Illinois Tool Works Inc. stock research
FY2024 Q2
Illinois Tool Works (ITW) Gross Margin — Quarter Ended Jun 30, 2024
Revenue remained roughly stable compared to the prior quarter, while gross profit and cost of revenue were essentially unchanged, resulting in a modest improvement in gross margin. Compared with the same quarter one year earlier, revenue was slightly lower, but a substantial reduction in cost of revenue drove a higher gross profit and a notably improved margin.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue remained roughly stable compared to the prior quarter, while gross profit and cost of revenue were essentially unchanged, resulting in a modest improvement in gross margin. Compared with the same quarter one year earlier, revenue was slightly lower, but a substantial reduction in cost of revenue drove a higher gross profit and a notably improved margin.
- The strongest observable driver is the year-over-year improvement in gross margin, which rose sharply as cost of revenue declined while revenue held relatively firm. This margin expansion was the dominant factor affecting profitability.
- Compared to the immediately preceding quarter, revenue was flat, and gross profit and cost of revenue were nearly unchanged, leading to a slight uptick in gross margin. Year-over-year, revenue decreased modestly, but cost of revenue fell more sharply, resulting in a much higher gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
52.3%
Gross profit
$2.1B
Revenue
$4.0B
Cost of revenue
$1.9B
Quarter-over-quarter change
+0.6 pts
Year-over-year change
+9.9 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 |
|---|---|---|---|---|
| Sep 30, 2023 | $4.0B | $1.7B | $2.3B | 42.5% |
| Dec 31, 2023 | $4.0B | $3.0B | $940.0M | 76.4% |
| Mar 31, 2024 | $4.0B | $2.1B | $1.9B | 51.7% |
| Jun 30, 2024 | $4.0B | $2.1B | $1.9B | 52.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
+0.6 pts
Year-over-year change
Jun 30, 2023
+9.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the year-over-year improvement in gross margin, which rose sharply as cost of revenue declined while revenue held relatively firm. This margin expansion was the dominant factor affecting profitability.
Compared to the immediately preceding quarter, revenue was flat, and gross profit and cost of revenue were nearly unchanged, leading to a slight uptick in gross margin. Year-over-year, revenue decreased modestly, but cost of revenue fell more sharply, resulting in a much higher gross margin.
Monitor whether the year-over-year reduction in cost of revenue persists or reverses in future quarters, as it was the primary factor behind the significant margin improvement.