Alphabet Inc. stock research
FY2023 Q1
Alphabet (GOOGL) Gross Margin — Quarter Ended Mar 31, 2023
Revenue decreased from the prior quarter but was slightly higher than a year ago. Gross profit and cost of revenue both declined sequentially, while gross margin improved compared to the prior quarter but weakened relative to the same quarter last year.
Gross margin takeaway
Quarter ended Mar 31, 2023 · FY2023 Q1
Revenue decreased from the prior quarter but was slightly higher than a year ago. Gross profit and cost of revenue both declined sequentially, while gross margin improved compared to the prior quarter but weakened relative to the same quarter last year.
- Gross margin improvement from the preceding quarter was primarily driven by a proportionally larger decline in cost of revenue relative to the decrease in revenue. The year-ago comparison shows a slightly lower gross margin, indicating a mixed trend over the two periods.
- Compared to the immediately preceding quarter, revenue and cost of revenue were both lower, but gross margin was higher. Compared to the same quarter one year earlier, revenue was slightly higher and gross profit was also higher, yet gross margin was slightly lower, reflecting a shift in the proportional relationship between cost of revenue and revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
56.1%
Gross profit
$39.2B
Revenue
$69.8B
Cost of revenue
$30.6B
Quarter-over-quarter change
n/a
Year-over-year change
n/a
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 | $69.8B | $39.2B | $30.6B | 56.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Previous quarter unavailable
n/a
Year-over-year change
Year-ago quarter unavailable
n/a
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross margin improvement from the preceding quarter was primarily driven by a proportionally larger decline in cost of revenue relative to the decrease in revenue. The year-ago comparison shows a slightly lower gross margin, indicating a mixed trend over the two periods.
Compared to the immediately preceding quarter, revenue and cost of revenue were both lower, but gross margin was higher. Compared to the same quarter one year earlier, revenue was slightly higher and gross profit was also higher, yet gross margin was slightly lower, reflecting a shift in the proportional relationship between cost of revenue and revenue.
Monitor the trajectory of cost of revenue relative to revenue in future quarters, as changes in this ratio directly influence gross margin stability.