Quest Diagnostics (DGX) Gross Margin — Quarter Ended Jun 30, 2023

Revenue was stable compared to the previous quarter, while gross profit increased and cost of revenue decreased, leading to an improved gross margin. Compared to the same quarter last year, revenue and gross profit were lower, and gross margin weakened.

Gross margin takeaway

Quarter ended Jun 30, 2023 · FY2023 Q2

The improvement in gross margin from the prior quarter was primarily driven by a reduction in cost of revenue, outpacing the change in revenue.
Sequentially, the company achieved higher gross profit and gross margin despite stable revenue. Year over year, both revenue and gross profit declined, and gross margin contracted.

Gross margin snapshot

The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.

Gross margin

33.9%

Gross profit

$792.0M

Revenue

$2.3B

Cost of revenue

$1.5B

Quarter-over-quarter change

+0.8 pts

Year-over-year change

-0.5 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
Mar 31, 2023	$2.3B	$771.0M	$1.6B	33.1%
Jun 30, 2023	$2.3B	$792.0M	$1.5B	33.9%

Quarterly comparisons

Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.

Previous-quarter change

Mar 31, 2023

+0.8 pts

Year-over-year change

Jun 30, 2022

-0.5 pts

What the margin says

Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.

The improvement in gross margin from the prior quarter was primarily driven by a reduction in cost of revenue, outpacing the change in revenue.

Sequentially, the company achieved higher gross profit and gross margin despite stable revenue. Year over year, both revenue and gross profit declined, and gross margin contracted.

Monitor the trend in cost of revenue relative to revenue, as its reduction contributed to margin improvement.