Omnicom Group Inc. stock research
FY2024 Q2
Omnicom Group (OMC) Gross Margin — Quarter Ended Jun 30, 2024
Revenue and cost of revenue both increased from the prior quarter, while gross profit rose at a slightly higher rate than cost of revenue, yielding a modest improvement in gross margin. Compared with the same quarter a year earlier, revenue was higher but gross profit was lower, and cost of revenue increased proportionally more, resulting in a weaker gross margin.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue and cost of revenue both increased from the prior quarter, while gross profit rose at a slightly higher rate than cost of revenue, yielding a modest improvement in gross margin. Compared with the same quarter a year earlier, revenue was higher but gross profit was lower, and cost of revenue increased proportionally more, resulting in a weaker gross margin.
- The change in gross margin was primarily influenced by the relationship between revenue growth and cost of revenue growth; between the prior quarter and the current quarter, cost of revenue grew slower than revenue, which supported margin expansion.
- Gross margin improved compared with the immediately preceding quarter but weakened compared with the same quarter one year earlier. The sequential improvement was driven by a more favorable balance between revenue and cost of revenue, while the year-over-year decline reflected a larger increase in cost of revenue relative to revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
17.7%
Gross profit
$681.7M
Revenue
$3.9B
Cost of revenue
$3.2B
Quarter-over-quarter change
+0.5 pts
Year-over-year change
-1.7 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 |
|---|---|---|---|---|
| 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% |
| Jun 30, 2024 | $3.9B | $681.7M | $3.2B | 17.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
+0.5 pts
Year-over-year change
Jun 30, 2023
-1.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The change in gross margin was primarily influenced by the relationship between revenue growth and cost of revenue growth; between the prior quarter and the current quarter, cost of revenue grew slower than revenue, which supported margin expansion.
Gross margin improved compared with the immediately preceding quarter but weakened compared with the same quarter one year earlier. The sequential improvement was driven by a more favorable balance between revenue and cost of revenue, while the year-over-year decline reflected a larger increase in cost of revenue relative to revenue.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters to assess whether the margin improvement can be sustained.