Targa Resources Corp. stock research
FY2023 Q4
Targa Resources (TRGP) Gross Margin — Quarter Ended Dec 31, 2023
Revenue and gross profit increased compared to the prior quarter and the same quarter last year, while cost of revenue was higher sequentially but lower year over year. Gross margin improved versus both periods, reflecting a favorable shift in the relationship between revenue and cost of revenue.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue and gross profit increased compared to the prior quarter and the same quarter last year, while cost of revenue was higher sequentially but lower year over year. Gross margin improved versus both periods, reflecting a favorable shift in the relationship between revenue and cost of revenue.
- The year-over-year margin expansion was driven by a combination of higher revenue and lower cost of revenue, which together produced a substantially larger gross profit. Sequentially, revenue growth outpaced the increase in cost of revenue, allowing margin to rise slightly.
- Compared to the immediately preceding quarter, gross margin was higher as revenue and gross profit increased while cost of revenue rose at a slower pace. Compared to the same quarter one year earlier, gross margin was significantly higher, driven by both higher revenue and lower cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
31.6%
Gross profit
$1.3B
Revenue
$4.2B
Cost of revenue
$2.9B
Quarter-over-quarter change
+0.7 pts
Year-over-year change
+13.0 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 |
|---|---|---|---|---|
| Mar 31, 2023 | $3.8B | $782.8M | $3.0B | 20.6% |
| Jun 30, 2023 | $2.7B | $650.7M | $2.1B | 23.9% |
| Sep 30, 2023 | $3.9B | $1.2B | $2.7B | 31.0% |
| Dec 31, 2023 | $4.2B | $1.3B | $2.9B | 31.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+0.7 pts
Year-over-year change
Dec 31, 2022
+13.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The year-over-year margin expansion was driven by a combination of higher revenue and lower cost of revenue, which together produced a substantially larger gross profit. Sequentially, revenue growth outpaced the increase in cost of revenue, allowing margin to rise slightly.
Compared to the immediately preceding quarter, gross margin was higher as revenue and gross profit increased while cost of revenue rose at a slower pace. Compared to the same quarter one year earlier, gross margin was significantly higher, driven by both higher revenue and lower cost of revenue.
Monitor regulatory developments related to hydraulic fracturing and greenhouse gas emissions, as they may affect supply volumes and asset utilization in the company's operations.