Steel Dynamics, Inc. stock research
FY2024 Q2
Steel Dynamics (STLD) Gross Margin — Quarter Ended Jun 30, 2024
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year, while cost of revenue increased relative to the prior quarter but decreased year-over-year. Gross margin weakened sequentially and declined more sharply from the year-ago period, reflecting a compression between revenue and cost of revenue.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year, while cost of revenue increased relative to the prior quarter but decreased year-over-year. Gross margin weakened sequentially and declined more sharply from the year-ago period, reflecting a compression between revenue and cost of revenue.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue declined more than cost of revenue on a sequential basis, and the year-over-year decline in revenue was not matched by a proportional decline in cost of revenue.
- Compared to the immediately preceding quarter, revenue was lower, cost of revenue was higher, and gross profit was lower, resulting in a weakened gross margin. Compared to the same quarter one year earlier, revenue, gross profit, and gross margin were all lower, while cost of revenue was slightly lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
16.7%
Gross profit
$774.8M
Revenue
$4.6B
Cost of revenue
$3.9B
Quarter-over-quarter change
-4.2 pts
Year-over-year change
-9.0 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 | $952.0M | $3.6B | 20.8% |
| Dec 31, 2023 | $4.2B | $730.9M | $3.5B | 17.3% |
| Mar 31, 2024 | $4.7B | $980.8M | $3.7B | 20.9% |
| Jun 30, 2024 | $4.6B | $774.8M | $3.9B | 16.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-4.2 pts
Year-over-year change
Jun 30, 2023
-9.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue declined more than cost of revenue on a sequential basis, and the year-over-year decline in revenue was not matched by a proportional decline in cost of revenue.
Compared to the immediately preceding quarter, revenue was lower, cost of revenue was higher, and gross profit was lower, resulting in a weakened gross margin. Compared to the same quarter one year earlier, revenue, gross profit, and gross margin were all lower, while cost of revenue was slightly lower.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters, as its slower decline has been a key factor in margin compression.