Oracle Corporation stock research
FY2024 Q4
Oracle (ORCL) Gross Margin — Quarter Ended May 31, 2024
Revenue increased compared to the prior quarter, while cost of revenue remained stable, resulting in a higher gross profit and an improved gross margin. Compared to the same quarter one year earlier, revenue grew but cost of revenue rose at a faster pace, leading to a slightly lower gross margin.
Gross margin takeaway
Quarter ended May 31, 2024 · FY2024 Q4
Revenue increased compared to the prior quarter, while cost of revenue remained stable, resulting in a higher gross profit and an improved gross margin. Compared to the same quarter one year earlier, revenue grew but cost of revenue rose at a faster pace, leading to a slightly lower gross margin.
- The most notable margin driver is the sequential stability in cost of revenue, which allowed the revenue increase to flow directly to gross profit and margin expansion. A concrete item to monitor is the trend in cost of revenue relative to revenue.
- Quarter-over-quarter, gross margin improved as revenue grew while cost of revenue held steady. Year-over-year, gross margin weakened slightly as revenue increased but cost of revenue rose more rapidly.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
72.5%
Gross profit
$10.4B
Revenue
$14.3B
Cost of revenue
$3.9B
Quarter-over-quarter change
+1.7 pts
Year-over-year change
-0.5 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 |
|---|---|---|---|---|
| Aug 31, 2023 | $12.5B | $8.8B | $3.6B | 71.0% |
| Nov 30, 2023 | $12.9B | $9.2B | $3.7B | 71.1% |
| Feb 29, 2024 | $13.3B | $9.4B | $3.9B | 70.9% |
| May 31, 2024 | $14.3B | $10.4B | $3.9B | 72.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Feb 29, 2024
+1.7 pts
Year-over-year change
May 31, 2023
-0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most notable margin driver is the sequential stability in cost of revenue, which allowed the revenue increase to flow directly to gross profit and margin expansion. A concrete item to monitor is the trend in cost of revenue relative to revenue.
Quarter-over-quarter, gross margin improved as revenue grew while cost of revenue held steady. Year-over-year, gross margin weakened slightly as revenue increased but cost of revenue rose more rapidly.
Monitor whether cost of revenue can remain stable or grow slower than revenue in upcoming quarters, as this will be key to sustaining or improving gross margin.