Centene Corporation stock research
FY2024 Q2
Centene (CNC) Gross Margin — Quarter Ended Jun 30, 2024
In the current quarter, revenue and gross profit both decreased compared to the prior quarter, while cost of revenue increased, resulting in a lower gross margin. Compared to the same quarter last year, revenue increased but gross profit decreased, and cost of revenue decreased, yet gross margin weakened.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
In the current quarter, revenue and gross profit both decreased compared to the prior quarter, while cost of revenue increased, resulting in a lower gross margin. Compared to the same quarter last year, revenue increased but gross profit decreased, and cost of revenue decreased, yet gross margin weakened.
- The strongest observable margin driver is the decline in gross profit relative to revenue, as gross profit decreased despite revenue growth year-over-year, indicating that the proportion of revenue retained as gross profit has diminished.
- Sequentially, gross margin weakened from the previous quarter, with revenue and gross profit lower. Year-over-year, gross margin also weakened, as revenue growth was accompanied by a decline in gross profit.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
12.6%
Gross profit
$4.5B
Revenue
$36.0B
Cost of revenue
$680.0M
Quarter-over-quarter change
-0.4 pts
Year-over-year change
-0.7 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 | $35.0B | $4.6B | $856.0M | 13.2% |
| Dec 31, 2023 | $35.3B | $3.7B | $961.0M | 10.6% |
| Mar 31, 2024 | $36.3B | $4.7B | $669.0M | 13.0% |
| Jun 30, 2024 | $36.0B | $4.5B | $680.0M | 12.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-0.4 pts
Year-over-year change
Jun 30, 2023
-0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the decline in gross profit relative to revenue, as gross profit decreased despite revenue growth year-over-year, indicating that the proportion of revenue retained as gross profit has diminished.
Sequentially, gross margin weakened from the previous quarter, with revenue and gross profit lower. Year-over-year, gross margin also weakened, as revenue growth was accompanied by a decline in gross profit.
Monitor the impact of the transition to the new third-party pharmacy benefit manager, as discussed in the filing, on future cost of revenue and gross profit.