Equinix, Inc. stock research
FY2023 Q2
Equinix (EQIX) Gross Margin — Quarter Ended Jun 30, 2023
Revenue decreased relative to the preceding quarter but increased compared to the same quarter one year earlier. Gross profit declined more sharply than revenue on a sequential basis, while cost of revenue rose both sequentially and year-over-year, resulting in a lower gross margin for the current quarter.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue decreased relative to the preceding quarter but increased compared to the same quarter one year earlier. Gross profit declined more sharply than revenue on a sequential basis, while cost of revenue rose both sequentially and year-over-year, resulting in a lower gross margin for the current quarter.
- The most observable margin driver is the sequential increase in cost of revenue combined with a decline in revenue, which compressed gross profit and margin. Compared to the prior year, cost of revenue grew at a faster pace than revenue, further weighing on margin.
- Gross margin weakened against both the preceding quarter and the same quarter one year earlier. The decline was more pronounced sequentially, as revenue fell while cost of revenue rose.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
47.4%
Gross profit
$958.0M
Revenue
$2.0B
Cost of revenue
$1.1B
Quarter-over-quarter change
-7.3 pts
Year-over-year change
-1.4 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 |
|---|---|---|---|---|
| Mar 31, 2023 | $2.2B | $1.2B | $1.0B | 54.8% |
| Jun 30, 2023 | $2.0B | $958.0M | $1.1B | 47.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
-7.3 pts
Year-over-year change
Jun 30, 2022
-1.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable margin driver is the sequential increase in cost of revenue combined with a decline in revenue, which compressed gross profit and margin. Compared to the prior year, cost of revenue grew at a faster pace than revenue, further weighing on margin.
Gross margin weakened against both the preceding quarter and the same quarter one year earlier. The decline was more pronounced sequentially, as revenue fell while cost of revenue rose.
Monitor the trajectory of cost of revenue, as its growth rate diverged from revenue in the current quarter.