Analog Devices, Inc. stock research
FY2023 Q2
Analog Devices (ADI) Gross Margin — Quarter Ended Apr 29, 2023
Revenue increased while cost of revenue remained unchanged, allowing gross profit to stay level and gross margin to improve slightly. Compared with the prior quarter, revenue was higher, cost of revenue was stable, and gross margin edged up; versus the same quarter a year ago, revenue and gross profit were both higher, cost of revenue was also higher, and gross margin was slightly better.
Gross margin takeaway
Quarter ended Apr 29, 2023 · FY2023 Q2
Revenue increased while cost of revenue remained unchanged, allowing gross profit to stay level and gross margin to improve slightly. Compared with the prior quarter, revenue was higher, cost of revenue was stable, and gross margin edged up; versus the same quarter a year ago, revenue and gross profit were both higher, cost of revenue was also higher, and gross margin was slightly better.
- The most observable driver of the gross margin improvement was the combination of higher revenue and stable cost of revenue, which lifted the ratio of gross profit to revenue.
- Current quarter revenue was higher than both the prior quarter and the year-ago quarter. Gross profit was unchanged from the prior quarter but higher than the year-ago quarter. Cost of revenue was stable sequentially and higher year over year. Gross margin was slightly improved compared with both periods.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
65.7%
Gross profit
$2.1B
Revenue
$3.3B
Cost of revenue
$1.1B
Quarter-over-quarter change
+0.4 pts
Year-over-year change
+0.3 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 |
|---|---|---|---|---|
| Jan 28, 2023 | $3.2B | $2.1B | $1.1B | 65.4% |
| Apr 29, 2023 | $3.3B | $2.1B | $1.1B | 65.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jan 28, 2023
+0.4 pts
Year-over-year change
Apr 30, 2022
+0.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of the gross margin improvement was the combination of higher revenue and stable cost of revenue, which lifted the ratio of gross profit to revenue.
Current quarter revenue was higher than both the prior quarter and the year-ago quarter. Gross profit was unchanged from the prior quarter but higher than the year-ago quarter. Cost of revenue was stable sequentially and higher year over year. Gross margin was slightly improved compared with both periods.
Monitor the trajectory of cost of revenue, as it remained flat despite revenue growth, and the revenue trends by end market highlighted in the filing.