CVS Health Corporation stock research
FY2024 Q2
CVS Health (CVS) Gross Margin — Quarter Ended Jun 30, 2024
Revenue increased compared to both the prior quarter and the same quarter last year. Gross profit rose sharply year-over-year but only slightly sequentially, while cost of revenue decreased year-over-year but increased from the prior quarter; gross margin improved significantly from a year ago but weakened slightly from the previous quarter.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue increased compared to both the prior quarter and the same quarter last year. Gross profit rose sharply year-over-year but only slightly sequentially, while cost of revenue decreased year-over-year but increased from the prior quarter; gross margin improved significantly from a year ago but weakened slightly from the previous quarter.
- The strongest observable driver of gross margin was the year-over-year reduction in cost of revenue combined with higher revenue, which expanded gross profit and margin. The filing describes revenue growth as supported by the Health Care Benefits and Pharmacy & Consumer Wellness segments, with a partial offset from the Health Services segment.
- Compared to the prior quarter, gross margin was slightly lower, as revenue and cost of revenue both increased, with cost increasing more. Compared to the same quarter last year, gross margin was higher, as revenue increased and cost of revenue decreased.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
45.2%
Gross profit
$41.2B
Revenue
$91.2B
Cost of revenue
$50.0B
Quarter-over-quarter change
-0.4 pts
Year-over-year change
+5.4 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 | $89.8B | $35.1B | $54.7B | 39.1% |
| Dec 31, 2023 | $93.8B | $36.4B | $57.4B | 38.8% |
| Mar 31, 2024 | $88.4B | $40.4B | $48.1B | 45.6% |
| Jun 30, 2024 | $91.2B | $41.2B | $50.0B | 45.2% |
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
+5.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of gross margin was the year-over-year reduction in cost of revenue combined with higher revenue, which expanded gross profit and margin. The filing describes revenue growth as supported by the Health Care Benefits and Pharmacy & Consumer Wellness segments, with a partial offset from the Health Services segment.
Compared to the prior quarter, gross margin was slightly lower, as revenue and cost of revenue both increased, with cost increasing more. Compared to the same quarter last year, gross margin was higher, as revenue increased and cost of revenue decreased.
Monitor the sequential increase in cost of revenue, which outpaced the revenue growth and contributed to the slight gross margin decline.