Waste Management, Inc. stock research
FY2023 Q4
Waste Management (WM) Gross Margin — Quarter Ended Dec 31, 2023
Revenue remained stable compared to the prior quarter, while gross profit rose and cost of revenue declined, resulting in an improved gross margin. Compared to the same quarter a year ago, revenue was higher, gross profit increased, and cost of revenue was unchanged, leading to a stronger gross margin.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue remained stable compared to the prior quarter, while gross profit rose and cost of revenue declined, resulting in an improved gross margin. Compared to the same quarter a year ago, revenue was higher, gross profit increased, and cost of revenue was unchanged, leading to a stronger gross margin.
- The strongest observable margin driver was the reduction in cost of revenue relative to the prior quarter, as gross profit increased despite flat revenue.
- The gross margin improved both sequentially and year-over-year. Sequentially, the margin strengthened as costs fell while revenue held steady; year-over-year, the margin improved as revenue grew without a corresponding increase in cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
39.7%
Gross profit
$2.1B
Revenue
$5.2B
Cost of revenue
$3.1B
Quarter-over-quarter change
+1.0 pts
Year-over-year change
+2.4 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 | $4.9B | $1.8B | $3.1B | 36.9% |
| Jun 30, 2023 | $5.1B | $1.9B | $3.2B | 37.8% |
| Sep 30, 2023 | $5.2B | $2.0B | $3.2B | 38.7% |
| Dec 31, 2023 | $5.2B | $2.1B | $3.1B | 39.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+1.0 pts
Year-over-year change
Dec 31, 2022
+2.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver was the reduction in cost of revenue relative to the prior quarter, as gross profit increased despite flat revenue.
The gross margin improved both sequentially and year-over-year. Sequentially, the margin strengthened as costs fell while revenue held steady; year-over-year, the margin improved as revenue grew without a corresponding increase in cost of revenue.
Monitor the trajectory of cost of revenue, as its decline was the primary factor in the sequential margin improvement.