Zoetis Inc. stock research
FY2023 Q3
Zoetis (ZTS) Gross Margin — Quarter Ended Sep 30, 2023
Revenue was stable compared to the prior quarter, while gross profit decreased and cost of revenue increased, resulting in a lower gross margin. Compared to the same quarter one year earlier, revenue and gross profit were higher, and cost of revenue was also higher, but gross margin improved.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue was stable compared to the prior quarter, while gross profit decreased and cost of revenue increased, resulting in a lower gross margin. Compared to the same quarter one year earlier, revenue and gross profit were higher, and cost of revenue was also higher, but gross margin improved.
- The year-over-year improvement in gross margin is the most notable driver, with revenue increasing more than cost of revenue relative to the prior year.
- Compared to the prior quarter, the gross margin weakened as cost of revenue grew faster than revenue. Compared to the same quarter last year, the gross margin strengthened as revenue outpaced cost of revenue growth.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
70.3%
Gross profit
$1.5B
Revenue
$2.2B
Cost of revenue
$638.0M
Quarter-over-quarter change
-1.8 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 |
|---|---|---|---|---|
| Mar 31, 2023 | $2.0B | $1.4B | $588.0M | 70.6% |
| Jun 30, 2023 | $2.2B | $1.6B | $607.0M | 72.2% |
| Sep 30, 2023 | $2.2B | $1.5B | $638.0M | 70.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-1.8 pts
Year-over-year change
Sep 30, 2022
+0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The year-over-year improvement in gross margin is the most notable driver, with revenue increasing more than cost of revenue relative to the prior year.
Compared to the prior quarter, the gross margin weakened as cost of revenue grew faster than revenue. Compared to the same quarter last year, the gross margin strengthened as revenue outpaced cost of revenue growth.
Monitor inventory levels and sales trends, as the company noted inventory increases due to demand and product build-up, as well as lower-than-anticipated sales for certain products.