PepsiCo, Inc. stock research
FY2025 Q2
PepsiCo (PEP) Gross Margin — Quarter Ended Jun 14, 2025
Gross margin declined from the prior quarter and from the same quarter last year, as cost of revenue grew at a faster pace than revenue, causing gross profit to increase less proportionally. Revenue was higher than both comparative periods, but gross profit was lower than the year-ago quarter.
Gross margin takeaway
Quarter ended Jun 14, 2025 · FY2025 Q2
Gross margin declined from the prior quarter and from the same quarter last year, as cost of revenue grew at a faster pace than revenue, causing gross profit to increase less proportionally. Revenue was higher than both comparative periods, but gross profit was lower than the year-ago quarter.
- The primary observable driver of the margin change is the relationship between cost of revenue and revenue; cost of revenue increased more than revenue, resulting in a lower gross margin.
- Sequentially, gross margin weakened from the first quarter of fiscal year 2025, and on a year-over-year basis, it also weakened compared to the second quarter of fiscal year 2024.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
54.7%
Gross profit
$12.4B
Revenue
$22.7B
Cost of revenue
$10.3B
Quarter-over-quarter change
-1.1 pts
Year-over-year change
-1.3 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 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% |
| Jun 14, 2025 | $22.7B | $12.4B | $10.3B | 54.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 22, 2025
-1.1 pts
Year-over-year change
Jun 15, 2024
-1.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary observable driver of the margin change is the relationship between cost of revenue and revenue; cost of revenue increased more than revenue, resulting in a lower gross margin.
Sequentially, gross margin weakened from the first quarter of fiscal year 2025, and on a year-over-year basis, it also weakened compared to the second quarter of fiscal year 2024.
Monitor the trajectory of cost of revenue relative to revenue, particularly as the company's filing notes items affecting comparability that could influence reported cost of sales.