Illinois Tool Works Inc. stock research
FY2024 Q3
Illinois Tool Works (ITW) Gross Margin — Quarter Ended Sep 30, 2024
Revenue was stable compared with both the prior quarter and the same quarter one year earlier. Gross profit improved from the year-ago quarter while cost of revenue declined, leading to a higher gross margin; versus the prior quarter, gross profit and cost of revenue were essentially unchanged, and gross margin was slightly higher.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2024 Q3
Revenue was stable compared with both the prior quarter and the same quarter one year earlier. Gross profit improved from the year-ago quarter while cost of revenue declined, leading to a higher gross margin; versus the prior quarter, gross profit and cost of revenue were essentially unchanged, and gross margin was slightly higher.
- The clearest observable driver of the gross margin increase from the year-ago quarter is the reduction in cost of revenue alongside stable revenue. Relative to the preceding quarter, both revenue and cost of revenue were flat, resulting in a largely steady margin.
- Compared with the immediately preceding quarter, gross margin was stable at a slightly higher level. Compared with the same quarter one year earlier, gross margin improved materially, supported by a lower cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
52.5%
Gross profit
$2.1B
Revenue
$4.0B
Cost of revenue
$1.9B
Quarter-over-quarter change
+0.1 pts
Year-over-year change
+10.0 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 |
|---|---|---|---|---|
| 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% |
| Sep 30, 2024 | $4.0B | $2.1B | $1.9B | 52.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
+0.1 pts
Year-over-year change
Sep 30, 2023
+10.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The clearest observable driver of the gross margin increase from the year-ago quarter is the reduction in cost of revenue alongside stable revenue. Relative to the preceding quarter, both revenue and cost of revenue were flat, resulting in a largely steady margin.
Compared with the immediately preceding quarter, gross margin was stable at a slightly higher level. Compared with the same quarter one year earlier, gross margin improved materially, supported by a lower cost of revenue.
Monitor whether the cost of revenue remains at its current level relative to revenue, as this ratio is the primary factor behind the margin improvement.