Xylem Inc. stock research
FY2023 Q4
Xylem (XYL) Gross Margin — Quarter Ended Dec 31, 2023
Revenue was stable compared to the prior quarter, but cost of revenue was higher, resulting in lower gross profit and a weakened gross margin. Compared to the same quarter one year earlier, revenue was higher and gross profit was higher, yet gross margin was lower as cost of revenue increased at a faster rate.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue was stable compared to the prior quarter, but cost of revenue was higher, resulting in lower gross profit and a weakened gross margin. Compared to the same quarter one year earlier, revenue was higher and gross profit was higher, yet gross margin was lower as cost of revenue increased at a faster rate.
- The strongest observable margin driver is the increase in cost of revenue relative to revenue, which outpaced revenue growth both sequentially and year over year.
- Gross margin weakened sequentially from the prior quarter and also weakened compared to the same quarter one year earlier, despite higher revenue in the year-ago comparison.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
35.7%
Gross profit
$756.0M
Revenue
$2.1B
Cost of revenue
$1.4B
Quarter-over-quarter change
-1.1 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 | $1.4B | $546.0M | $902.0M | 37.7% |
| Jun 30, 2023 | $1.7B | $651.0M | $1.1B | 37.8% |
| Sep 30, 2023 | $2.1B | $764.0M | $1.3B | 36.8% |
| Dec 31, 2023 | $2.1B | $756.0M | $1.4B | 35.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
-1.1 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 is the increase in cost of revenue relative to revenue, which outpaced revenue growth both sequentially and year over year.
Gross margin weakened sequentially from the prior quarter and also weakened compared to the same quarter one year earlier, despite higher revenue in the year-ago comparison.
Monitor cost of revenue trends and their relationship to revenue, as the current quarter showed cost growth outpacing revenue.