NetApp, Inc. stock research
FY2025 Q3
NetApp (NTAP) Gross Margin — Quarter Ended Jan 24, 2025
Revenue was slightly lower than the prior quarter but comparable to the same quarter last year. Gross profit decreased relative to both periods, while cost of revenue increased compared to both the prior quarter and the year-ago quarter, resulting in a gross margin that weakened sequentially and year-over-year.
Gross margin takeaway
Quarter ended Jan 24, 2025 · FY2025 Q3
Revenue was slightly lower than the prior quarter but comparable to the same quarter last year. Gross profit decreased relative to both periods, while cost of revenue increased compared to both the prior quarter and the year-ago quarter, resulting in a gross margin that weakened sequentially and year-over-year.
- The gross margin decline was driven by a combination of lower gross profit and higher cost of revenue relative to both the prior quarter and the year-ago quarter. The strongest observable driver is the increase in cost of revenue, which outpaced the change in revenue.
- Compared to the immediately preceding quarter, revenue was lower and gross profit was lower, while cost of revenue was higher, leading to a weakened gross margin. Compared to the same quarter one year earlier, revenue was stable, but gross profit was lower and cost of revenue was higher, also resulting in a weakened gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
69.8%
Gross profit
$1.1B
Revenue
$1.6B
Cost of revenue
$496.0M
Quarter-over-quarter change
-1.2 pts
Year-over-year change
-1.9 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 |
|---|---|---|---|---|
| Apr 26, 2024 | $1.7B | $1.2B | $492.0M | 70.5% |
| Jul 26, 2024 | $1.5B | $1.1B | $443.0M | 71.3% |
| Oct 25, 2024 | $1.7B | $1.2B | $481.0M | 71.0% |
| Jan 24, 2025 | $1.6B | $1.1B | $496.0M | 69.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Oct 25, 2024
-1.2 pts
Year-over-year change
Jan 26, 2024
-1.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin decline was driven by a combination of lower gross profit and higher cost of revenue relative to both the prior quarter and the year-ago quarter. The strongest observable driver is the increase in cost of revenue, which outpaced the change in revenue.
Compared to the immediately preceding quarter, revenue was lower and gross profit was lower, while cost of revenue was higher, leading to a weakened gross margin. Compared to the same quarter one year earlier, revenue was stable, but gross profit was lower and cost of revenue was higher, also resulting in a weakened gross margin.
Monitor the trajectory of cost of revenue, as it increased both sequentially and year-over-year while revenue did not grow proportionally.