Moody's Corporation stock research
FY2023 Q4
Moody's (MCO) Gross Margin — Quarter Ended Dec 31, 2023
In the current quarter, revenue and gross profit were both higher than cost of revenue, yielding a strong gross margin. Compared to the prior quarter, revenue was stable while cost of revenue was slightly higher, causing a marginal weakening in gross margin; versus the same quarter a year earlier, revenue and gross profit were higher and cost of revenue was only modestly higher, resulting in an improved gross margin.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
In the current quarter, revenue and gross profit were both higher than cost of revenue, yielding a strong gross margin. Compared to the prior quarter, revenue was stable while cost of revenue was slightly higher, causing a marginal weakening in gross margin; versus the same quarter a year earlier, revenue and gross profit were higher and cost of revenue was only modestly higher, resulting in an improved gross margin.
- The year-over-year expansion in gross margin was driven by revenue increasing at a faster rate than cost of revenue, as revenue rose while cost of revenue rose only modestly.
- Sequentially, gross margin weakened slightly as cost of revenue increased on stable revenue. Year over year, gross margin improved substantially, with revenue growth outpacing cost growth.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
71.6%
Gross profit
$1.1B
Revenue
$1.5B
Cost of revenue
$421.0M
Quarter-over-quarter change
-0.5 pts
Year-over-year change
+3.3 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 | $1.5B | $1.0B | $428.0M | 70.9% |
| Jun 30, 2023 | $1.5B | $1.1B | $426.0M | 71.5% |
| Sep 30, 2023 | $1.5B | $1.1B | $412.0M | 72.0% |
| Dec 31, 2023 | $1.5B | $1.1B | $421.0M | 71.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
-0.5 pts
Year-over-year change
Dec 31, 2022
+3.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The year-over-year expansion in gross margin was driven by revenue increasing at a faster rate than cost of revenue, as revenue rose while cost of revenue rose only modestly.
Sequentially, gross margin weakened slightly as cost of revenue increased on stable revenue. Year over year, gross margin improved substantially, with revenue growth outpacing cost growth.
Monitor cost of revenue trends, as the sequential increase on flat revenue contributed to a slight margin compression.