Omnicom Group Inc. stock research
FY2023 Q4
Omnicom Group (OMC) Gross Margin — Quarter Ended Dec 31, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin improved slightly from the prior quarter but was marginally lower than the year-ago period.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin improved slightly from the prior quarter but was marginally lower than the year-ago period.
- The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth; revenue increased more than cost of revenue compared to the prior quarter, leading to a higher gross margin.
- Compared to the immediately preceding quarter, gross margin improved as revenue grew faster than cost of revenue. Versus the same quarter one year earlier, gross margin weakened slightly, with revenue and cost of revenue both higher but cost of revenue rising at a marginally faster pace.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
20.1%
Gross profit
$816.0M
Revenue
$4.1B
Cost of revenue
$3.2B
Quarter-over-quarter change
+0.4 pts
Year-over-year change
-0.1 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% |
| Dec 31, 2023 | $4.1B | $816.0M | $3.2B | 20.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+0.4 pts
Year-over-year change
Dec 31, 2022
-0.1 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 more than cost of revenue compared to the prior quarter, leading to a higher gross margin.
Compared to the immediately preceding quarter, gross margin improved as revenue grew faster than cost of revenue. Versus the same quarter one year earlier, gross margin weakened slightly, with revenue and cost of revenue both higher but cost of revenue rising at a marginally faster pace.
Monitor the trend in cost of revenue relative to revenue, as a sustained faster increase in cost of revenue could pressure gross margin.