Merck & Co., Inc. stock research
FY2025 Q1
Merck & (MRK) Gross Margin — Quarter Ended Mar 31, 2025
Revenue was slightly lower than the prior quarter and the same quarter last year, while gross profit was higher than the prior quarter but slightly lower than a year ago. Cost of revenue decreased compared to both periods, resulting in a gross margin that improved from the prior quarter and was slightly higher than the same quarter last year.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue was slightly lower than the prior quarter and the same quarter last year, while gross profit was higher than the prior quarter but slightly lower than a year ago. Cost of revenue decreased compared to both periods, resulting in a gross margin that improved from the prior quarter and was slightly higher than the same quarter last year.
- The strongest observable margin driver is the reduction in cost of revenue relative to revenue, which supported the gross margin improvement from the prior quarter.
- Compared to the prior quarter, gross margin improved as cost of revenue decreased more than revenue. Compared to the same quarter last year, gross margin was slightly higher, with revenue and gross profit both slightly lower but cost of revenue also lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
78.0%
Gross profit
$12.1B
Revenue
$15.5B
Cost of revenue
$3.4B
Quarter-over-quarter change
+2.5 pts
Year-over-year change
+0.4 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 |
|---|---|---|---|---|
| Jun 30, 2024 | $16.1B | $12.4B | $3.7B | 76.8% |
| Sep 30, 2024 | $16.7B | $12.6B | $4.1B | 75.5% |
| Dec 31, 2024 | $15.6B | $11.8B | $3.8B | 75.5% |
| Mar 31, 2025 | $15.5B | $12.1B | $3.4B | 78.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
+2.5 pts
Year-over-year change
Mar 31, 2024
+0.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the reduction in cost of revenue relative to revenue, which supported the gross margin improvement from the prior quarter.
Compared to the prior quarter, gross margin improved as cost of revenue decreased more than revenue. Compared to the same quarter last year, gross margin was slightly higher, with revenue and gross profit both slightly lower but cost of revenue also lower.
Monitor the trend in cost of revenue, as its decline was the primary factor behind the gross margin improvement this quarter.