Xylem (XYL) Gross Margin — Quarter Ended Jun 30, 2023

Revenue increased compared to both the prior quarter and the same quarter last year, while cost of revenue also rose. Gross profit grew accordingly, resulting in a gross margin that was slightly higher than the prior quarter but slightly lower than the year-ago quarter.

Gross margin takeaway

Quarter ended Jun 30, 2023 · FY2023 Q2

The gross margin remained relatively stable as the increase in cost of revenue was in line with the increase in revenue.
Compared to the prior quarter, gross margin improved marginally. Compared to the same quarter one year earlier, gross margin weakened slightly.

Gross margin snapshot

The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.

Gross margin

37.8%

Gross profit

$651.0M

Revenue

$1.7B

Cost of revenue

$1.1B

Quarter-over-quarter change

+0.1 pts

Year-over-year change

-0.3 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	$1.4B	$546.0M	$902.0M	37.7%
Jun 30, 2023	$1.7B	$651.0M	$1.1B	37.8%

Quarterly comparisons

Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.

Previous-quarter change

Mar 31, 2023

+0.1 pts

Year-over-year change

Jun 30, 2022

-0.3 pts

What the margin says

Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.

The gross margin remained relatively stable as the increase in cost of revenue was in line with the increase in revenue.

Compared to the prior quarter, gross margin improved marginally. Compared to the same quarter one year earlier, gross margin weakened slightly.

Monitor the trend in cost of revenue relative to revenue, particularly in light of the acquisition-related activities noted in the filing.