McKesson Corporation stock research
FY2025 Q1
McKesson (MCK) Gross Margin — Quarter Ended Jun 30, 2024
Revenue rose compared to both the prior quarter and the same quarter last year, while gross profit declined from the prior quarter but increased from a year ago. Cost of revenue grew faster than revenue in both comparisons, causing gross margin to weaken.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2025 Q1
Revenue rose compared to both the prior quarter and the same quarter last year, while gross profit declined from the prior quarter but increased from a year ago. Cost of revenue grew faster than revenue in both comparisons, causing gross margin to weaken.
- The most observable driver of gross margin change is the relative growth of cost of revenue versus revenue. Cost of revenue increased at a higher rate than revenue in both the sequential and year-over-year comparisons, compressing the margin.
- Gross margin weakened sequentially from the prior quarter and was slightly lower than the same quarter one year earlier. Revenue was higher in both periods, but cost of revenue rose more sharply.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
4.0%
Gross profit
$3.2B
Revenue
$79.3B
Cost of revenue
$76.1B
Quarter-over-quarter change
-0.7 pts
Year-over-year change
-0.1 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 | $77.2B | $3.1B | $74.1B | 4.0% |
| Dec 31, 2023 | $80.9B | $3.2B | $77.7B | 3.9% |
| Mar 31, 2024 | $76.4B | $3.6B | $72.8B | 4.7% |
| Jun 30, 2024 | $79.3B | $3.2B | $76.1B | 4.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-0.7 pts
Year-over-year change
Jun 30, 2023
-0.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of gross margin change is the relative growth of cost of revenue versus revenue. Cost of revenue increased at a higher rate than revenue in both the sequential and year-over-year comparisons, compressing the margin.
Gross margin weakened sequentially from the prior quarter and was slightly lower than the same quarter one year earlier. Revenue was higher in both periods, but cost of revenue rose more sharply.
Monitor the trend of cost of revenue relative to revenue, as its faster growth has been the primary factor behind margin compression.