Omnicom Group Inc. stock research
FY2024 Q1
Omnicom Group (OMC) Gross Margin — Quarter Ended Mar 31, 2024
Revenue was lower than the previous quarter but higher than the same quarter last year. Gross profit followed a similar pattern, while cost of revenue was lower than the previous quarter and stable compared to the year-ago quarter. Consequently, gross margin weakened from the prior quarter but improved from the year-ago period.
Gross margin takeaway
Quarter ended Mar 31, 2024 · FY2024 Q1
Revenue was lower than the previous quarter but higher than the same quarter last year. Gross profit followed a similar pattern, while cost of revenue was lower than the previous quarter and stable compared to the year-ago quarter. Consequently, gross margin weakened from the prior quarter but improved from the year-ago period.
- The strongest observable driver is the relative movement of cost of revenue. Compared to the year-ago quarter, cost of revenue remained stable while revenue increased, supporting margin improvement. Sequentially, cost of revenue declined less than revenue, pressuring margin.
- Compared to the prior quarter, revenue and gross profit were lower, and gross margin weakened. Compared to the same quarter last year, revenue and gross profit were higher, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
17.2%
Gross profit
$623.8M
Revenue
$3.6B
Cost of revenue
$3.0B
Quarter-over-quarter change
-2.9 pts
Year-over-year change
+3.0 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 |
|---|---|---|---|---|
| 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% |
| Mar 31, 2024 | $3.6B | $623.8M | $3.0B | 17.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2023
-2.9 pts
Year-over-year change
Mar 31, 2023
+3.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the relative movement of cost of revenue. Compared to the year-ago quarter, cost of revenue remained stable while revenue increased, supporting margin improvement. Sequentially, cost of revenue declined less than revenue, pressuring margin.
Compared to the prior quarter, revenue and gross profit were lower, and gross margin weakened. Compared to the same quarter last year, revenue and gross profit were higher, and gross margin improved.
Monitor the level of work in process, which increased from the prior quarter-end, as it may influence future cost of revenue.