Microchip Technology Incorporated stock research
FY2025 Q2
Microchip Technology (MCHP) Gross Margin — Quarter Ended Sep 30, 2024
Revenue was stable compared to the previous quarter but lower than the same quarter a year earlier. Gross profit decreased both sequentially and year-over-year, while cost of revenue also declined, resulting in a gross margin that weakened relative to both prior periods.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2025 Q2
Revenue was stable compared to the previous quarter but lower than the same quarter a year earlier. Gross profit decreased both sequentially and year-over-year, while cost of revenue also declined, resulting in a gross margin that weakened relative to both prior periods.
- The decline in gross margin is primarily driven by gross profit falling more sharply than cost of revenue. According to the filing, the company is managing high inventory levels and operating global production facilities at lower utilization, which are factors affecting cost structure and margin.
- Compared to the previous quarter, revenue was stable, gross profit was lower, cost of revenue was slightly lower, and gross margin weakened. Compared to the same quarter a year earlier, revenue was lower, gross profit was lower, cost of revenue was lower, and gross margin weakened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
57.4%
Gross profit
$668.5M
Revenue
$1.2B
Cost of revenue
$495.3M
Quarter-over-quarter change
-1.9 pts
Year-over-year change
-10.3 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 |
|---|---|---|---|---|
| Dec 31, 2023 | $1.8B | $1.1B | $645.7M | 63.4% |
| Mar 31, 2024 | $1.3B | $789.9M | $535.9M | 59.6% |
| Jun 30, 2024 | $1.2B | $736.9M | $504.4M | 59.4% |
| Sep 30, 2024 | $1.2B | $668.5M | $495.3M | 57.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
-1.9 pts
Year-over-year change
Sep 30, 2023
-10.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The decline in gross margin is primarily driven by gross profit falling more sharply than cost of revenue. According to the filing, the company is managing high inventory levels and operating global production facilities at lower utilization, which are factors affecting cost structure and margin.
Compared to the previous quarter, revenue was stable, gross profit was lower, cost of revenue was slightly lower, and gross margin weakened. Compared to the same quarter a year earlier, revenue was lower, gross profit was lower, cost of revenue was lower, and gross margin weakened.
Monitor customer inventory reduction trends and the company's production utilization rates, as these are highlighted in the filing as ongoing factors influencing financial results.