Gross Margin % is calculated as gross profit divided by its revenue. VMware's Gross Profit for the
three
months ended in Jul. 2023 was $2,769 Mil. VMware's Revenue for the
three
months ended in Jul. 2023 was $3,408 Mil. Therefore, VMware's Gross Margin % for the quarter that ended in Jul. 2023 was 81.25%.
The historical rank and industry rank for VMware's Gross Margin % or its related term are showing as below:
VMW'
s Gross Margin % Range Over the Past 10 Years
Min: 81.19 Med: 83.61 Max: 85.98
Current: 81.19
During the past 13 years, the highestGross Margin % of VMware was 85.98%. The lowest was 81.19%. And the median was 83.61%.
VMW's Gross Margin % is not ranked
in the Software industry.
Industry Median: 41.685
vs VMW: 81.19
VMware had a gross margin of 81.25% for the quarter that ended in Jul. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for VMware was -0.50% per year.
VMware Gross Margin % Historical Data
The historical data trend for VMware's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Infrastructure subindustry, VMware's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
VMware's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, VMware's Gross Margin % distribution charts can be found below:
* The bar in red indicates where VMware's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
VMware (NYSE:VMW) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
VMware had a gross margin of 81.25% for the quarter that ended in Jul. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
VMware Gross Margin % Related Terms
Thank you for viewing the detailed overview of VMware's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
VMware is an industry titan in virtualizing IT infrastructure and became a stand-alone entity after spinning off from Dell Technologies in November 2021. The software provider operates in three segments: licenses; subscriptions and software as a service; and services. VMware's solutions are used across IT infrastructure, application development, and cybersecurity teams, and the company takes a neutral approach to being the cohesion between cloud environments. The Palo Alto, California, firm operates and sells on a global scale, with about half its revenue from the United States, through direct sales, distributors, and partnerships.
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