Block, Inc. stock research
FY2023 Q3
Block (XYZ) Gross Margin — Quarter Ended Sep 30, 2023
Revenue increased while cost of revenue remained unchanged compared to the previous quarter, resulting in a slight improvement in gross margin. Relative to the same quarter one year earlier, both revenue and cost of revenue were higher, but the cost grew more proportionally, leading to a lower gross margin.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue increased while cost of revenue remained unchanged compared to the previous quarter, resulting in a slight improvement in gross margin. Relative to the same quarter one year earlier, both revenue and cost of revenue were higher, but the cost grew more proportionally, leading to a lower gross margin.
- The sequential improvement in gross margin was driven by revenue growth while cost of revenue stayed flat, allowing gross profit to remain steady and margin to edge higher. The year-over-year decline in margin reflects that cost of revenue increased at a faster pace than revenue.
- Compared with the previous quarter, gross margin improved slightly as revenue rose and cost of revenue was unchanged. Compared with the same quarter one year ago, gross margin weakened as both revenue and cost of revenue increased, with cost growing at a higher relative rate.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
33.8%
Gross profit
$1.9B
Revenue
$5.6B
Cost of revenue
$3.7B
Quarter-over-quarter change
+0.1 pts
Year-over-year change
-0.9 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 |
|---|---|---|---|---|
| Mar 31, 2023 | $5.0B | $1.7B | $3.3B | 34.4% |
| Jun 30, 2023 | $5.5B | $1.9B | $3.7B | 33.7% |
| Sep 30, 2023 | $5.6B | $1.9B | $3.7B | 33.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
+0.1 pts
Year-over-year change
Sep 30, 2022
-0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The sequential improvement in gross margin was driven by revenue growth while cost of revenue stayed flat, allowing gross profit to remain steady and margin to edge higher. The year-over-year decline in margin reflects that cost of revenue increased at a faster pace than revenue.
Compared with the previous quarter, gross margin improved slightly as revenue rose and cost of revenue was unchanged. Compared with the same quarter one year ago, gross margin weakened as both revenue and cost of revenue increased, with cost growing at a higher relative rate.
Monitor the trajectory of cost of revenue relative to revenue, as the year-over-year increase in cost outpaced revenue growth, pressuring margin.