STERIS plc stock research
FY2025 Q1
STERIS (STE) Gross Margin — Quarter Ended Jun 30, 2024
Revenue and gross profit both decreased compared to the immediate prior quarter, while cost of revenue declined at a faster rate, leading to an improvement in gross margin. Compared to the same quarter one year ago, revenue and gross profit were higher, cost of revenue was also higher, and gross margin remained stable.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2025 Q1
Revenue and gross profit both decreased compared to the immediate prior quarter, while cost of revenue declined at a faster rate, leading to an improvement in gross margin. Compared to the same quarter one year ago, revenue and gross profit were higher, cost of revenue was also higher, and gross margin remained stable.
- The strongest observable margin driver was a lower proportion of cost of revenue relative to revenue in the current quarter compared to the prior quarter, resulting in a higher gross margin. This driver is supported by the faster decline in cost of revenue than revenue.
- Compared to the immediate prior quarter, revenue and gross profit were lower, but cost of revenue was also lower by a larger magnitude, resulting in a strengthened gross margin. Compared to the same quarter one year earlier, revenue, gross profit, and cost of revenue were all higher, while gross margin remained unchanged.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
44.7%
Gross profit
$572.4M
Revenue
$1.3B
Cost of revenue
$707.1M
Quarter-over-quarter change
+1.6 pts
Year-over-year change
+0.0 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 |
|---|---|---|---|---|
| Jun 30, 2023 | $1.2B | $529.0M | $654.4M | 44.7% |
| Sep 30, 2023 | $1.2B | $546.2M | $692.0M | 44.1% |
| Dec 31, 2023 | $1.3B | $560.0M | $737.7M | 43.2% |
| Jun 30, 2024 | $1.3B | $572.4M | $707.1M | 44.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2023
+1.6 pts
Year-over-year change
Jun 30, 2023
+0.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver was a lower proportion of cost of revenue relative to revenue in the current quarter compared to the prior quarter, resulting in a higher gross margin. This driver is supported by the faster decline in cost of revenue than revenue.
Compared to the immediate prior quarter, revenue and gross profit were lower, but cost of revenue was also lower by a larger magnitude, resulting in a strengthened gross margin. Compared to the same quarter one year earlier, revenue, gross profit, and cost of revenue were all higher, while gross margin remained unchanged.
Monitor whether the cost of revenue as a percentage of revenue continues to decline or stabilizes in future quarters, as this was the key factor behind the improvement in gross margin.