Illinois Tool Works Inc. stock research
FY2024 Q4
Illinois Tool Works (ITW) Gross Margin — Quarter Ended Dec 31, 2024
Current quarter revenue and gross profit are slightly lower than the preceding quarter, while cost of revenue is similar, resulting in a modestly weaker gross margin. Compared to the same quarter one year earlier, revenue is slightly lower, but cost of revenue is markedly higher, leading to significantly lower gross profit and a much weaker gross margin.
Gross margin takeaway
Quarter ended Dec 31, 2024 · FY2024 Q4
Current quarter revenue and gross profit are slightly lower than the preceding quarter, while cost of revenue is similar, resulting in a modestly weaker gross margin. Compared to the same quarter one year earlier, revenue is slightly lower, but cost of revenue is markedly higher, leading to significantly lower gross profit and a much weaker gross margin.
- The strongest observable margin driver is the change in cost relative to revenue. Cost of revenue increased while revenue declined slightly, compressing gross profit and margin.
- Compared to the preceding quarter, gross margin weakened modestly as revenue and gross profit edged lower while cost remained stable. Compared to the same quarter one year earlier, gross margin weakened substantially as cost rose sharply while revenue declined slightly.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
52.1%
Gross profit
$2.0B
Revenue
$3.9B
Cost of revenue
$1.9B
Quarter-over-quarter change
-0.4 pts
Year-over-year change
-24.3 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 |
|---|---|---|---|---|
| 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% |
| Dec 31, 2024 | $3.9B | $2.0B | $1.9B | 52.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2024
-0.4 pts
Year-over-year change
Dec 31, 2023
-24.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the change in cost relative to revenue. Cost of revenue increased while revenue declined slightly, compressing gross profit and margin.
Compared to the preceding quarter, gross margin weakened modestly as revenue and gross profit edged lower while cost remained stable. Compared to the same quarter one year earlier, gross margin weakened substantially as cost rose sharply while revenue declined slightly.
Monitor the trajectory of cost of revenue, which has become a larger proportion of revenue and is the primary factor behind the margin compression.