Automatic Data Processing, Inc. stock research
FY2024 Q1
Automatic Data Processing (ADP) Gross Margin — Quarter Ended Sep 30, 2023
Revenue and gross profit both increased compared to the same quarter last year, while cost of revenue also rose. Gross margin improved year-over-year but weakened slightly relative to the immediately preceding quarter.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2024 Q1
Revenue and gross profit both increased compared to the same quarter last year, while cost of revenue also rose. Gross margin improved year-over-year but weakened slightly relative to the immediately preceding quarter.
- The year-over-year increase in gross margin is the strongest observable driver, as revenue grew more than cost of revenue. In contrast, the margin was lower compared to the prior quarter, with revenue and cost essentially unchanged.
- Revenue and gross profit were higher than the same quarter last year, and cost of revenue was also higher. Gross margin improved compared to a year ago but weakened compared to the prior quarter.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
44.3%
Gross profit
$2.0B
Revenue
$4.5B
Cost of revenue
$2.5B
Quarter-over-quarter change
-0.2 pts
Year-over-year change
+1.0 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 | $4.9B | $2.3B | $2.6B | 46.8% |
| Jun 30, 2023 | $4.5B | $2.0B | $2.5B | 44.5% |
| Sep 30, 2023 | $4.5B | $2.0B | $2.5B | 44.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-0.2 pts
Year-over-year change
Sep 30, 2022
+1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The year-over-year increase in gross margin is the strongest observable driver, as revenue grew more than cost of revenue. In contrast, the margin was lower compared to the prior quarter, with revenue and cost essentially unchanged.
Revenue and gross profit were higher than the same quarter last year, and cost of revenue was also higher. Gross margin improved compared to a year ago but weakened compared to the prior quarter.
Monitor whether the gross margin trend can sustain its year-over-year improvement in upcoming quarters.