Omnicom Group Inc. stock research
FY2023 Q3
Omnicom Group (OMC) Gross Margin — Quarter Ended Sep 30, 2023
Revenue was stable compared to the prior quarter and higher than the same quarter last year. Gross profit and cost of revenue both increased relative to the year-ago period, while gross margin weakened slightly from a year ago but improved modestly from the preceding quarter.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue was stable compared to the prior quarter and higher than the same quarter last year. Gross profit and cost of revenue both increased relative to the year-ago period, while gross margin weakened slightly from a year ago but improved modestly from the preceding quarter.
- The strongest observable margin driver is the sequential improvement in gross margin, which rose from the prior quarter despite stable revenue, indicating that cost of revenue grew at a slower pace than gross profit. This suggests a favorable shift in the relationship between revenue and cost efficiency.
- Compared to the immediately preceding quarter, revenue was essentially unchanged, gross profit was slightly higher, and gross margin improved. Versus the same quarter one year earlier, revenue and gross profit were higher, but gross margin was lower, as cost of revenue increased at a faster rate than gross profit.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
19.6%
Gross profit
$703.0M
Revenue
$3.6B
Cost of revenue
$2.9B
Quarter-over-quarter change
+0.2 pts
Year-over-year change
-0.3 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 | $3.4B | $489.6M | $3.0B | 14.2% |
| Jun 30, 2023 | $3.6B | $700.9M | $2.9B | 19.4% |
| Sep 30, 2023 | $3.6B | $703.0M | $2.9B | 19.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
+0.2 pts
Year-over-year change
Sep 30, 2022
-0.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the sequential improvement in gross margin, which rose from the prior quarter despite stable revenue, indicating that cost of revenue grew at a slower pace than gross profit. This suggests a favorable shift in the relationship between revenue and cost efficiency.
Compared to the immediately preceding quarter, revenue was essentially unchanged, gross profit was slightly higher, and gross margin improved. Versus the same quarter one year earlier, revenue and gross profit were higher, but gross margin was lower, as cost of revenue increased at a faster rate than gross profit.
Monitor the trajectory of cost of revenue relative to revenue, as its faster growth year-over-year compressed gross margin despite higher absolute gross profit.