Merck & Co., Inc. stock research
FY2025 Q3
Merck & (MRK) Gross Margin — Quarter Ended Sep 30, 2025
Revenue and gross profit both increased compared with the prior quarter and the same quarter a year earlier, while cost of revenue was lower than the year-ago level but slightly higher than the prior quarter. Gross margin improved relative to both periods, reflecting a stronger relationship between revenue and gross profit relative to cost of revenue.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue and gross profit both increased compared with the prior quarter and the same quarter a year earlier, while cost of revenue was lower than the year-ago level but slightly higher than the prior quarter. Gross margin improved relative to both periods, reflecting a stronger relationship between revenue and gross profit relative to cost of revenue.
- The strongest observable margin driver is the increase in gross profit outpacing the change in cost of revenue, leading to an improved gross margin. This is supported by revenue growth that exceeded the rise in cost of revenue compared with both the prior quarter and the year-ago quarter.
- Compared with the immediately preceding quarter, revenue, gross profit, and gross margin were all higher, while cost of revenue was slightly higher. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
77.7%
Gross profit
$13.4B
Revenue
$17.3B
Cost of revenue
$3.9B
Quarter-over-quarter change
+0.2 pts
Year-over-year change
+2.2 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, 2024 | $15.6B | $11.8B | $3.8B | 75.5% |
| Mar 31, 2025 | $15.5B | $12.1B | $3.4B | 78.0% |
| Jun 30, 2025 | $15.8B | $12.2B | $3.6B | 77.5% |
| Sep 30, 2025 | $17.3B | $13.4B | $3.9B | 77.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
+0.2 pts
Year-over-year change
Sep 30, 2024
+2.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the increase in gross profit outpacing the change in cost of revenue, leading to an improved gross margin. This is supported by revenue growth that exceeded the rise in cost of revenue compared with both the prior quarter and the year-ago quarter.
Compared with the immediately preceding quarter, revenue, gross profit, and gross margin were all higher, while cost of revenue was slightly higher. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved.
Monitor the trend in cost of revenue relative to revenue, as a slight sequential increase in cost of revenue occurred despite a larger revenue gain.