PPG Industries, Inc. stock research
FY2024 Q2
PPG Industries (PPG) Gross Margin — Quarter Ended Jun 30, 2024
In the current quarter, revenue and gross profit increased from the previous quarter, but cost of revenue also increased, resulting in a slightly weaker gross margin. Compared to the prior year's first quarter, revenue and gross profit were lower, yet gross margin improved as cost of revenue decreased proportionally more.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
In the current quarter, revenue and gross profit increased from the previous quarter, but cost of revenue also increased, resulting in a slightly weaker gross margin. Compared to the prior year's first quarter, revenue and gross profit were lower, yet gross margin improved as cost of revenue decreased proportionally more.
- The strongest observable margin driver is the change in the relationship between revenue and cost of revenue. The sequential gross margin decline coincided with cost of revenue increasing faster than revenue.
- Compared to the prior quarter, revenue and gross profit were higher, but gross margin was lower due to a proportionally larger increase in cost of revenue. Compared to the prior year's first quarter, revenue and gross profit were lower, but gross margin was higher, as cost of revenue declined more sharply than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
42.1%
Gross profit
$1.8B
Revenue
$4.2B
Cost of revenue
$2.5B
Quarter-over-quarter change
-0.6 pts
Year-over-year change
+1.0 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 | $4.6B | $1.9B | $2.8B | 40.7% |
| Dec 31, 2023 | $2.3B | $882.0M | $1.5B | 37.6% |
| Mar 31, 2024 | $3.8B | $1.6B | $2.2B | 42.7% |
| Jun 30, 2024 | $4.2B | $1.8B | $2.5B | 42.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-0.6 pts
Year-over-year change
Jun 30, 2023
+1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the change in the relationship between revenue and cost of revenue. The sequential gross margin decline coincided with cost of revenue increasing faster than revenue.
Compared to the prior quarter, revenue and gross profit were higher, but gross margin was lower due to a proportionally larger increase in cost of revenue. Compared to the prior year's first quarter, revenue and gross profit were lower, but gross margin was higher, as cost of revenue declined more sharply than revenue.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters.