Gross margin
What it measures¶
Gross margin is gross profit divided by revenue. Gross profit is revenue minus the cost of revenue — the direct cost of producing what was sold, such as materials and factory labour. A gross margin of 40% means 40 of every 100 units of sales are left after the direct costs, to pay for selling, research, management, interest and tax.
Why it is on the page¶
Margins stack like a funnel — gross, then operating, then net, then free cash flow — and each gap names a layer of cost. The gross margin is the top of the funnel and tells you what kind of business this is: a contract manufacturer keeps a little, a software company most of each sale.
Thresholds, their source and the population they were fitted on¶
The page draws no zones: what is normal depends entirely on the industry, and no published source gives one line for all. The condition summary judges the related gross profitability (gross profit ÷ assets) against the company's sector instead.
- Fitted on: no population — a descriptive ratio.
- Evidence grade: not graded.
A worked example¶
Celestica, as the Fundamentals page showed it on 9 August 2026 (fiscal year 2025): revenue of 12.39 billion US dollars against a cost of revenue of 10.9 billion left a gross profit of 1.49 billion — a gross margin of 12.06%. That tells you, before any other figure, that this is a thin-margin assembly business whose results depend on volume and efficiency.
What “No verdict” means here¶
The row carries no verdict of its own. It reads insufficient data when the company reports no cost of revenue — some service companies do not — so no gross profit can be formed.
What the verdict is and is not¶
The figure describes the share of sales left after direct costs in one year. It is not good or bad on its own, not a forecast, and not an instruction to trade the shares.