Microchip Technology Incorporated stock research
FY2024 Q3
Microchip Technology (MCHP) Gross Margin — Quarter Ended Dec 31, 2023
Gross profit decreased as revenue declined, while cost of revenue also decreased but at a slower pace, resulting in a lower gross margin compared to both the prior quarter and the same period a year ago.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2024 Q3
Gross profit decreased as revenue declined, while cost of revenue also decreased but at a slower pace, resulting in a lower gross margin compared to both the prior quarter and the same period a year ago.
- The decline in gross margin was primarily driven by a larger proportional decrease in revenue relative to the reduction in cost of revenue.
- Compared to the immediately preceding quarter, revenue and gross profit were lower, and gross margin weakened. Versus the same quarter one year earlier, the same pattern held, with all three metrics lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
63.4%
Gross profit
$1.1B
Revenue
$1.8B
Cost of revenue
$645.7M
Quarter-over-quarter change
-4.3 pts
Year-over-year change
-4.4 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 31, 2023 | $2.2B | $1.5B | $713.4M | 68.0% |
| Jun 30, 2023 | $2.3B | $1.6B | $730.2M | 68.1% |
| Sep 30, 2023 | $2.3B | $1.5B | $726.9M | 67.8% |
| Dec 31, 2023 | $1.8B | $1.1B | $645.7M | 63.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
-4.3 pts
Year-over-year change
Dec 31, 2022
-4.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The decline in gross margin was primarily driven by a larger proportional decrease in revenue relative to the reduction in cost of revenue.
Compared to the immediately preceding quarter, revenue and gross profit were lower, and gross margin weakened. Versus the same quarter one year earlier, the same pattern held, with all three metrics lower.
Monitor the trajectory of customer demand and backlog adjustments, as the filing indicates weaker-than-expected business conditions and continued inventory reduction actions by customers.