West Pharmaceutical Services, Inc. stock research
FY2023 Q3
West Pharmaceutical Services (WST) Gross Margin — Quarter Ended Sep 30, 2023
Revenue, gross profit, and cost of revenue all decreased slightly from the prior quarter, while gross margin weakened marginally. Compared to the same quarter last year, revenue and gross profit were higher, but gross margin was lower, as cost of revenue grew more than proportionally.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue, gross profit, and cost of revenue all decreased slightly from the prior quarter, while gross margin weakened marginally. Compared to the same quarter last year, revenue and gross profit were higher, but gross margin was lower, as cost of revenue grew more than proportionally.
- The strongest observable margin driver is the relationship between cost of revenue and revenue: cost of revenue decreased less than revenue from the prior quarter, and increased more than revenue year over year, compressing gross margin.
- Compared to the prior quarter, gross margin was slightly lower, with revenue and gross profit both declining modestly. Versus the same quarter last year, gross margin weakened, as revenue and gross profit increased but cost of revenue rose at a faster pace.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
38.6%
Gross profit
$288.3M
Revenue
$747.4M
Cost of revenue
$459.1M
Quarter-over-quarter change
-0.1 pts
Year-over-year change
-0.4 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 | $716.6M | $271.3M | $445.3M | 37.9% |
| Jun 30, 2023 | $753.8M | $291.4M | $462.4M | 38.7% |
| Sep 30, 2023 | $747.4M | $288.3M | $459.1M | 38.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-0.1 pts
Year-over-year change
Sep 30, 2022
-0.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between cost of revenue and revenue: cost of revenue decreased less than revenue from the prior quarter, and increased more than revenue year over year, compressing gross margin.
Compared to the prior quarter, gross margin was slightly lower, with revenue and gross profit both declining modestly. Versus the same quarter last year, gross margin weakened, as revenue and gross profit increased but cost of revenue rose at a faster pace.
Monitor the trend in cost of revenue relative to revenue, as its faster growth year over year has pressured gross margin.