O'Reilly Automotive, Inc. stock research
FY2023 Q3
O'Reilly Automotive (ORLY) Gross Margin — Quarter Ended Sep 30, 2023
Revenue increased compared to the prior quarter and the same quarter a year earlier, while cost of revenue remained unchanged from the prior quarter and was higher than the year-ago period. The result was higher gross profit and an improved gross margin relative to both comparison periods.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue increased compared to the prior quarter and the same quarter a year earlier, while cost of revenue remained unchanged from the prior quarter and was higher than the year-ago period. The result was higher gross profit and an improved gross margin relative to both comparison periods.
- The strongest observable driver of the margin improvement is the relationship between revenue growth and stable cost of revenue. Revenue rose while cost of revenue did not change from the prior quarter, and the increase in revenue outpaced the increase in cost of revenue year over year.
- Compared to the immediately preceding quarter, gross margin ticked higher as revenue grew while cost of revenue stayed flat. Year over year, gross margin also improved, with revenue increasing more than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
51.4%
Gross profit
$2.2B
Revenue
$4.2B
Cost of revenue
$2.0B
Quarter-over-quarter change
+0.1 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 |
|---|---|---|---|---|
| Mar 31, 2023 | $3.7B | $1.9B | $1.8B | 51.0% |
| Jun 30, 2023 | $4.1B | $2.1B | $2.0B | 51.3% |
| Sep 30, 2023 | $4.2B | $2.2B | $2.0B | 51.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
+0.1 pts
Year-over-year change
Sep 30, 2022
+0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of the margin improvement is the relationship between revenue growth and stable cost of revenue. Revenue rose while cost of revenue did not change from the prior quarter, and the increase in revenue outpaced the increase in cost of revenue year over year.
Compared to the immediately preceding quarter, gross margin ticked higher as revenue grew while cost of revenue stayed flat. Year over year, gross margin also improved, with revenue increasing more than cost of revenue.
Monitor whether cost of revenue can remain stable as revenue continues to grow, as this has been a key factor in margin expansion.