Synopsys, Inc. stock research
FY2023 Q3
Synopsys (SNPS) Gross Margin — Quarter Ended Jul 31, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue was lower than a year ago but slightly higher than the prior quarter. Gross margin improved sequentially and year-over-year, reflecting a larger proportion of revenue flowing through to gross profit.
Gross margin takeaway
Quarter ended Jul 31, 2023 · FY2023 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue was lower than a year ago but slightly higher than the prior quarter. Gross margin improved sequentially and year-over-year, reflecting a larger proportion of revenue flowing through to gross profit.
- The strongest observable margin driver is the relationship between revenue growth and cost of revenue: revenue increased more than cost of revenue compared to both the prior quarter and the year-ago quarter, leading to an expanded gross margin.
- Compared to the immediately preceding quarter, gross margin was higher. Compared to the same quarter one year earlier, gross margin was also higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.8%
Gross profit
$1.1B
Revenue
$1.4B
Cost of revenue
$260.4M
Quarter-over-quarter change
+0.4 pts
Year-over-year change
+2.5 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 |
|---|---|---|---|---|
| Jan 31, 2023 | $1.4B | $1.1B | $284.4M | 79.1% |
| Apr 30, 2023 | $1.3B | $1.0B | $248.2M | 80.3% |
| Jul 31, 2023 | $1.4B | $1.1B | $260.4M | 80.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Apr 30, 2023
+0.4 pts
Year-over-year change
Jul 31, 2022
+2.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue growth and cost of revenue: revenue increased more than cost of revenue compared to both the prior quarter and the year-ago quarter, leading to an expanded gross margin.
Compared to the immediately preceding quarter, gross margin was higher. Compared to the same quarter one year earlier, gross margin was also higher.
Monitor the trend in cost of revenue relative to revenue, as cost of revenue increased sequentially while revenue also grew.