West Pharmaceutical Services, Inc. stock research
FY2024 Q2
West Pharmaceutical Services (WST) Gross Margin — Quarter Ended Jun 30, 2024
Revenue increased slightly from the previous quarter but decreased compared to the same quarter last year. Gross profit remained nearly flat sequentially while declining from a year ago, and cost of revenue rose both quarter over quarter and year over year, resulting in a gross margin that weakened from both periods.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue increased slightly from the previous quarter but decreased compared to the same quarter last year. Gross profit remained nearly flat sequentially while declining from a year ago, and cost of revenue rose both quarter over quarter and year over year, resulting in a gross margin that weakened from both periods.
- The gross margin decline was driven by cost of revenue increasing at a faster rate than revenue, as cost rose both sequentially and year over year while revenue showed a mixed trend.
- Compared to the previous quarter, revenue was slightly higher while gross profit was essentially unchanged, and cost of revenue was higher, leading to a slightly lower gross margin. Compared to the same quarter last year, revenue and gross profit were both lower, while cost of revenue was higher, resulting in a significantly lower gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
32.8%
Gross profit
$230.0M
Revenue
$702.1M
Cost of revenue
$472.1M
Quarter-over-quarter change
-0.3 pts
Year-over-year change
-5.9 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 |
|---|---|---|---|---|
| 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% |
| Jun 30, 2024 | $702.1M | $230.0M | $472.1M | 32.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-0.3 pts
Year-over-year change
Jun 30, 2023
-5.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin decline was driven by cost of revenue increasing at a faster rate than revenue, as cost rose both sequentially and year over year while revenue showed a mixed trend.
Compared to the previous quarter, revenue was slightly higher while gross profit was essentially unchanged, and cost of revenue was higher, leading to a slightly lower gross margin. Compared to the same quarter last year, revenue and gross profit were both lower, while cost of revenue was higher, resulting in a significantly lower gross margin.
Monitor the impact of the company's increased capital expenditures for additional manufacturing capacity on future cost of revenue and gross margin trends.