PepsiCo, Inc. stock research
FY2025 Q1
PepsiCo (PEP) Gross Margin — Quarter Ended Mar 22, 2025
Revenue in the current quarter was lower than both the prior quarter and the same quarter last year, while gross profit was lower than the prior quarter but comparable to the year-ago period. Gross margin improved relative to both comparison periods, as cost of revenue declined at a faster pace than revenue, and the filing notes that reported results include items affecting comparability such as mark-to-market adjustments and restructuring charges.
Gross margin takeaway
Quarter ended Mar 22, 2025 · FY2025 Q1
Revenue in the current quarter was lower than both the prior quarter and the same quarter last year, while gross profit was lower than the prior quarter but comparable to the year-ago period. Gross margin improved relative to both comparison periods, as cost of revenue declined at a faster pace than revenue, and the filing notes that reported results include items affecting comparability such as mark-to-market adjustments and restructuring charges.
- The improvement in gross margin was primarily driven by cost of revenue declining more sharply than revenue, which allowed the margin to expand even as revenue decreased.
- Compared to the prior quarter, revenue and gross profit were lower, but gross margin was higher. Compared to the same quarter a year earlier, revenue was slightly lower, gross profit was stable, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
55.8%
Gross profit
$10.0B
Revenue
$17.9B
Cost of revenue
$7.9B
Quarter-over-quarter change
+0.3 pts
Year-over-year change
+1.0 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 23, 2024 | $18.3B | $10.0B | $8.2B | 54.8% |
| Jun 15, 2024 | $22.5B | $12.6B | $9.9B | 55.9% |
| Sep 7, 2024 | $23.3B | $12.9B | $10.4B | 55.4% |
| Mar 22, 2025 | $17.9B | $10.0B | $7.9B | 55.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 7, 2024
+0.3 pts
Year-over-year change
Mar 23, 2024
+1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The improvement in gross margin was primarily driven by cost of revenue declining more sharply than revenue, which allowed the margin to expand even as revenue decreased.
Compared to the prior quarter, revenue and gross profit were lower, but gross margin was higher. Compared to the same quarter a year earlier, revenue was slightly lower, gross profit was stable, and gross margin improved.
Monitor the trajectory of cost of revenue, as it was the key factor behind the margin improvement.