Align Technology, Inc. stock research
FY2023 Q3
Align Technology (ALGN) Gross Margin — Quarter Ended Sep 30, 2023
The current quarter's gross margin weakened compared to the prior quarter and was slightly lower than the same quarter last year. Revenue declined from the prior quarter but increased year-over-year, while cost of revenue rose in both comparisons, resulting in lower gross profit relative to revenue.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
The current quarter's gross margin weakened compared to the prior quarter and was slightly lower than the same quarter last year. Revenue declined from the prior quarter but increased year-over-year, while cost of revenue rose in both comparisons, resulting in lower gross profit relative to revenue.
- The strongest observable driver was the increase in cost of revenue, which grew faster than revenue both sequentially and year-over-year, compressing gross margin.
- Sequentially, revenue and gross profit were lower, cost of revenue was higher, and gross margin weakened. Year-over-year, revenue and gross profit were higher, but cost of revenue increased more, leading to a slightly lower gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
69.1%
Gross profit
$663.1M
Revenue
$960.2M
Cost of revenue
$297.1M
Quarter-over-quarter change
-2.2 pts
Year-over-year change
-0.5 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 | $943.1M | $660.7M | $282.5M | 70.0% |
| Jun 30, 2023 | $1.0B | $713.6M | $288.6M | 71.2% |
| Sep 30, 2023 | $960.2M | $663.1M | $297.1M | 69.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-2.2 pts
Year-over-year change
Sep 30, 2022
-0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver was the increase in cost of revenue, which grew faster than revenue both sequentially and year-over-year, compressing gross margin.
Sequentially, revenue and gross profit were lower, cost of revenue was higher, and gross margin weakened. Year-over-year, revenue and gross profit were higher, but cost of revenue increased more, leading to a slightly lower gross margin.
Monitor the trajectory of cost of revenue relative to revenue.