You
Why did gross margin dip in September?
Assistant
Gross margin for September was 78.4%, down from 80.1%.
- Hosting rose $14,000 with the new EU region.
- Support headcount was flat, so the drop is all infrastructure.
You
Is the EU region cost going to stay that high?
Assistant
The EU region adds $14,000 a month in hosting and runs at about 30% utilization today. Utilization should reach 60% in Q1, which brings margin back to roughly 79.5%.
You
Give me a bridge from 80.1% to 78.4%.
Assistant
Margin bridge:
| Item | Impact |
|---|---|
| August margin | 80.1% |
| EU region hosting | -1.5 pts |
| Other | -0.2 pts |
| September margin | 78.4% |