KLA Corporation stock research
FY2023 Q3
KLA (KLAC) Gross Margin — Quarter Ended Mar 31, 2023
Revenue and gross profit both decreased compared to the prior quarter, while cost of revenue declined at a slightly slower pace, resulting in a lower gross margin. Versus the same quarter one year earlier, revenue was higher and gross profit was stable, but cost of revenue increased more than proportionally, leading to a weakened gross margin.
Gross margin takeaway
Quarter ended Mar 31, 2023 · FY2023 Q3
Revenue and gross profit both decreased compared to the prior quarter, while cost of revenue declined at a slightly slower pace, resulting in a lower gross margin. Versus the same quarter one year earlier, revenue was higher and gross profit was stable, but cost of revenue increased more than proportionally, leading to a weakened gross margin.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue declined from the prior quarter while cost of revenue fell less, compressing gross margin. Compared to a year ago, revenue grew but cost of revenue grew faster, also pressuring margin.
- Sequentially, gross margin weakened as revenue and gross profit both fell, with cost of revenue declining at a slower rate. Year-over-year, gross margin also weakened because revenue increased but cost of revenue rose more sharply, leaving gross profit essentially unchanged.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
58.7%
Gross profit
$1.4B
Revenue
$2.4B
Cost of revenue
$1.0B
Quarter-over-quarter change
n/a
Year-over-year change
-2.3 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, 2023 | $2.4B | $1.4B | $1.0B | 58.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Previous quarter unavailable
n/a
Year-over-year change
Mar 31, 2022
-2.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue declined from the prior quarter while cost of revenue fell less, compressing gross margin. Compared to a year ago, revenue grew but cost of revenue grew faster, also pressuring margin.
Sequentially, gross margin weakened as revenue and gross profit both fell, with cost of revenue declining at a slower rate. Year-over-year, gross margin also weakened because revenue increased but cost of revenue rose more sharply, leaving gross profit essentially unchanged.
Monitor the trend in cost of revenue relative to revenue, as its slower decline sequentially and faster growth year-over-year directly affected gross margin.