Archer-Daniels-Midland Company stock research
FY2024 Q2
Archer-Daniels-Midland (ADM) Gross Margin — Quarter Ended Jun 30, 2024
Revenue increased from the prior quarter, but gross profit declined, leading to a lower gross margin. Compared to the same quarter last year, revenue decreased while gross profit also fell, yet gross margin improved significantly.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue increased from the prior quarter, but gross profit declined, leading to a lower gross margin. Compared to the same quarter last year, revenue decreased while gross profit also fell, yet gross margin improved significantly.
- The strongest observable margin driver is the relationship between cost of revenue and revenue: cost of revenue rose more slowly than revenue from the prior quarter, but gross profit still fell, indicating margin pressure. Compared to the year-ago quarter, cost of revenue decreased proportionally more than revenue, boosting gross margin.
- Gross margin weakened sequentially from the prior quarter, as gross profit declined despite higher revenue. On a year-over-year basis, gross margin improved substantially, driven by a larger reduction in cost of revenue relative to revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
22.7%
Gross profit
$1.4B
Revenue
$6.2B
Cost of revenue
$20.9B
Quarter-over-quarter change
-5.3 pts
Year-over-year change
+15.2 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 |
|---|---|---|---|---|
| Jun 30, 2023 | $25.2B | $1.9B | $23.3B | 7.5% |
| Sep 30, 2023 | $6.4B | $1.8B | $19.9B | 28.3% |
| Mar 31, 2024 | $5.9B | $1.7B | $20.2B | 27.9% |
| Jun 30, 2024 | $6.2B | $1.4B | $20.9B | 22.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-5.3 pts
Year-over-year change
Jun 30, 2023
+15.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between cost of revenue and revenue: cost of revenue rose more slowly than revenue from the prior quarter, but gross profit still fell, indicating margin pressure. Compared to the year-ago quarter, cost of revenue decreased proportionally more than revenue, boosting gross margin.
Gross margin weakened sequentially from the prior quarter, as gross profit declined despite higher revenue. On a year-over-year basis, gross margin improved substantially, driven by a larger reduction in cost of revenue relative to revenue.
Monitor the trend in cost of revenue relative to revenue, as its movement is the primary factor behind gross margin changes.