HP Inc. stock research
FY2023 Q4
HP (HPQ) Gross Margin — Quarter Ended Oct 31, 2023
Revenue and cost of revenue both increased compared to the prior quarter, while gross profit rose at a slightly faster pace, resulting in a marginal improvement in gross margin. Compared to the same quarter last year, revenue declined but gross profit increased, as cost of revenue fell more sharply, leading to a higher gross margin.
Gross margin takeaway
Quarter ended Oct 31, 2023 · FY2023 Q4
Revenue and cost of revenue both increased compared to the prior quarter, while gross profit rose at a slightly faster pace, resulting in a marginal improvement in gross margin. Compared to the same quarter last year, revenue declined but gross profit increased, as cost of revenue fell more sharply, leading to a higher gross margin.
- The strongest observable driver of gross margin improvement is the relationship between cost of revenue and revenue: cost of revenue decreased year over year while revenue also decreased, but the cost decline was proportionally larger, expanding gross margin.
- Gross margin was slightly higher than the prior quarter and notably higher than the same quarter one year earlier. Revenue was higher than the prior quarter but lower than the year-ago quarter.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
21.6%
Gross profit
$3.0B
Revenue
$13.8B
Cost of revenue
$10.8B
Quarter-over-quarter change
+0.2 pts
Year-over-year change
+3.4 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% |
| Jul 31, 2023 | $13.2B | $2.8B | $10.4B | 21.4% |
| Oct 31, 2023 | $13.8B | $3.0B | $10.8B | 21.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 31, 2023
+0.2 pts
Year-over-year change
Oct 31, 2022
+3.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of gross margin improvement is the relationship between cost of revenue and revenue: cost of revenue decreased year over year while revenue also decreased, but the cost decline was proportionally larger, expanding gross margin.
Gross margin was slightly higher than the prior quarter and notably higher than the same quarter one year earlier. Revenue was higher than the prior quarter but lower than the year-ago quarter.
Monitor the trajectory of cost of revenue relative to revenue, as its proportionally larger decline drove the year-over-year margin expansion.