CVS Health Corporation stock research
FY2023 Q3
CVS Health (CVS) Gross Margin — Quarter Ended Sep 30, 2023
Revenue increased compared to both the prior quarter and the same quarter last year, while gross profit rose year over year but declined sequentially. Gross margin improved from the prior year but weakened from the preceding quarter.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue increased compared to both the prior quarter and the same quarter last year, while gross profit rose year over year but declined sequentially. Gross margin improved from the prior year but weakened from the preceding quarter.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue grew while cost of revenue increased at a faster pace sequentially, compressing gross margin. Year over year, revenue growth outpaced cost of revenue growth, supporting margin expansion.
- Compared to the prior quarter, gross profit was lower and gross margin weakened despite higher revenue, indicating cost pressures. Versus the same quarter last year, both gross profit and gross margin improved, reflecting stronger revenue growth relative to cost.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
39.1%
Gross profit
$35.1B
Revenue
$89.8B
Cost of revenue
$54.7B
Quarter-over-quarter change
-0.7 pts
Year-over-year change
+1.1 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 | $85.3B | $33.8B | $51.5B | 39.7% |
| Jun 30, 2023 | $88.9B | $35.4B | $53.5B | 39.8% |
| Sep 30, 2023 | $89.8B | $35.1B | $54.7B | 39.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-0.7 pts
Year-over-year change
Sep 30, 2022
+1.1 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 grew while cost of revenue increased at a faster pace sequentially, compressing gross margin. Year over year, revenue growth outpaced cost of revenue growth, supporting margin expansion.
Compared to the prior quarter, gross profit was lower and gross margin weakened despite higher revenue, indicating cost pressures. Versus the same quarter last year, both gross profit and gross margin improved, reflecting stronger revenue growth relative to cost.
Monitor the trajectory of cost of revenue relative to revenue, as its faster sequential growth drove margin compression.