The Home Depot, Inc. stock research
FY2025 Q1
The Home Depot (HD) Gross Margin — Quarter Ended May 4, 2025
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue was lower than the prior quarter but higher than a year ago. Gross margin improved from the prior quarter but weakened relative to the same quarter last year.
Gross margin takeaway
Quarter ended May 4, 2025 · FY2025 Q1
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue was lower than the prior quarter but higher than a year ago. Gross margin improved from the prior quarter but weakened relative to the same quarter last year.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue grew while cost of revenue declined sequentially, leading to gross margin improvement. This contrasts with the year-ago comparison where cost of revenue increased more than revenue, resulting in a lower gross margin.
- Compared to the immediately preceding quarter, gross margin improved as revenue increased and cost of revenue decreased. Compared to the same quarter one year earlier, gross margin weakened despite higher revenue, because cost of revenue rose at a faster pace.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
33.8%
Gross profit
$13.5B
Revenue
$39.9B
Cost of revenue
$26.4B
Quarter-over-quarter change
+0.9 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 |
|---|---|---|---|---|
| Jul 28, 2024 | $43.2B | $14.4B | $28.8B | 33.4% |
| Oct 27, 2024 | $40.2B | $13.4B | $26.8B | 33.4% |
| Feb 2, 2025 | $39.7B | $13.0B | $26.7B | 32.8% |
| May 4, 2025 | $39.9B | $13.5B | $26.4B | 33.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Feb 2, 2025
+0.9 pts
Year-over-year change
Apr 28, 2024
-0.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue grew while cost of revenue declined sequentially, leading to gross margin improvement. This contrasts with the year-ago comparison where cost of revenue increased more than revenue, resulting in a lower gross margin.
Compared to the immediately preceding quarter, gross margin improved as revenue increased and cost of revenue decreased. Compared to the same quarter one year earlier, gross margin weakened despite higher revenue, because cost of revenue rose at a faster pace.
Monitor the trajectory of cost of revenue relative to revenue, as its growth rate versus the prior year outpaced revenue growth and compressed gross margin.