West Pharmaceutical Services, Inc. stock research
FY2024 Q1
West Pharmaceutical Services (WST) Gross Margin — Quarter Ended Mar 31, 2024
Revenue decreased while cost of revenue increased, causing gross profit to decline and gross margin to weaken. Compared with the prior quarter and the same quarter last year, gross margin was lower.
Gross margin takeaway
Quarter ended Mar 31, 2024 · FY2024 Q1
Revenue decreased while cost of revenue increased, causing gross profit to decline and gross margin to weaken. Compared with the prior quarter and the same quarter last year, gross margin was lower.
- The primary observable driver of the margin decline was a simultaneous decrease in revenue and increase in cost of revenue, which compressed gross profit. This pattern appeared both sequentially and year-over-year.
- Sequentially, revenue was lower and cost of revenue was higher, leading to a lower gross profit and a weakened gross margin. Compared with a year ago, revenue was lower, cost of revenue was higher, and gross profit as well as gross margin were lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
33.1%
Gross profit
$230.2M
Revenue
$695.4M
Cost of revenue
$465.2M
Quarter-over-quarter change
-4.9 pts
Year-over-year change
-4.8 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 |
|---|---|---|---|---|
| Jun 30, 2023 | $753.8M | $291.4M | $462.4M | 38.7% |
| Sep 30, 2023 | $747.4M | $288.3M | $459.1M | 38.6% |
| Dec 31, 2023 | $732.0M | $278.2M | $453.8M | 38.0% |
| Mar 31, 2024 | $695.4M | $230.2M | $465.2M | 33.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2023
-4.9 pts
Year-over-year change
Mar 31, 2023
-4.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary observable driver of the margin decline was a simultaneous decrease in revenue and increase in cost of revenue, which compressed gross profit. This pattern appeared both sequentially and year-over-year.
Sequentially, revenue was lower and cost of revenue was higher, leading to a lower gross profit and a weakened gross margin. Compared with a year ago, revenue was lower, cost of revenue was higher, and gross profit as well as gross margin were lower.
Monitor the trajectory of cost of revenue relative to revenue, as its increase alongside revenue decline was the central factor in margin compression.