Zoetis Inc. stock research
FY2023 Q4
Zoetis (ZTS) Gross Margin — Quarter Ended Dec 31, 2023
Revenue was stable compared to the prior quarter, while cost of revenue increased, causing gross profit to remain flat and gross margin to weaken. Compared to the same quarter last year, revenue and gross profit were higher, but gross margin was lower due to a proportionally larger increase in cost of revenue.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue was stable compared to the prior quarter, while cost of revenue increased, causing gross profit to remain flat and gross margin to weaken. Compared to the same quarter last year, revenue and gross profit were higher, but gross margin was lower due to a proportionally larger increase in cost of revenue.
- The strongest observable margin driver is the increase in cost of revenue relative to revenue, which compressed gross margin from the prior quarter. This relationship is the primary factor behind the margin movement.
- Compared to the immediately preceding quarter, gross margin weakened as cost of revenue grew while revenue was unchanged. Compared to the same quarter one year earlier, gross margin was lower despite higher revenue and gross profit, reflecting a larger share of cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
67.1%
Gross profit
$1.5B
Revenue
$2.2B
Cost of revenue
$728.0M
Quarter-over-quarter change
-3.2 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 | $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% |
| Dec 31, 2023 | $2.2B | $1.5B | $728.0M | 67.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
-3.2 pts
Year-over-year change
Dec 31, 2022
-0.9 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 compressed gross margin from the prior quarter. This relationship is the primary factor behind the margin movement.
Compared to the immediately preceding quarter, gross margin weakened as cost of revenue grew while revenue was unchanged. Compared to the same quarter one year earlier, gross margin was lower despite higher revenue and gross profit, reflecting a larger share of cost of revenue.
Monitor the trajectory of cost of revenue relative to revenue, as its increase was the key factor behind the gross margin decline.