Automatic Data Processing, Inc. stock research
FY2023 Q4
Automatic Data Processing (ADP) Gross Margin — Quarter Ended Jun 30, 2023
Revenue, gross profit, and gross margin all decreased compared to the immediately preceding quarter, while cost of revenue also declined. Compared to the same quarter one year earlier, revenue, gross profit, and gross margin improved, with cost of revenue slightly higher.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q4
Revenue, gross profit, and gross margin all decreased compared to the immediately preceding quarter, while cost of revenue also declined. Compared to the same quarter one year earlier, revenue, gross profit, and gross margin improved, with cost of revenue slightly higher.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: gross margin improved year-over-year as revenue grew faster than cost of revenue. Quarter-over-quarter, gross margin weakened as revenue declined more sharply than cost of revenue.
- Compared to the immediately preceding quarter, revenue, gross profit, and gross margin are lower, while cost of revenue is also lower. Compared to the same quarter one year earlier, revenue, gross profit, and gross margin are higher, with cost of revenue slightly higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
44.5%
Gross profit
$2.0B
Revenue
$4.5B
Cost of revenue
$2.5B
Quarter-over-quarter change
-2.3 pts
Year-over-year change
+2.3 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 |
|---|---|---|---|---|
| Mar 31, 2023 | $4.9B | $2.3B | $2.6B | 46.8% |
| Jun 30, 2023 | $4.5B | $2.0B | $2.5B | 44.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
-2.3 pts
Year-over-year change
Jun 30, 2022
+2.3 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 revenue and cost of revenue: gross margin improved year-over-year as revenue grew faster than cost of revenue. Quarter-over-quarter, gross margin weakened as revenue declined more sharply than cost of revenue.
Compared to the immediately preceding quarter, revenue, gross profit, and gross margin are lower, while cost of revenue is also lower. Compared to the same quarter one year earlier, revenue, gross profit, and gross margin are higher, with cost of revenue slightly higher.
Monitor the trend in cost of revenue relative to revenue, as its slower decline quarter-over-quarter contributed to the margin weakening.