Microchip Technology Incorporated stock research
FY2026 Q1
Microchip Technology (MCHP) Gross Margin — Quarter Ended Jun 30, 2025
In the current quarter, gross margin improved sequentially as revenue increased more than cost of revenue, but remained lower than the same quarter last year when both revenue and gross profit were higher. The sequential improvement reflects a recovery from the prior quarter's weaker performance, consistent with the company's business recovery plan.
Gross margin takeaway
Quarter ended Jun 30, 2025 · FY2026 Q1
In the current quarter, gross margin improved sequentially as revenue increased more than cost of revenue, but remained lower than the same quarter last year when both revenue and gross profit were higher. The sequential improvement reflects a recovery from the prior quarter's weaker performance, consistent with the company's business recovery plan.
- The strongest observable driver of the sequential gross margin improvement was the faster growth in revenue relative to cost of revenue, which expanded the spread between them.
- Compared to the immediately preceding quarter, gross margin improved and gross profit increased, while revenue also rose. Compared to the same quarter one year earlier, gross margin weakened, and both revenue and gross profit were lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
53.6%
Gross profit
$576.7M
Revenue
$1.1B
Cost of revenue
$498.8M
Quarter-over-quarter change
+2.0 pts
Year-over-year change
-5.7 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 |
|---|---|---|---|---|
| Sep 30, 2024 | $1.2B | $668.5M | $495.3M | 57.4% |
| Dec 31, 2024 | $1.0B | $561.4M | $464.6M | 54.7% |
| Mar 31, 2025 | $970.5M | $501.1M | $469.4M | 51.6% |
| Jun 30, 2025 | $1.1B | $576.7M | $498.8M | 53.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2025
+2.0 pts
Year-over-year change
Jun 30, 2024
-5.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of the sequential gross margin improvement was the faster growth in revenue relative to cost of revenue, which expanded the spread between them.
Compared to the immediately preceding quarter, gross margin improved and gross profit increased, while revenue also rose. Compared to the same quarter one year earlier, gross margin weakened, and both revenue and gross profit were lower.
Monitor inventory levels and days of inventory, as the company continues to execute its recovery plan and reduce inventory.