UnitedHealth Group Incorporated stock research
FY2023 Q4
UnitedHealth Group (UNH) Gross Margin — Quarter Ended Dec 31, 2023
Revenue and gross profit both increased compared with the prior quarter and the same quarter last year. Gross margin weakened slightly from both comparison periods as cost of revenue rose more quickly than revenue.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue and gross profit both increased compared with the prior quarter and the same quarter last year. Gross margin weakened slightly from both comparison periods as cost of revenue rose more quickly than revenue.
- Gross margin was driven primarily by the relationship between revenue and cost of revenue. The strongest observable driver was the increase in cost of revenue relative to revenue growth, which compressed margin.
- Compared with the immediately preceding quarter, revenue and gross profit were higher, but cost of revenue was also higher, leading to a slightly weakened gross margin. Relative to the same quarter one year earlier, revenue and gross profit improved, yet gross margin was lower due to a proportionally larger increase in cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
89.2%
Gross profit
$84.2B
Revenue
$94.4B
Cost of revenue
$10.2B
Quarter-over-quarter change
-0.6 pts
Year-over-year change
-0.8 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 | $91.9B | $82.5B | $9.4B | 89.8% |
| Jun 30, 2023 | $92.9B | $83.2B | $9.7B | 89.5% |
| Sep 30, 2023 | $92.4B | $82.9B | $9.4B | 89.8% |
| Dec 31, 2023 | $94.4B | $84.2B | $10.2B | 89.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
-0.6 pts
Year-over-year change
Dec 31, 2022
-0.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross margin was driven primarily by the relationship between revenue and cost of revenue. The strongest observable driver was the increase in cost of revenue relative to revenue growth, which compressed margin.
Compared with the immediately preceding quarter, revenue and gross profit were higher, but cost of revenue was also higher, leading to a slightly weakened gross margin. Relative to the same quarter one year earlier, revenue and gross profit improved, yet gross margin was lower due to a proportionally larger increase in cost of revenue.
Monitor the trend in cost of revenue relative to revenue, as its faster growth has been the primary factor behind the recent gross margin decline.