Microchip Technology Incorporated stock research
FY2026 Q3
Microchip Technology (MCHP) Gross Margin — Quarter Ended Dec 31, 2025
Revenue increased while cost of revenue decreased, leading to a higher gross profit and an improved gross margin compared to both the prior quarter and the same quarter a year earlier.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2026 Q3
Revenue increased while cost of revenue decreased, leading to a higher gross profit and an improved gross margin compared to both the prior quarter and the same quarter a year earlier.
- The gross margin improvement was primarily driven by a combination of higher revenue and lower cost of revenue relative to the prior quarter, with cost of revenue declining even as revenue rose.
- Sequentially, gross margin strengthened as revenue grew and cost of revenue fell. Compared to the same quarter a year earlier, gross margin also improved, supported by a larger increase in revenue relative to the increase in cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
59.6%
Gross profit
$706.9M
Revenue
$1.2B
Cost of revenue
$479.1M
Quarter-over-quarter change
+3.7 pts
Year-over-year change
+4.9 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, 2025 | $970.5M | $501.1M | $469.4M | 51.6% |
| Jun 30, 2025 | $1.1B | $576.7M | $498.8M | 53.6% |
| Sep 30, 2025 | $1.1B | $637.9M | $502.5M | 55.9% |
| Dec 31, 2025 | $1.2B | $706.9M | $479.1M | 59.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
+3.7 pts
Year-over-year change
Dec 31, 2024
+4.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improvement was primarily driven by a combination of higher revenue and lower cost of revenue relative to the prior quarter, with cost of revenue declining even as revenue rose.
Sequentially, gross margin strengthened as revenue grew and cost of revenue fell. Compared to the same quarter a year earlier, gross margin also improved, supported by a larger increase in revenue relative to the increase in cost of revenue.
Monitor the company's continued inventory reduction efforts and the status of factory expansion activities, as referenced in the filing.