CDW Corporation stock research
FY2023 Q4
CDW (CDW) Gross Margin — Quarter Ended Dec 31, 2023
In the current quarter, revenue decreased while cost of revenue also decreased, resulting in unchanged gross profit and a higher gross margin compared to both the prior quarter and the same quarter last year. The gross margin improvement reflects a larger proportional decline in cost of revenue relative to revenue.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
In the current quarter, revenue decreased while cost of revenue also decreased, resulting in unchanged gross profit and a higher gross margin compared to both the prior quarter and the same quarter last year. The gross margin improvement reflects a larger proportional decline in cost of revenue relative to revenue.
- The primary observable driver of the gross margin change is the relationship between revenue and cost of revenue: gross profit remained constant, so the margin moved inversely with revenue. As revenue declined, the margin increased.
- Sequentially, revenue was lower and cost of revenue was lower, while gross profit was stable, leading to an improved gross margin. Year-over-year, the same pattern held: lower revenue and lower cost of revenue with stable gross profit yielded a higher gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
23.0%
Gross profit
$1.2B
Revenue
$5.0B
Cost of revenue
$3.9B
Quarter-over-quarter change
+1.2 pts
Year-over-year change
+1.3 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 | $5.1B | $1.1B | $4.0B | 21.3% |
| Jun 30, 2023 | $5.6B | $1.2B | $4.4B | 21.0% |
| Sep 30, 2023 | $5.6B | $1.2B | $4.4B | 21.8% |
| Dec 31, 2023 | $5.0B | $1.2B | $3.9B | 23.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+1.2 pts
Year-over-year change
Dec 31, 2022
+1.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary observable driver of the gross margin change is the relationship between revenue and cost of revenue: gross profit remained constant, so the margin moved inversely with revenue. As revenue declined, the margin increased.
Sequentially, revenue was lower and cost of revenue was lower, while gross profit was stable, leading to an improved gross margin. Year-over-year, the same pattern held: lower revenue and lower cost of revenue with stable gross profit yielded a higher gross margin.
Monitor whether gross profit dollars remain stable as revenue and cost of revenue continue to evolve.