TE Connectivity plc stock research
FY2025 Q1
TE Connectivity (TEL) Gross Margin — Quarter Ended Dec 27, 2024
Revenue in the current quarter remained relatively stable compared to the same quarter last year, while gross profit increased and cost of revenue decreased, leading to an improved gross margin. Sequentially from the prior quarter, revenue declined and cost of revenue decreased at a slower rate, resulting in a lower gross profit and a higher gross margin.
Gross margin takeaway
Quarter ended Dec 27, 2024 · FY2025 Q1
Revenue in the current quarter remained relatively stable compared to the same quarter last year, while gross profit increased and cost of revenue decreased, leading to an improved gross margin. Sequentially from the prior quarter, revenue declined and cost of revenue decreased at a slower rate, resulting in a lower gross profit and a higher gross margin.
- The improvement in gross margin from the prior quarter was driven by cost of revenue declining less than revenue, which allowed gross profit to decline less sharply. Compared to the same quarter last year, the gross margin was higher as gross profit grew faster than revenue.
- Gross margin strengthened compared to both the prior quarter and the same quarter one year earlier. Relative to the prior quarter, revenue decreased while cost of revenue decreased at a slower pace, resulting in a lower gross profit but a higher margin rate.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
35.5%
Gross profit
$1.4B
Revenue
$3.8B
Cost of revenue
$2.5B
Quarter-over-quarter change
+1.5 pts
Year-over-year change
+0.9 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 |
|---|---|---|---|---|
| Mar 29, 2024 | $4.0B | $1.4B | $2.6B | 34.4% |
| Jun 28, 2024 | $4.0B | $1.4B | $2.6B | 34.8% |
| Sep 27, 2024 | $4.1B | $1.4B | $2.7B | 34.0% |
| Dec 27, 2024 | $3.8B | $1.4B | $2.5B | 35.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 27, 2024
+1.5 pts
Year-over-year change
Dec 29, 2023
+0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The improvement in gross margin from the prior quarter was driven by cost of revenue declining less than revenue, which allowed gross profit to decline less sharply. Compared to the same quarter last year, the gross margin was higher as gross profit grew faster than revenue.
Gross margin strengthened compared to both the prior quarter and the same quarter one year earlier. Relative to the prior quarter, revenue decreased while cost of revenue decreased at a slower pace, resulting in a lower gross profit but a higher margin rate.
Monitor the trajectory of cost of sales relative to net sales, as the relationship between these two figures will be critical to maintaining margin improvement.