Quest Diagnostics Incorporated stock research
FY2023 Q4
Quest Diagnostics (DGX) Gross Margin — Quarter Ended Dec 31, 2023
Revenue was stable sequentially and year-over-year; cost of revenue was higher sequentially but flat versus the prior year. Gross profit and gross margin were lower both sequentially and year-over-year, reflecting a weakened margin structure.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue was stable sequentially and year-over-year; cost of revenue was higher sequentially but flat versus the prior year. Gross profit and gross margin were lower both sequentially and year-over-year, reflecting a weakened margin structure.
- The gross margin weakened from both the prior quarter and the year-ago quarter, driven by a higher share of cost of revenue relative to revenue. The sequential comparison shows cost of revenue increasing while revenue was unchanged, compressing gross profit.
- Compared to the immediately preceding quarter, gross margin was lower as revenue remained level while cost of revenue increased. Compared to the same quarter one year earlier, gross margin was also lower, with revenue flat and gross profit slightly lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
32.2%
Gross profit
$736.0M
Revenue
$2.3B
Cost of revenue
$1.6B
Quarter-over-quarter change
-0.7 pts
Year-over-year change
-0.3 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 | $2.3B | $771.0M | $1.6B | 33.1% |
| Jun 30, 2023 | $2.3B | $792.0M | $1.5B | 33.9% |
| Sep 30, 2023 | $2.3B | $754.0M | $1.5B | 32.9% |
| Dec 31, 2023 | $2.3B | $736.0M | $1.6B | 32.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
-0.7 pts
Year-over-year change
Dec 31, 2022
-0.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin weakened from both the prior quarter and the year-ago quarter, driven by a higher share of cost of revenue relative to revenue. The sequential comparison shows cost of revenue increasing while revenue was unchanged, compressing gross profit.
Compared to the immediately preceding quarter, gross margin was lower as revenue remained level while cost of revenue increased. Compared to the same quarter one year earlier, gross margin was also lower, with revenue flat and gross profit slightly lower.
Monitor the trajectory of cost of revenue, as its sequential increase without a corresponding rise in revenue was the primary factor behind the margin decline.