Omnicom Group Inc. stock research
FY2023 Q2
Omnicom Group (OMC) Gross Margin — Quarter Ended Jun 30, 2023
Revenue was stable compared to the same quarter one year earlier, while gross profit and gross margin both weakened. Sequentially, revenue increased, cost of revenue decreased, and gross profit improved substantially, leading to a higher gross margin.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue was stable compared to the same quarter one year earlier, while gross profit and gross margin both weakened. Sequentially, revenue increased, cost of revenue decreased, and gross profit improved substantially, leading to a higher gross margin.
- The strongest observable margin driver was the reduction in cost of revenue relative to revenue, which allowed gross profit to grow faster than revenue on a sequential basis.
- Compared to the immediately preceding quarter, gross margin improved as revenue grew and cost of revenue declined. Compared to the same quarter one year earlier, gross margin weakened slightly, with revenue unchanged and gross profit lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
19.4%
Gross profit
$700.9M
Revenue
$3.6B
Cost of revenue
$2.9B
Quarter-over-quarter change
+5.2 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 | $3.4B | $489.6M | $3.0B | 14.2% |
| Jun 30, 2023 | $3.6B | $700.9M | $2.9B | 19.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+5.2 pts
Year-over-year change
Jun 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 was the reduction in cost of revenue relative to revenue, which allowed gross profit to grow faster than revenue on a sequential basis.
Compared to the immediately preceding quarter, gross margin improved as revenue grew and cost of revenue declined. Compared to the same quarter one year earlier, gross margin weakened slightly, with revenue unchanged and gross profit lower.
Monitor the trajectory of cost of revenue, as its sequential decline was the primary factor behind the gross margin improvement.