Synopsys, Inc. stock research
FY2023 Q4
Synopsys (SNPS) Gross Margin — Quarter Ended Oct 31, 2023
Revenue and gross profit both increased compared to the prior quarter, while cost of revenue also rose. Gross margin weakened slightly from the prior quarter and was lower than the same quarter one year earlier.
Gross margin takeaway
Quarter ended Oct 31, 2023 · FY2023 Q4
Revenue and gross profit both increased compared to the prior quarter, while cost of revenue also rose. Gross margin weakened slightly from the prior quarter and was lower than the same quarter one year earlier.
- The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth; revenue increased more than cost of revenue in absolute terms, supporting gross profit expansion despite a slight margin decline.
- Compared to the immediately preceding quarter, gross margin was slightly lower. Compared to the same quarter one year earlier, gross margin was lower, as cost of revenue grew at a faster pace relative to revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.5%
Gross profit
$1.2B
Revenue
$1.5B
Cost of revenue
$286.2M
Quarter-over-quarter change
-0.3 pts
Year-over-year change
-5.2 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% |
| Oct 31, 2023 | $1.5B | $1.2B | $286.2M | 80.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 31, 2023
-0.3 pts
Year-over-year change
Oct 31, 2022
-5.2 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 growth; revenue increased more than cost of revenue in absolute terms, supporting gross profit expansion despite a slight margin decline.
Compared to the immediately preceding quarter, gross margin was slightly lower. Compared to the same quarter one year earlier, gross margin was lower, as cost of revenue grew at a faster pace relative to revenue.
Monitor the trend in cost of revenue relative to revenue, as its growth rate has outpaced revenue on a year-over-year basis.