Merck & Co., Inc. stock research
FY2023 Q3
Merck & (MRK) Gross Margin — Quarter Ended Sep 30, 2023
Revenue and gross profit both increased compared with the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin was slightly higher than the prior quarter but slightly lower than the same quarter last year, indicating a mixed trend.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue and gross profit both increased compared with the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin was slightly higher than the prior quarter but slightly lower than the same quarter last year, indicating a mixed trend.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue grew faster than cost of revenue compared with the prior quarter, supporting a slight gross margin improvement.
- Compared with the prior quarter, gross margin improved slightly as revenue growth outpaced cost growth. Compared with the same quarter last year, gross margin weakened modestly as cost of revenue increased at a faster rate relative to revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
73.3%
Gross profit
$11.7B
Revenue
$16.0B
Cost of revenue
$4.3B
Quarter-over-quarter change
+0.1 pts
Year-over-year change
-0.4 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 | $14.5B | $10.6B | $3.9B | 72.9% |
| Jun 30, 2023 | $15.0B | $11.0B | $4.0B | 73.2% |
| Sep 30, 2023 | $16.0B | $11.7B | $4.3B | 73.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
+0.1 pts
Year-over-year change
Sep 30, 2022
-0.4 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 grew faster than cost of revenue compared with the prior quarter, supporting a slight gross margin improvement.
Compared with the prior quarter, gross margin improved slightly as revenue growth outpaced cost growth. Compared with the same quarter last year, gross margin weakened modestly as cost of revenue increased at a faster rate relative to revenue.
Monitor the trajectory of cost of revenue relative to revenue, as its growth rate has shifted compared with both the prior and year-ago quarters.