Gross Margin % is calculated as gross profit divided by its revenue. Tucows's Gross Profit for the
three
months ended in Dec. 2023 was $17.8 Mil. Tucows's Revenue for the
three
months ended in Dec. 2023 was $87.0 Mil. Therefore, Tucows's Gross Margin % for the quarter that ended in Dec. 2023 was 20.49%.
Warning Sign:
Tucows Inc gross margin has been in long-term decline. The average rate of decline per year is -6.7%.
The historical rank and industry rank for Tucows's Gross Margin % or its related term are showing as below:
TCX'
s Gross Margin % Range Over the Past 10 Years
Min: 19.65 Med: 27.18 Max: 33.22
Current: 19.65
During the past 13 years, the highestGross Margin % of Tucows was 33.22%. The lowest was 19.65%. And the median was 27.18%.
TCX's Gross Margin % is ranked worse than 82.38% of 2628
companies
in the Software industry
Industry Median: 41.71
vs TCX: 19.65
Tucows had a gross margin of 20.49% for the quarter that ended in Dec. 2023 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Tucows was -6.70% per year.
Tucows Gross Margin % Historical Data
The historical data trend for Tucows'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, Tucows'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.
Tucows's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, Tucows's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Tucows'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.
Tucows (NAS:TCX) 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
Tucows had a gross margin of 20.49% for the quarter that ended in Dec. 2023 => Competition eroding margins
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.
Tucows Gross Margin % Related Terms
Thank you for viewing the detailed overview of Tucows's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Tucows Inc provides us consumers and small businesses with mobile phone services nationally and high-speed fixed Internet access in selected towns. The Company offers Mobile Service Enabler (MSE) solutions, as well as professional services to other retail mobile providers. The Company is also a global distributor of Internet services, including domain name registration, digital certificates, and email. It provides these services primarily through a global Internet-based distribution network of Internet Service Providers, web hosting companies, and other providers of Internet services to end-users. It operates in three segments: Domain Services, Mobile Services, and Fiber Internet Services. It generates the majority of its revenue from Domain Services.
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