F5, Inc. stock research
FY2023 Q3
F5 (FFIV) Gross Margin — Quarter Ended Jun 30, 2023
Revenue was essentially stable compared to the prior quarter, while cost of revenue decreased, leading to higher gross profit and an improved gross margin. Year-over-year, revenue grew, but cost of revenue increased more, resulting in a slightly weakened gross margin.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q3
Revenue was essentially stable compared to the prior quarter, while cost of revenue decreased, leading to higher gross profit and an improved gross margin. Year-over-year, revenue grew, but cost of revenue increased more, resulting in a slightly weakened gross margin.
- The strongest observable driver for the current quarter's margin improvement is the reduction in cost of revenue relative to the prior quarter, which increased gross profit despite flat revenue.
- Compared to the preceding quarter, gross margin improved as cost of revenue dropped and gross profit rose. Relative to the same quarter one year earlier, gross margin weakened because cost of revenue grew at a faster pace than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
79.8%
Gross profit
$561.0M
Revenue
$702.6M
Cost of revenue
$141.7M
Quarter-over-quarter change
+2.0 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 |
|---|---|---|---|---|
| Mar 31, 2023 | $703.2M | $547.5M | $155.7M | 77.9% |
| Jun 30, 2023 | $702.6M | $561.0M | $141.7M | 79.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+2.0 pts
Year-over-year change
Jun 30, 2022
-0.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver for the current quarter's margin improvement is the reduction in cost of revenue relative to the prior quarter, which increased gross profit despite flat revenue.
Compared to the preceding quarter, gross margin improved as cost of revenue dropped and gross profit rose. Relative to the same quarter one year earlier, gross margin weakened because cost of revenue grew at a faster pace than revenue.
Monitor whether cost of revenue remains at the lower sequential level or reverts, as it directly affects gross margin trends.