Microsoft Corporation stock research
FY2023 Q4
Microsoft (MSFT) Gross Margin — Quarter Ended Jun 30, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue rose less sharply. Gross margin improved sequentially and year-over-year, reflecting a larger share of revenue flowing through to gross profit.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q4
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue rose less sharply. Gross margin improved sequentially and year-over-year, reflecting a larger share of revenue flowing through to gross profit.
- The strongest observable margin driver is the gross margin itself, which reached a higher level than both the preceding quarter and the year-ago quarter. This indicates that the relationship among revenue, cost of revenue, and gross profit has become more favorable.
- Compared to the immediately preceding quarter, revenue and gross profit were higher, cost of revenue was higher, and gross margin improved. Compared to the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
70.1%
Gross profit
$39.4B
Revenue
$56.2B
Cost of revenue
$16.8B
Quarter-over-quarter change
+0.6 pts
Year-over-year change
n/a
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, 2022 | $50.1B | $34.7B | $15.5B | 69.2% |
| Dec 31, 2022 | $52.7B | $35.3B | $17.5B | 66.8% |
| Mar 31, 2023 | $52.9B | $36.7B | $16.1B | 69.5% |
| Jun 30, 2023 | $56.2B | $39.4B | $16.8B | 70.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+0.6 pts
Year-over-year change
Year-ago quarter unavailable
n/a
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the gross margin itself, which reached a higher level than both the preceding quarter and the year-ago quarter. This indicates that the relationship among revenue, cost of revenue, and gross profit has become more favorable.
Compared to the immediately preceding quarter, revenue and gross profit were higher, cost of revenue was higher, and gross margin improved. Compared to the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved.
Monitor whether cost of revenue continues to grow at a slower pace than revenue, as this pattern has supported gross margin expansion.