Microchip Technology Inc (MCHP)

Gross profit margin

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Gross profit (ttm)	US$ in thousands	2,756,700	3,315,300	4,174,200	4,995,700	5,725,100	6,075,900	5,946,400	5,697,900	5,399,000	5,081,500	4,751,900	4,449,600	4,156,000	3,848,500	3,588,100	3,378,800	3,265,900	3,205,600	3,225,200	3,242,100
Revenue (ttm)	US$ in thousands	4,756,900	5,496,600	6,587,100	7,634,400	8,541,300	8,944,800	8,763,700	8,438,700	8,050,200	7,638,500	7,215,100	6,820,900	6,443,800	6,038,400	5,698,100	5,438,400	5,297,700	5,233,000	5,261,300	5,274,200
Gross profit margin		57.95%	60.32%	63.37%	65.44%	67.03%	67.93%	67.85%	67.52%	67.07%	66.52%	65.86%	65.23%	64.50%	63.73%	62.97%	62.13%	61.65%	61.26%	61.30%	61.47%

December 31, 2024 calculation

Gross profit margin = Gross profit (ttm) ÷ Revenue (ttm)
= $2,756,700K ÷ $4,756,900K
= 57.95%

Based on the provided data on the gross profit margin of Microchip Technology Inc, we observe fluctuations in the company's gross profit margin over the past few years. The gross profit margin represents the percentage of revenue that exceeds the cost of goods sold and is a key indicator of a company's profitability.

From March 31, 2020, to December 31, 2023, Microchip Technology Inc experienced a steady increase in its gross profit margin, indicating improvements in cost management and potentially higher pricing power. The company's gross profit margin increased from 61.47% to 67.03% during this period.

However, starting from March 31, 2024, there was a noticeable decline in the gross profit margin, reaching 57.95% by December 31, 2024. This decline could be attributed to various factors such as increased competition, pricing pressures, or rising production costs.

It is important for investors and stakeholders to monitor the trend in the gross profit margin as it provides valuable insights into the company's operational efficiency and profitability. A declining gross profit margin may raise concerns about the company's ability to maintain profitability in the long run and could warrant further investigation into the underlying causes.