Gen Digital Inc. stock research
FY2025 Q3
Gen Digital (GEN) Gross Margin — Quarter Ended Dec 27, 2024
Revenue and gross profit both increased relative to the prior quarter and the same quarter last year. Gross margin improved sequentially because cost of revenue was slightly lower, but it weakened year over year as cost of revenue grew more than revenue.
Gross margin takeaway
Quarter ended Dec 27, 2024 · FY2025 Q3
Revenue and gross profit both increased relative to the prior quarter and the same quarter last year. Gross margin improved sequentially because cost of revenue was slightly lower, but it weakened year over year as cost of revenue grew more than revenue.
- The strongest observable driver is the change in cost of revenue relative to revenue. In the sequential comparison, a slight reduction in cost of revenue supported the margin improvement, while the year-over-year comparison shows that cost of revenue rose faster than revenue, pressuring the margin.
- Gross margin improved from the immediately preceding quarter but weakened from the same quarter one year earlier. The sequential improvement was accompanied by lower cost of revenue, while the year-over-year decline occurred despite higher revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.4%
Gross profit
$793.0M
Revenue
$986.0M
Cost of revenue
$193.0M
Quarter-over-quarter change
+0.3 pts
Year-over-year change
-0.4 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 |
|---|---|---|---|---|
| Mar 29, 2024 | $964.0M | $774.0M | $190.0M | 80.3% |
| Jun 28, 2024 | $965.0M | $775.0M | $190.0M | 80.3% |
| Sep 27, 2024 | $974.0M | $780.0M | $194.0M | 80.1% |
| Dec 27, 2024 | $986.0M | $793.0M | $193.0M | 80.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 27, 2024
+0.3 pts
Year-over-year change
Dec 29, 2023
-0.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the change in cost of revenue relative to revenue. In the sequential comparison, a slight reduction in cost of revenue supported the margin improvement, while the year-over-year comparison shows that cost of revenue rose faster than revenue, pressuring the margin.
Gross margin improved from the immediately preceding quarter but weakened from the same quarter one year earlier. The sequential improvement was accompanied by lower cost of revenue, while the year-over-year decline occurred despite higher revenue.
Monitor the trend of cost of revenue, as its relative movement versus revenue has been the primary factor in gross margin changes.