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Fusion-io Inc (NYSE:FIO)
Gross Profit
$212.6 Mil (TTM As of Dec. 2013)

Fusion-io Inc's gross profit for the three months ended in Dec. 2013 was $53.0 Mil. Fusion-io Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $212.6 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Fusion-io Inc's gross profit for the three months ended in Dec. 2013 was $53.0 Mil. Fusion-io Inc's revenue for the three months ended in Dec. 2013 was $94.5 Mil. Therefore, Fusion-io Inc's Gross Margin for the quarter that ended in Dec. 2013 was 56.10%.

Fusion-io Inc had a gross margin of 56.10% for the quarter that ended in Dec. 2013 => Durable competitive advantage

During the past 5 years, the highest Gross Margin of Fusion-io Inc was 58.85%. The lowest was 50.74%. And the median was 55.77%.


Definition

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

Fusion-io Inc's Gross Profit for the fiscal year that ended in Jun. 2013 is calculated as

Gross Profit (A: Jun. 2013 )=Revenue - Cost of Goods Sold
=432.386 - 177.915
=254.5

Fusion-io Inc's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=94.501 - 41.488
=53.0

Fusion-io Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 48.259 (Mar. 2013 ) + 61.532 (Jun. 2013 ) + 49.753 (Sep. 2013 ) + 53.013 (Dec. 2013 ) = $212.6 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

Fusion-io Inc's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=53.0 / 94.501
=56.10 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own 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.


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

Fusion-io Inc had a gross margin of 56.10% for the quarter that ended in Dec. 2013 => Durable competitive advantage


Related Terms

Cost of Goods Sold, Gross Margin, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Fusion-io Inc Annual Data

Jun09Jun10Jun11Jun12Jun13
Gross_Profit 0.00.00.00.00.05.220.2113.2200.3254.5

Fusion-io Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 47.042.949.161.370.174.448.361.549.853.0
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