Vertex Pharmaceuticals Incorporated stock research
FY2023 Q4
Vertex Pharmaceuticals (VRTX) Gross Margin — Quarter Ended Dec 31, 2023
Revenue was stable compared with the prior quarter, while gross profit decreased and cost of revenue increased, resulting in a lower gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher but cost of revenue increased more than proportionally, causing gross margin to weaken.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue was stable compared with the prior quarter, while gross profit decreased and cost of revenue increased, resulting in a lower gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher but cost of revenue increased more than proportionally, causing gross margin to weaken.
- The most observable driver of gross margin was the change in cost of revenue, which increased from both the prior quarter and the year-ago quarter. Cost of revenue grew at a faster rate than revenue in both comparisons, compressing gross margin.
- Gross margin weakened sequentially and on a year-over-year basis. The decline from the prior quarter was steeper than the decline from the same quarter one year earlier.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
85.4%
Gross profit
$2.1B
Revenue
$2.5B
Cost of revenue
$368.0M
Quarter-over-quarter change
-1.8 pts
Year-over-year change
-2.3 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 | $2.4B | $2.1B | $266.9M | 88.8% |
| Jun 30, 2023 | $2.5B | $2.2B | $308.6M | 87.6% |
| Sep 30, 2023 | $2.5B | $2.2B | $318.7M | 87.2% |
| Dec 31, 2023 | $2.5B | $2.1B | $368.0M | 85.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
-1.8 pts
Year-over-year change
Dec 31, 2022
-2.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of gross margin was the change in cost of revenue, which increased from both the prior quarter and the year-ago quarter. Cost of revenue grew at a faster rate than revenue in both comparisons, compressing gross margin.
Gross margin weakened sequentially and on a year-over-year basis. The decline from the prior quarter was steeper than the decline from the same quarter one year earlier.
Monitor the trajectory of cost of revenue relative to revenue in future quarters, as its increase has outpaced revenue growth in two consecutive comparison periods.