The ADT (FRA:ADT) Gross Margin % : 55.44% (As of Dec. 2015)

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What is The ADT Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. The ADT's Gross Profit for the three months ended in Dec. 2015 was €458 Mil. The ADT's Revenue for the three months ended in Dec. 2015 was €826 Mil. Therefore, The ADT's Gross Margin % for the quarter that ended in Dec. 2015 was 55.44%.

The historical rank and industry rank for The ADT's Gross Margin % or its related term are showing as below:

FRA:ADT's Gross Margin % is not ranked ^*
in the Business Services industry.
Industry Median: 34.37
* Ranked among companies with meaningful Gross Margin % only.

The ADT had a gross margin of 55.44% for the quarter that ended in Dec. 2015 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for The ADT was 0.00% per year.

The ADT Gross Margin % Historical Data

The historical data trend for The ADT'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.

* Premium members only.

The ADT Gross Margin % Chart

The ADT Annual Data

Trend

Sep11

Sep12

Sep13

Sep14

Sep15

Gross Margin %

56.88

57.43

58.36

57.25

55.93

The ADT Quarterly Data
	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15
Gross Margin %	Get a 7-Day Free Trial													56.26	55.96	55.90	55.62	55.44

Competitive Comparison of The ADT's Gross Margin %

For the Security & Protection Services subindustry, The ADT'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.

The ADT's Gross Margin % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, The ADT's Gross Margin % distribution charts can be found below:

* The bar in red indicates where The ADT's Gross Margin % falls into.

The ADT Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

The ADT's Gross Margin for the fiscal year that ended in Sep. 2015 is calculated as

Gross Margin % (A: Sep. 2015 )	=	Gross Profit (A: Sep. 2015 )	/	Revenue (A: Sep. 2015 )
	=	1781.1	/	3184.434
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(3184.434 - 1403.325)	/	3184.434
	=	55.93 %

The ADT's Gross Margin for the quarter that ended in Dec. 2015 is calculated as

Gross Margin % (Q: Dec. 2015 )	=	Gross Profit (Q: Dec. 2015 )	/	Revenue (Q: Dec. 2015 )
	=	458.1	/	826.2
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(826.2 - 368.118)	/	826.2
	=	55.44 %

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.

The ADT (FRA:ADT) 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

The ADT had a gross margin of 55.44% for the quarter that ended in Dec. 2015 => 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.

The ADT Gross Margin % Related Terms

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The ADT (FRA:ADT) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.adt.com

The ADT Corp was incorporated in the state of Delaware in 2012. The Company is engaged in providing monitored security, interactive home and business automation and related monitoring services in the United States and Canada. The Company's products and services include home and business solutions, and home health services. The Company's monitored security and home/business automation offerings involve the installation and monitoring of residential and small business security and premises automation systems designed to detect intrusion, control access and react to movement, smoke, carbon monoxide, flooding, temperature, and other environmental conditions and hazards, as well as to address personal emergencies, including injuries, medical emergencies or incapacitation. The Company serves approximately 6.7 million residential and small business customers throughout the United States and Canada. The Company's brands are ADT, ADT Pulse, ADT Always There, Companion Service and Creating Customers for Life. The Company faces competition from Protection One, Inc., Monitronics International, Inc., Vivint, Inc., Comcast Corporation and AT&T, Inc. The Company's operations are subject to numerous federal, state, provincial and local laws and regulations in the United States and Canada in areas including consumer protection, occupational licensing, environmental protection, labor and employment, tax, licensing and other laws and regulations.