ON Semiconductor Corporation stock research
FY2023 Q2
ON Semiconductor (ON) Gross Margin — Quarter Ended Jun 30, 2023
Revenue was higher than the preceding quarter, and gross profit increased at a slightly faster pace than cost of revenue, resulting in an improved gross margin. Compared with the same quarter one year earlier, revenue was stable while gross profit decreased and cost of revenue increased, leading to a weakened gross margin.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue was higher than the preceding quarter, and gross profit increased at a slightly faster pace than cost of revenue, resulting in an improved gross margin. Compared with the same quarter one year earlier, revenue was stable while gross profit decreased and cost of revenue increased, leading to a weakened gross margin.
- Gross profit grew more than cost of revenue relative to the prior quarter, which was the strongest factor behind the sequential gross margin improvement. The relationship between cost of revenue and revenue compared with the year-ago quarter is the primary area to watch.
- Sequentially, gross margin improved as revenue and gross profit both rose while cost of revenue increased at a slower rate. Year over year, gross margin weakened because gross profit declined and cost of revenue rose even as revenue remained unchanged.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
47.4%
Gross profit
$993.4M
Revenue
$2.1B
Cost of revenue
$1.1B
Quarter-over-quarter change
+0.6 pts
Year-over-year change
-2.3 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 | $2.0B | $917.5M | $1.0B | 46.8% |
| Jun 30, 2023 | $2.1B | $993.4M | $1.1B | 47.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+0.6 pts
Year-over-year change
Jul 1, 2022
-2.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross profit grew more than cost of revenue relative to the prior quarter, which was the strongest factor behind the sequential gross margin improvement. The relationship between cost of revenue and revenue compared with the year-ago quarter is the primary area to watch.
Sequentially, gross margin improved as revenue and gross profit both rose while cost of revenue increased at a slower rate. Year over year, gross margin weakened because gross profit declined and cost of revenue rose even as revenue remained unchanged.
Monitor whether cost of revenue continues to grow relative to revenue, given the year-over-year weakening in gross margin.