The Trade Desk, Inc. stock research
FY2023 Q3
The Trade Desk (TTD) Gross Margin — Quarter Ended Sep 30, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin was slightly lower than both periods, as cost of revenue grew more than proportionally relative to revenue.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin was slightly lower than both periods, as cost of revenue grew more than proportionally relative to revenue.
- The relationship between cost of revenue and revenue was the primary observable driver of gross margin, with cost of revenue increasing at a higher pace than revenue compared to the year-ago quarter.
- Compared to the immediately preceding quarter, gross margin was marginally lower. Compared to the same quarter one year earlier, gross margin was also lower, reflecting a larger increase in cost of revenue relative to revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
81.1%
Gross profit
$399.9M
Revenue
$493.3M
Cost of revenue
$93.4M
Quarter-over-quarter change
-0.3 pts
Year-over-year change
-1.2 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 | $382.8M | $297.9M | $84.9M | 77.8% |
| Jun 30, 2023 | $464.3M | $377.6M | $86.7M | 81.3% |
| Sep 30, 2023 | $493.3M | $399.9M | $93.4M | 81.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-0.3 pts
Year-over-year change
Sep 30, 2022
-1.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The relationship between cost of revenue and revenue was the primary observable driver of gross margin, with cost of revenue increasing at a higher pace than revenue compared to the year-ago quarter.
Compared to the immediately preceding quarter, gross margin was marginally lower. Compared to the same quarter one year earlier, gross margin was also lower, reflecting a larger increase in cost of revenue relative to revenue.
Monitor the trend of cost of revenue as a proportion of revenue in future quarters.