Targa Resources Corp. stock research
FY2025 Q3
Targa Resources (TRGP) Gross Margin — Quarter Ended Sep 30, 2025
Gross margin weakened compared to the prior quarter, as gross profit declined while cost of revenue increased. Relative to the same quarter a year ago, gross margin improved, with gross profit rising more than the increase in cost of revenue.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Gross margin weakened compared to the prior quarter, as gross profit declined while cost of revenue increased. Relative to the same quarter a year ago, gross margin improved, with gross profit rising more than the increase in cost of revenue.
- The most observable driver of the margin change was the shift in the relationship between cost of revenue and revenue. Sequentially, cost of revenue rose while revenue fell, compressing margin; year-over-year, revenue outpaced cost growth, supporting margin expansion.
- Compared to the prior quarter, gross margin was lower, with revenue decreasing and cost of revenue increasing. Compared to the same quarter a year ago, gross margin was higher, as revenue and gross profit both increased.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
39.6%
Gross profit
$1.6B
Revenue
$4.2B
Cost of revenue
$2.5B
Quarter-over-quarter change
-3.2 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 |
|---|---|---|---|---|
| Dec 31, 2024 | $4.4B | $1.5B | $2.9B | 33.7% |
| Mar 31, 2025 | $4.6B | $1.3B | $3.3B | 28.6% |
| Jun 30, 2025 | $4.3B | $1.8B | $2.4B | 42.8% |
| Sep 30, 2025 | $4.2B | $1.6B | $2.5B | 39.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
-3.2 pts
Year-over-year change
Sep 30, 2024
+1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of the margin change was the shift in the relationship between cost of revenue and revenue. Sequentially, cost of revenue rose while revenue fell, compressing margin; year-over-year, revenue outpaced cost growth, supporting margin expansion.
Compared to the prior quarter, gross margin was lower, with revenue decreasing and cost of revenue increasing. Compared to the same quarter a year ago, gross margin was higher, as revenue and gross profit both increased.
Monitor the trend of cost of revenue relative to revenue, as it has been a key factor in gross margin movement.