Adobe Inc. stock research
FY2023 Q3
Adobe (ADBE) Gross Margin — Quarter Ended Sep 1, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin remained stable sequentially and improved from the prior year, reflecting that gross profit grew faster than cost of revenue.
Gross margin takeaway
Quarter ended Sep 1, 2023 · FY2023 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin remained stable sequentially and improved from the prior year, reflecting that gross profit grew faster than cost of revenue.
- The strongest observable margin driver is the consistent growth in gross profit outpacing the growth in cost of revenue, leading to an expanded margin relative to the prior year. Over the sequential quarter, the gross margin was unchanged, indicating a balanced relationship between revenue and cost increases.
- Compared to the immediately preceding quarter, gross margin was stable. Compared to the same quarter one year earlier, gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
88.1%
Gross profit
$4.3B
Revenue
$4.9B
Cost of revenue
$580.0M
Quarter-over-quarter change
+0.0 pts
Year-over-year change
+0.5 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% |
| Sep 1, 2023 | $4.9B | $4.3B | $580.0M | 88.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 2, 2023
+0.0 pts
Year-over-year change
FY2022 Q3
+0.5 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 growth in gross profit outpacing the growth in cost of revenue, leading to an expanded margin relative to the prior year. Over the sequential quarter, the gross margin was unchanged, indicating a balanced relationship between revenue and cost increases.
Compared to the immediately preceding quarter, gross margin was stable. Compared to the same quarter one year earlier, gross margin improved.
Monitor the trajectory of cost of revenue growth relative to revenue growth, as any acceleration in cost growth could pressure the high gross margin.