Microchip Technology Incorporated stock research
FY2025 Q3
Microchip Technology (MCHP) Gross Margin — Quarter Ended Dec 31, 2024
Revenue and gross profit decreased compared with both the prior quarter and the same quarter last year, while cost of revenue also fell. Gross margin weakened relative to both periods, as the decline in revenue was proportionally greater than the decline in cost of revenue.
Gross margin takeaway
Quarter ended Dec 31, 2024 · FY2025 Q3
Revenue and gross profit decreased compared with both the prior quarter and the same quarter last year, while cost of revenue also fell. Gross margin weakened relative to both periods, as the decline in revenue was proportionally greater than the decline in cost of revenue.
- The relationship between revenue and cost of revenue shifted unfavorably, with cost declining less proportionally than revenue, leading to a narrower gross margin.
- Compared to the immediately preceding quarter, gross margin was lower as both revenue and gross profit decreased, while cost of revenue also declined. Versus the same quarter one year earlier, the pattern was similar: revenue and gross profit were lower, and gross margin weakened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
54.7%
Gross profit
$561.4M
Revenue
$1.0B
Cost of revenue
$464.6M
Quarter-over-quarter change
-2.7 pts
Year-over-year change
-8.7 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 |
|---|---|---|---|---|
| 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% |
| Dec 31, 2024 | $1.0B | $561.4M | $464.6M | 54.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2024
-2.7 pts
Year-over-year change
Dec 31, 2023
-8.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The relationship between revenue and cost of revenue shifted unfavorably, with cost declining less proportionally than revenue, leading to a narrower gross margin.
Compared to the immediately preceding quarter, gross margin was lower as both revenue and gross profit decreased, while cost of revenue also declined. Versus the same quarter one year earlier, the pattern was similar: revenue and gross profit were lower, and gross margin weakened.
Monitor the impact of the planned closure of the Fab 2 wafer fabrication facility on future cost structure and gross margin.