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Software AG (HAM:SOW) Gross Margin % : 80.06% (As of Dec. 2023)


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What is Software AG Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Software AG's Gross Profit for the three months ended in Dec. 2023 was €250 Mil. Software AG's Revenue for the three months ended in Dec. 2023 was €313 Mil. Therefore, Software AG's Gross Margin % for the quarter that ended in Dec. 2023 was 80.06%.


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

HAM:SOW' s Gross Margin % Range Over the Past 10 Years
Min: 72.45   Med: 75.83   Max: 77.48
Current: 75.93


During the past 13 years, the highest Gross Margin % of Software AG was 77.48%. The lowest was 72.45%. And the median was 75.83%.

HAM:SOW's Gross Margin % is not ranked
in the Software industry.
Industry Median: 41.435 vs HAM:SOW: 75.93

Software AG had a gross margin of 80.06% for the quarter that ended in Dec. 2023 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Software AG was -0.50% per year.


Software AG Gross Margin % Historical Data

The historical data trend for Software AG'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.

Software AG Gross Margin % Chart

Software AG Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Gross Margin %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 77.20 76.38 77.35 75.36 75.93

Software AG Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Gross Margin % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 76.72 71.00 76.23 74.52 80.06

Competitive Comparison of Software AG's Gross Margin %

For the Software - Infrastructure subindustry, Software AG'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.


Software AG's Gross Margin % Distribution in the Software Industry

For the Software industry and Technology sector, Software AG's Gross Margin % distribution charts can be found below:

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



Software AG Gross Margin % Calculation

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

Software AG's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )=Gross Profit (A: Dec. 2023 ) / Revenue (A: Dec. 2023 )
=759.6 / 1000.29
=(Revenue - Cost of Goods Sold) / Revenue
=(1000.29 - 240.736) / 1000.29
=75.93 %

Software AG's Gross Margin for the quarter that ended in Dec. 2023 is calculated as


Gross Margin % (Q: Dec. 2023 )=Gross Profit (Q: Dec. 2023 ) / Revenue (Q: Dec. 2023 )
=250.3 / 312.62
=(Revenue - Cost of Goods Sold) / Revenue
=(312.62 - 62.352) / 312.62
=80.06 %

* 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.


Software AG  (HAM:SOW) 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

Software AG had a gross margin of 80.06% for the quarter that ended in Dec. 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.


Software AG Gross Margin % Related Terms

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Software AG Business Description

Traded in Other Exchanges
N/A
Address
Uhlandstrasse 12, Darmstadt, HE, DEU, 64297
Software AG is a Germany-based provider of software solutions for the banking, communication and media, local and federal government, energy, insurance, transportation, retail, and manufacturing end markets. Its services include business process management, portfolio management, risk and compliance management, operational intelligence, and streaming analytics, many of which are delivered via cloud-based software applications. The firm operates in three segments which include Digital Business, Adabas & Natural (A&N), and Professional Services (PS)The firm has operations in Germany; the USA, and other countries.

Software AG Headlines

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