McKesson Corporation stock research
FY2024 Q3
McKesson (MCK) Gross Margin — Quarter Ended Dec 31, 2023
Revenue increased compared to both the prior quarter and the same quarter last year, while gross profit remained relatively stable. Cost of revenue grew at a faster pace, causing gross margin to decline from both comparison periods.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2024 Q3
Revenue increased compared to both the prior quarter and the same quarter last year, while gross profit remained relatively stable. Cost of revenue grew at a faster pace, causing gross margin to decline from both comparison periods.
- The primary observable driver was the disproportionate increase in cost of revenue relative to revenue, which compressed gross margin.
- Compared to the prior quarter, gross margin weakened from a higher level, as revenue and cost of revenue both rose but cost grew more. Versus the year-ago quarter, gross margin also declined, with revenue substantially higher but gross profit essentially unchanged.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
3.9%
Gross profit
$3.2B
Revenue
$80.9B
Cost of revenue
$77.7B
Quarter-over-quarter change
-0.1 pts
Year-over-year change
-0.6 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 | $68.9B | $3.1B | $65.8B | 4.4% |
| Jun 30, 2023 | $74.5B | $3.0B | $71.5B | 4.1% |
| Sep 30, 2023 | $77.2B | $3.1B | $74.1B | 4.0% |
| Dec 31, 2023 | $80.9B | $3.2B | $77.7B | 3.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
-0.1 pts
Year-over-year change
Dec 31, 2022
-0.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary observable driver was the disproportionate increase in cost of revenue relative to revenue, which compressed gross margin.
Compared to the prior quarter, gross margin weakened from a higher level, as revenue and cost of revenue both rose but cost grew more. Versus the year-ago quarter, gross margin also declined, with revenue substantially higher but gross profit essentially unchanged.
Monitor the trend of cost of revenue growth relative to revenue growth in subsequent quarters.