ON Semiconductor Corporation stock research
FY2023 Q4
ON Semiconductor (ON) Gross Margin — Quarter Ended Dec 31, 2023
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year, while cost of revenue also declined. Gross margin weakened sequentially and year-over-year, reflecting a lower proportion of revenue retained as gross profit.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year, while cost of revenue also declined. Gross margin weakened sequentially and year-over-year, reflecting a lower proportion of revenue retained as gross profit.
- The decline in gross margin was driven by gross profit falling faster than revenue relative to both comparison periods. Cost of revenue decreased at a slower pace than revenue, compressing the margin.
- Compared to the immediately preceding quarter, revenue and gross profit were lower, and gross margin weakened. Versus the same quarter one year earlier, revenue and gross profit were also lower, with gross margin further weakened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
46.7%
Gross profit
$941.9M
Revenue
$2.0B
Cost of revenue
$1.1B
Quarter-over-quarter change
-0.6 pts
Year-over-year change
-1.8 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% |
| Sep 29, 2023 | $2.2B | $1.0B | $1.2B | 47.3% |
| Dec 31, 2023 | $2.0B | $941.9M | $1.1B | 46.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 29, 2023
-0.6 pts
Year-over-year change
Dec 31, 2022
-1.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The decline in gross margin was driven by gross profit falling faster than revenue relative to both comparison periods. Cost of revenue decreased at a slower pace than revenue, compressing the margin.
Compared to the immediately preceding quarter, revenue and gross profit were lower, and gross margin weakened. Versus the same quarter one year earlier, revenue and gross profit were also lower, with gross margin further weakened.
Monitor the trajectory of cost of revenue relative to revenue, as its slower decline has been a key factor in margin compression.