Archer-Daniels-Midland Company stock research
FY2023 Q3
Archer-Daniels-Midland (ADM) Gross Margin — Quarter Ended Sep 30, 2023
Revenue decreased while gross profit remained stable, leading to a higher gross margin as cost of revenue declined more sharply. Compared to the prior quarter, revenue and cost of revenue both fell, but gross profit was slightly lower, resulting in a significantly improved gross margin.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue decreased while gross profit remained stable, leading to a higher gross margin as cost of revenue declined more sharply. Compared to the prior quarter, revenue and cost of revenue both fell, but gross profit was slightly lower, resulting in a significantly improved gross margin.
- The strongest observable margin driver is the reduction in cost of revenue relative to revenue, which directly lifted gross margin. This relationship is evident in the current quarter's figures compared to both the prior quarter and the year-ago quarter.
- Compared to the immediately preceding quarter, revenue and cost of revenue were lower, while gross profit was slightly lower, resulting in a higher gross margin. Versus the same quarter one year earlier, revenue and cost of revenue were lower, gross profit was stable, and gross margin was higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
28.3%
Gross profit
$1.8B
Revenue
$6.4B
Cost of revenue
$19.9B
Quarter-over-quarter change
+20.8 pts
Year-over-year change
+21.0 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 31, 2023 | $24.1B | $2.1B | $22.0B | 8.6% |
| Jun 30, 2023 | $25.2B | $1.9B | $23.3B | 7.5% |
| Sep 30, 2023 | $6.4B | $1.8B | $19.9B | 28.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
+20.8 pts
Year-over-year change
Sep 30, 2022
+21.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the reduction in cost of revenue relative to revenue, which directly lifted gross margin. This relationship is evident in the current quarter's figures compared to both the prior quarter and the year-ago quarter.
Compared to the immediately preceding quarter, revenue and cost of revenue were lower, while gross profit was slightly lower, resulting in a higher gross margin. Versus the same quarter one year earlier, revenue and cost of revenue were lower, gross profit was stable, and gross margin was higher.
Monitor the trend in cost of revenue relative to revenue, as its movement has been the primary factor influencing gross margin changes.