-over-year change
-11.4 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, 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% |
| Jun 30, 2025 | $1.3B | $962.7M | $312.7M | 75.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2025
-11.1 pts
Year-over-year change
Jun 30, 2024
-11.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary observable factor in the gross margin decline was a larger increase in cost of revenue relative to the increase in revenue.
Compared to the prior quarter, gross margin weakened as cost of revenue grew while gross profit declined. Compared to the same quarter last year, gross margin also weakened, with cost of revenue substantially higher despite revenue growth.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters.