Xylem Inc. stock research
FY2024 Q1
Xylem (XYL) Gross Margin — Quarter Ended Mar 31, 2024
Revenue and cost of revenue both increased year-over-year, leading to higher gross profit, but gross margin weakened slightly. Sequentially, revenue and cost of revenue decreased, gross profit was stable, and gross margin improved.
Gross margin takeaway
Quarter ended Mar 31, 2024 · FY2024 Q1
Revenue and cost of revenue both increased year-over-year, leading to higher gross profit, but gross margin weakened slightly. Sequentially, revenue and cost of revenue decreased, gross profit was stable, and gross margin improved.
- The sequential improvement in gross margin was primarily associated with a proportionally larger decrease in cost of revenue relative to revenue. The year-over-year weakening reflected that cost of revenue grew at a faster pace than revenue.
- Compared to the prior quarter, gross margin improved as cost of revenue declined more than revenue. Compared to the same quarter last year, gross margin weakened as cost of revenue increased at a higher rate than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
37.0%
Gross profit
$752.0M
Revenue
$2.0B
Cost of revenue
$1.3B
Quarter-over-quarter change
+1.3 pts
Year-over-year change
-0.7 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 | $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% |
| Mar 31, 2024 | $2.0B | $752.0M | $1.3B | 37.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2023
+1.3 pts
Year-over-year change
Mar 31, 2023
-0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The sequential improvement in gross margin was primarily associated with a proportionally larger decrease in cost of revenue relative to revenue. The year-over-year weakening reflected that cost of revenue grew at a faster pace than revenue.
Compared to the prior quarter, gross margin improved as cost of revenue declined more than revenue. Compared to the same quarter last year, gross margin weakened as cost of revenue increased at a higher rate than revenue.
Monitor the impact of foreign exchange rate fluctuations, particularly the weakening of the Euro, Chilean Peso, and Canadian Dollar, as noted in the filing.