PepsiCo, Inc. stock research
FY2025 Q3
PepsiCo (PEP) Gross Margin — Quarter Ended Sep 6, 2025
Revenue and gross profit both increased from the prior quarter, while cost of revenue increased at a higher rate, causing gross margin to weaken. Compared to the same quarter one year earlier, revenue improved but gross profit and gross margin were lower, reflecting a proportionally larger increase in cost of revenue.
Gross margin takeaway
Quarter ended Sep 6, 2025 · FY2025 Q3
Revenue and gross profit both increased from the prior quarter, while cost of revenue increased at a higher rate, causing gross margin to weaken. Compared to the same quarter one year earlier, revenue improved but gross profit and gross margin were lower, reflecting a proportionally larger increase in cost of revenue.
- The strongest observable margin driver was the relative growth of cost of revenue outpacing revenue, as gross margin declined both sequentially and year-over-year.
- Compared to the immediately preceding quarter, revenue and gross profit were higher, but gross margin weakened. Against the same quarter one year earlier, revenue was higher while gross profit and gross margin were lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
53.6%
Gross profit
$12.8B
Revenue
$23.9B
Cost of revenue
$11.1B
Quarter-over-quarter change
-1.1 pts
Year-over-year change
-1.8 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 |
|---|---|---|---|---|
| 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% |
| Sep 6, 2025 | $23.9B | $12.8B | $11.1B | 53.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 14, 2025
-1.1 pts
Year-over-year change
Sep 7, 2024
-1.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver was the relative growth of cost of revenue outpacing revenue, as gross margin declined both sequentially and year-over-year.
Compared to the immediately preceding quarter, revenue and gross profit were higher, but gross margin weakened. Against the same quarter one year earlier, revenue was higher while gross profit and gross margin were lower.
Monitor the trend in cost of revenue relative to revenue, as its proportionally larger increase drove the gross margin decline in both comparisons.