Cisco Systems, Inc. stock research
FY2025 Q1
Cisco Systems (CSCO) Gross Margin — Quarter Ended Oct 26, 2024
Revenue was higher than the prior quarter and cost of revenue was lower, leading to a higher gross profit and an improved gross margin. Compared to the same quarter a year earlier, revenue was lower but gross margin was slightly higher due to a proportionally larger decline in cost of revenue.
Gross margin takeaway
Quarter ended Oct 26, 2024 · FY2025 Q1
Revenue was higher than the prior quarter and cost of revenue was lower, leading to a higher gross profit and an improved gross margin. Compared to the same quarter a year earlier, revenue was lower but gross margin was slightly higher due to a proportionally larger decline in cost of revenue.
- The strongest observable margin driver this quarter was the reduction in cost of revenue relative to revenue, which allowed gross profit to increase despite a modest revenue decline compared to the prior year.
- Sequentially, gross margin improved as cost of revenue fell while revenue grew. Year over year, gross margin edged higher even though revenue declined, because cost of revenue decreased at a faster rate.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
65.9%
Gross profit
$9.1B
Revenue
$13.8B
Cost of revenue
$4.7B
Quarter-over-quarter change
+1.5 pts
Year-over-year change
+0.7 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 |
|---|---|---|---|---|
| Jan 27, 2024 | $12.8B | $8.2B | $4.6B | 64.2% |
| Apr 27, 2024 | $12.7B | $8.3B | $4.4B | 65.1% |
| Jul 27, 2024 | $13.6B | $8.8B | $4.9B | 64.4% |
| Oct 26, 2024 | $13.8B | $9.1B | $4.7B | 65.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 27, 2024
+1.5 pts
Year-over-year change
Oct 28, 2023
+0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver this quarter was the reduction in cost of revenue relative to revenue, which allowed gross profit to increase despite a modest revenue decline compared to the prior year.
Sequentially, gross margin improved as cost of revenue fell while revenue grew. Year over year, gross margin edged higher even though revenue declined, because cost of revenue decreased at a faster rate.
Monitor inventory levels, which decreased from the end of the prior fiscal year, as changes in inventory may affect future cost of revenue.