Broadcom Inc. stock research
FY2024 Q3
Broadcom (AVGO) Gross Margin — Quarter Ended Aug 4, 2024
Revenue increased compared to the prior quarter, while cost of revenue remained stable, leading to higher gross profit and an improved gross margin. Relative to the same quarter a year earlier, revenue was higher and gross profit was higher, but gross margin was lower due to cost of revenue increasing at a faster rate.
Gross margin takeaway
Quarter ended Aug 4, 2024 · FY2024 Q3
Revenue increased compared to the prior quarter, while cost of revenue remained stable, leading to higher gross profit and an improved gross margin. Relative to the same quarter a year earlier, revenue was higher and gross profit was higher, but gross margin was lower due to cost of revenue increasing at a faster rate.
- The improvement in gross margin versus the preceding quarter was driven by revenue growth outpacing the change in cost of revenue. The year-over-year decline in gross margin was primarily associated with a proportionally larger increase in cost of revenue relative to revenue.
- Compared to the immediately preceding quarter, gross margin improved. Versus the same quarter one year earlier, gross margin weakened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
63.9%
Gross profit
$8.4B
Revenue
$13.1B
Cost of revenue
$4.7B
Quarter-over-quarter change
+1.7 pts
Year-over-year change
-5.5 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 |
|---|---|---|---|---|
| Oct 29, 2023 | $9.3B | $6.4B | $2.9B | 68.9% |
| Feb 4, 2024 | $12.0B | $7.4B | $4.6B | 61.7% |
| May 5, 2024 | $12.5B | $7.8B | $4.7B | 62.3% |
| Aug 4, 2024 | $13.1B | $8.4B | $4.7B | 63.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
May 5, 2024
+1.7 pts
Year-over-year change
Jul 30, 2023
-5.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The improvement in gross margin versus the preceding quarter was driven by revenue growth outpacing the change in cost of revenue. The year-over-year decline in gross margin was primarily associated with a proportionally larger increase in cost of revenue relative to revenue.
Compared to the immediately preceding quarter, gross margin improved. Versus the same quarter one year earlier, gross margin weakened.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters, given its influence on gross margin stability.