Alphabet Inc. stock research
FY2024 Q1
Alphabet (GOOGL) Gross Margin — Quarter Ended Mar 31, 2024
Revenue and gross profit both decreased sequentially but increased compared to the same quarter last year. Gross margin improved from both the prior quarter and the year-ago quarter, driven by a proportionally higher reduction in cost of revenue relative to revenue in the sequential comparison.
Gross margin takeaway
Quarter ended Mar 31, 2024 · FY2024 Q1
Revenue and gross profit both decreased sequentially but increased compared to the same quarter last year. Gross margin improved from both the prior quarter and the year-ago quarter, driven by a proportionally higher reduction in cost of revenue relative to revenue in the sequential comparison.
- The strongest observable margin driver is the decline in cost of revenue as a share of revenue in the sequential comparison, which lifted gross margin. The year-over-year improvement in gross margin also reflects a favorable relationship between revenue growth and cost of revenue growth.
- Compared to the immediately preceding quarter, gross margin improved and cost of revenue declined more sharply than revenue. Relative to the same quarter one year earlier, both revenue and gross profit were higher, and gross margin also strengthened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
58.1%
Gross profit
$46.8B
Revenue
$80.5B
Cost of revenue
$33.7B
Quarter-over-quarter change
+1.7 pts
Year-over-year change
+2.0 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 |
|---|---|---|---|---|
| Jun 30, 2023 | $74.6B | $42.7B | $31.9B | 57.2% |
| Sep 30, 2023 | $76.7B | $43.5B | $33.2B | 56.7% |
| Dec 31, 2023 | $86.3B | $48.7B | $37.6B | 56.5% |
| Mar 31, 2024 | $80.5B | $46.8B | $33.7B | 58.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2023
+1.7 pts
Year-over-year change
Mar 31, 2023
+2.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the decline in cost of revenue as a share of revenue in the sequential comparison, which lifted gross margin. The year-over-year improvement in gross margin also reflects a favorable relationship between revenue growth and cost of revenue growth.
Compared to the immediately preceding quarter, gross margin improved and cost of revenue declined more sharply than revenue. Relative to the same quarter one year earlier, both revenue and gross profit were higher, and gross margin also strengthened.
Monitor the trajectory of cost of revenue relative to revenue, as its movement was the key factor in the gross margin change this quarter.