Automatic Data Processing, Inc. stock research
FY2024 Q2
Automatic Data Processing (ADP) Gross Margin — Quarter Ended Dec 31, 2023
Revenue and gross profit were higher than both the prior quarter and the year-ago quarter. Cost of revenue was also higher, but the gross margin improved, indicating that gross profit increased at a faster pace than cost of revenue.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2024 Q2
Revenue and gross profit were higher than both the prior quarter and the year-ago quarter. Cost of revenue was also higher, but the gross margin improved, indicating that gross profit increased at a faster pace than cost of revenue.
- The most observable driver of the margin improvement is the larger increase in gross profit relative to the increase in cost of revenue, when comparing both the sequential and year-over-year periods.
- Sequentially, gross margin improved from the prior quarter. Year-over-year, gross margin was also higher than the same quarter one year ago.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
45.1%
Gross profit
$2.1B
Revenue
$4.7B
Cost of revenue
$2.6B
Quarter-over-quarter change
+0.9 pts
Year-over-year change
+0.9 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% |
| Dec 31, 2023 | $4.7B | $2.1B | $2.6B | 45.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+0.9 pts
Year-over-year change
Dec 31, 2022
+0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of the margin improvement is the larger increase in gross profit relative to the increase in cost of revenue, when comparing both the sequential and year-over-year periods.
Sequentially, gross margin improved from the prior quarter. Year-over-year, gross margin was also higher than the same quarter one year ago.
Monitor the trend in operating expenses, which constitute the largest component of cost of revenues as detailed in the filing.