Merck & Co., Inc. stock research
FY2024 Q3
Merck & (MRK) Gross Margin — Quarter Ended Sep 30, 2024
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin weakened slightly from the prior quarter but improved compared to the same quarter last year, as cost of revenue grew at a slower pace than revenue.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2024 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin weakened slightly from the prior quarter but improved compared to the same quarter last year, as cost of revenue grew at a slower pace than revenue.
- The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth. Revenue increased while cost of revenue decreased compared to the same quarter last year, leading to an improved gross margin.
- Compared to the prior quarter, gross margin was lower as cost of revenue increased at a faster rate than revenue. Compared to the same quarter last year, gross margin was higher as revenue grew while cost of revenue declined.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
75.5%
Gross profit
$12.6B
Revenue
$16.7B
Cost of revenue
$4.1B
Quarter-over-quarter change
-1.3 pts
Year-over-year change
+2.2 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 |
|---|---|---|---|---|
| Dec 31, 2023 | $14.6B | $10.7B | $3.9B | 73.3% |
| Mar 31, 2024 | $15.8B | $12.2B | $3.5B | 77.6% |
| Jun 30, 2024 | $16.1B | $12.4B | $3.7B | 76.8% |
| Sep 30, 2024 | $16.7B | $12.6B | $4.1B | 75.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
-1.3 pts
Year-over-year change
Sep 30, 2023
+2.2 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 growth and cost of revenue growth. Revenue increased while cost of revenue decreased compared to the same quarter last year, leading to an improved gross margin.
Compared to the prior quarter, gross margin was lower as cost of revenue increased at a faster rate than revenue. Compared to the same quarter last year, gross margin was higher as revenue grew while cost of revenue declined.
Monitor the trend in cost of revenue relative to revenue, as its movement has a direct impact on gross margin direction.