HP Inc. stock research
FY2023 Q2
HP (HPQ) Gross Margin — Quarter Ended Apr 30, 2023
Gross margin improved sequentially as gross profit rose slightly on lower revenue, with cost of revenue declining proportionally more. Compared to the same quarter last year, gross profit was lower on significantly lower revenue, while gross margin was higher.
Gross margin takeaway
Quarter ended Apr 30, 2023 · FY2023 Q2
Gross margin improved sequentially as gross profit rose slightly on lower revenue, with cost of revenue declining proportionally more. Compared to the same quarter last year, gross profit was lower on significantly lower revenue, while gross margin was higher.
- The strongest observable margin driver is the relationship between cost of revenue and revenue. Sequentially, cost of revenue fell at a faster rate than revenue, which allowed gross profit to improve slightly despite a top-line decline.
- Compared to the prior quarter, revenue was lower but gross profit was slightly higher, leading to an improved gross margin. Versus the year-ago quarter, both revenue and gross profit were lower, but gross margin was higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
22.6%
Gross profit
$2.9B
Revenue
$12.9B
Cost of revenue
$10.0B
Quarter-over-quarter change
+2.4 pts
Year-over-year change
+2.6 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 |
|---|---|---|---|---|
| Jan 31, 2023 | $13.8B | $2.8B | $11.0B | 20.2% |
| Apr 30, 2023 | $12.9B | $2.9B | $10.0B | 22.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jan 31, 2023
+2.4 pts
Year-over-year change
Apr 30, 2022
+2.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between cost of revenue and revenue. Sequentially, cost of revenue fell at a faster rate than revenue, which allowed gross profit to improve slightly despite a top-line decline.
Compared to the prior quarter, revenue was lower but gross profit was slightly higher, leading to an improved gross margin. Versus the year-ago quarter, both revenue and gross profit were lower, but gross margin was higher.
Monitor whether the sequential trend of cost of revenue declining faster than revenue can be sustained in future periods.