NOWNEUTRAL

NOW Gross Margin Analysis

70.7%

Higher than 100% of TECHNOLOGY sector peers

Updated 77h ago·SEC filings & market data

Key Takeaway

Gross margin is the percentage of revenue left after covering the direct costs of producing goods or services, and NOW's current 70.7% means it retains over 70 cents per dollar of sales before other expenses.

Sector Performance

100th percentile

NOW

70.7%

Sector Median

57.3%

Sector Avg

56.5%

Prior Period

75.1%(Jul 2026)

↓ Declining

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Deep Analysis

That level towers over the sector median of 53.1%, placing NOW in the 100th percentile among its technology peers. The trend is incomplete: the year-over-year change is N/A, but quarter-over-quarter the margin fell 5.9%, dropping from 75.1% to 70.7%. The combination of an extremely high margin with a recent quarterly decline suggests possible pricing or cost pressure, yet the absolute level still leaves a wide safety cushion over competitors. This mixed signal implies moderate risk: the erosion deserves monitoring, but the far-above-peer level limits the downside impact on valuation. Overall, the metric supports the NEUTRAL verdict because the exceptional level argues for strength while the negative QoQ movement argues for caution, balancing out.

Frequently Asked Questions

What does the Gross Margin tell investors about NOW?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does NOW's Gross Margin compare to its sector?

NOW's Gross Margin of 70.7% compares to a TECHNOLOGY sector median of 57.3%, placing it in the 100th percentile.

Who are NOW's closest peers by Gross Margin?

The closest TECHNOLOGY peers by Gross Margin include: KLAC (61.4%), QCOM (53.1%), TXN (61.4%), LRCX (51.7%), INTC (40.4%).

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Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.