Targa Resources Corp. stock research
FY2025 Q4
Targa Resources (TRGP) Gross Margin — Quarter Ended Dec 31, 2025
Revenue decreased modestly from the prior quarter and was lower year over year, while gross profit increased sequentially and improved compared to the same quarter last year. Cost of revenue declined both quarter over quarter and year over year, resulting in a gross margin that strengthened versus both periods.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2025 Q4
Revenue decreased modestly from the prior quarter and was lower year over year, while gross profit increased sequentially and improved compared to the same quarter last year. Cost of revenue declined both quarter over quarter and year over year, resulting in a gross margin that strengthened versus both periods.
- The improvement in gross margin was driven by gross profit rising while revenue fell sequentially, and by a larger relative decline in cost of revenue compared to the drop in revenue year over year.
- Compared to the immediately preceding quarter, gross margin improved as gross profit increased and cost of revenue declined. Versus the same quarter one year earlier, gross margin strengthened significantly due to higher gross profit and lower cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
43.1%
Gross profit
$1.7B
Revenue
$4.1B
Cost of revenue
$2.3B
Quarter-over-quarter change
+3.5 pts
Year-over-year change
+9.4 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 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% |
| Dec 31, 2025 | $4.1B | $1.7B | $2.3B | 43.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
+3.5 pts
Year-over-year change
Dec 31, 2024
+9.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The improvement in gross margin was driven by gross profit rising while revenue fell sequentially, and by a larger relative decline in cost of revenue compared to the drop in revenue year over year.
Compared to the immediately preceding quarter, gross margin improved as gross profit increased and cost of revenue declined. Versus the same quarter one year earlier, gross margin strengthened significantly due to higher gross profit and lower cost of revenue.
Monitor the trajectory of cost of revenue relative to revenue, as its decline was the key factor in margin expansion this quarter.