FactSet Research Systems Inc. stock research
FY2023 Q4
FactSet Research Systems (FDS) Gross Margin — Quarter Ended Aug 31, 2023
Revenue increased relative to the prior quarter and the same quarter last year, while gross profit improved compared to a year ago but was lower than the preceding quarter. The cost of revenue rose at a faster pace than revenue, causing gross margin to weaken sequentially and decline versus the year-ago period.
Gross margin takeaway
Quarter ended Aug 31, 2023 · FY2023 Q4
Revenue increased relative to the prior quarter and the same quarter last year, while gross profit improved compared to a year ago but was lower than the preceding quarter. The cost of revenue rose at a faster pace than revenue, causing gross margin to weaken sequentially and decline versus the year-ago period.
- The strongest observable driver of gross margin change is the relationship between cost of revenue and revenue. Sequentially, cost of revenue increased while revenue rose only modestly, compressing margin.
- Compared to the immediately preceding quarter, gross margin weakened as cost of revenue increased more rapidly than revenue. Versus the same quarter one year earlier, gross margin was slightly lower, with revenue growth outpaced by a proportionally larger rise in cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
50.8%
Gross profit
$272.1M
Revenue
$535.8M
Cost of revenue
$263.7M
Quarter-over-quarter change
-3.6 pts
Year-over-year change
-0.8 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 |
|---|---|---|---|---|
| Feb 28, 2023 | $515.1M | $274.3M | $240.8M | 53.2% |
| May 31, 2023 | $529.8M | $288.1M | $241.7M | 54.4% |
| Aug 31, 2023 | $535.8M | $272.1M | $263.7M | 50.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
May 31, 2023
-3.6 pts
Year-over-year change
Aug 31, 2022
-0.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of gross margin change is the relationship between cost of revenue and revenue. Sequentially, cost of revenue increased while revenue rose only modestly, compressing margin.
Compared to the immediately preceding quarter, gross margin weakened as cost of revenue increased more rapidly than revenue. Versus the same quarter one year earlier, gross margin was slightly lower, with revenue growth outpaced by a proportionally larger rise in cost of revenue.
Monitor the trend in cost of revenue relative to revenue growth, as its faster increase has pressured gross margin both sequentially and year over year.