Steel Dynamics, Inc. stock research
FY2023 Q3
Steel Dynamics (STLD) Gross Margin — Quarter Ended Sep 30, 2023
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year, while cost of revenue also declined. Gross margin weakened versus both periods, reflecting that the reduction in gross profit outpaced the decline in revenue.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year, while cost of revenue also declined. Gross margin weakened versus both periods, reflecting that the reduction in gross profit outpaced the decline in revenue.
- The strongest observable margin driver is the decline in gross profit relative to revenue, as gross margin contracted from both the prior quarter and the year-ago quarter. This indicates that cost of revenue did not decrease proportionally with revenue.
- Compared to the immediately preceding quarter, revenue, gross profit, and gross margin were all lower. Versus the same quarter one year earlier, all three metrics were also lower, with gross margin showing a similar degree of weakening.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
20.8%
Gross profit
$952.0M
Revenue
$4.6B
Cost of revenue
$3.6B
Quarter-over-quarter change
-5.0 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 |
|---|---|---|---|---|
| Mar 31, 2023 | $4.9B | $1.1B | $3.8B | 21.6% |
| Jun 30, 2023 | $5.1B | $1.3B | $3.8B | 25.7% |
| Sep 30, 2023 | $4.6B | $952.0M | $3.6B | 20.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-5.0 pts
Year-over-year change
Sep 30, 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 decline in gross profit relative to revenue, as gross margin contracted from both the prior quarter and the year-ago quarter. This indicates that cost of revenue did not decrease proportionally with revenue.
Compared to the immediately preceding quarter, revenue, gross profit, and gross margin were all lower. Versus the same quarter one year earlier, all three metrics were also lower, with gross margin showing a similar degree of weakening.
Monitor the trajectory of cost of revenue relative to revenue, as its slower decline contributed to margin compression.