A. O. Smith Corporation stock research
FY2024 Q2
A. O. Smith (AOS) Gross Margin — Quarter Ended Jun 30, 2024
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin weakened slightly from the prior quarter and more notably from a year ago, as cost growth outpaced revenue growth.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin weakened slightly from the prior quarter and more notably from a year ago, as cost growth outpaced revenue growth.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue increased from both comparison periods, but cost of revenue grew at a faster pace, compressing gross margin.
- Compared to the immediately preceding quarter, gross margin was lower; compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons, while cost of revenue was higher as well.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
38.7%
Gross profit
$396.0M
Revenue
$1.0B
Cost of revenue
$628.3M
Quarter-over-quarter change
-0.6 pts
Year-over-year change
-1.4 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 |
|---|---|---|---|---|
| Sep 30, 2023 | $937.5M | $356.2M | $581.3M | 38.0% |
| Dec 31, 2023 | $988.1M | $369.8M | $618.3M | 37.4% |
| Mar 31, 2024 | $978.8M | $384.7M | $594.1M | 39.3% |
| Jun 30, 2024 | $1.0B | $396.0M | $628.3M | 38.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-0.6 pts
Year-over-year change
Jun 30, 2023
-1.4 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: revenue increased from both comparison periods, but cost of revenue grew at a faster pace, compressing gross margin.
Compared to the immediately preceding quarter, gross margin was lower; compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons, while cost of revenue was higher as well.
Monitor the allowance for credit losses, which increased from the end of the prior fiscal year to the current quarter end.