Adobe Inc. stock research
FY2023 Q2
Adobe (ADBE) Gross Margin — Quarter Ended Jun 2, 2023
Revenue, gross profit, and cost of revenue all increased compared to both the prior quarter and the same quarter last year. Gross margin improved over both periods, reflecting that gross profit grew faster than revenue.
Gross margin takeaway
Quarter ended Jun 2, 2023 · FY2023 Q2
Revenue, gross profit, and cost of revenue all increased compared to both the prior quarter and the same quarter last year. Gross margin improved over both periods, reflecting that gross profit grew faster than revenue.
- The strongest observable margin driver is the consistent increase in gross profit relative to revenue, as gross margin reached its highest level among the three periods. This suggests that cost of revenue grew at a slower pace than revenue.
- Compared to the preceding quarter, revenue and gross profit were higher while cost of revenue was slightly higher, leading to an improved gross margin. Versus the same quarter one year ago, all three metrics were higher, with gross margin again improving.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
88.1%
Gross profit
$4.2B
Revenue
$4.8B
Cost of revenue
$572.0M
Quarter-over-quarter change
+0.3 pts
Year-over-year change
+0.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 3, 2023 | $4.7B | $4.1B | $568.0M | 87.8% |
| Jun 2, 2023 | $4.8B | $4.2B | $572.0M | 88.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 3, 2023
+0.3 pts
Year-over-year change
FY2022 Q2
+0.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the consistent increase in gross profit relative to revenue, as gross margin reached its highest level among the three periods. This suggests that cost of revenue grew at a slower pace than revenue.
Compared to the preceding quarter, revenue and gross profit were higher while cost of revenue was slightly higher, leading to an improved gross margin. Versus the same quarter one year ago, all three metrics were higher, with gross margin again improving.
Monitor whether the trend of cost of revenue growing more slowly than revenue continues, as this has been the pattern supporting margin expansion.