Teradyne, Inc. stock research
FY2023 Q3
Teradyne (TER) Gross Margin — Quarter Ended Oct 1, 2023
Revenue increased compared to the prior quarter but decreased compared to the same quarter one year earlier. Gross profit was slightly lower than the prior quarter and notably lower than a year ago, reflecting a cost of revenue that rose from the prior quarter but fell from the year-ago period, resulting in a gross margin that weakened relative to both comparisons.
Gross margin takeaway
Quarter ended Oct 1, 2023 · FY2023 Q3
Revenue increased compared to the prior quarter but decreased compared to the same quarter one year earlier. Gross profit was slightly lower than the prior quarter and notably lower than a year ago, reflecting a cost of revenue that rose from the prior quarter but fell from the year-ago period, resulting in a gross margin that weakened relative to both comparisons.
- The strongest observable margin driver is the change in cost of revenue relative to revenue: cost of revenue grew more than revenue from the prior quarter, while it declined less than revenue compared to the same quarter last year, compressing gross margin in both comparisons.
- Compared to the prior quarter, revenue was higher and gross profit was slightly lower, with cost of revenue higher, leading to a lower gross margin. Compared to the same quarter one year earlier, revenue, gross profit, and cost of revenue were all lower, but gross margin was also lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
56.6%
Gross profit
$398.3M
Revenue
$703.7M
Cost of revenue
$305.4M
Quarter-over-quarter change
-2.2 pts
Year-over-year change
-2.1 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 |
|---|---|---|---|---|
| Apr 2, 2023 | $617.5M | $356.4M | $261.1M | 57.7% |
| Jul 2, 2023 | $684.4M | $402.5M | $281.9M | 58.8% |
| Oct 1, 2023 | $703.7M | $398.3M | $305.4M | 56.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 2, 2023
-2.2 pts
Year-over-year change
Oct 2, 2022
-2.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the change in cost of revenue relative to revenue: cost of revenue grew more than revenue from the prior quarter, while it declined less than revenue compared to the same quarter last year, compressing gross margin in both comparisons.
Compared to the prior quarter, revenue was higher and gross profit was slightly lower, with cost of revenue higher, leading to a lower gross margin. Compared to the same quarter one year earlier, revenue, gross profit, and cost of revenue were all lower, but gross margin was also lower.
Monitor the level of prepayments to contract manufacturers, as disclosed in the filing, as changes in these prepayments may influence future cost of revenue.