Zoetis Inc. stock research
FY2024 Q3
Zoetis (ZTS) Gross Margin — Quarter Ended Sep 30, 2024
In the reported quarter, revenue after deducting cost of revenue yielded gross profit and a gross margin. Compared to the preceding quarter, revenue and gross profit were similar while cost of revenue was higher, causing gross margin to weaken; relative to the same quarter one year earlier, revenue and gross profit were higher and cost of revenue was also higher, yet gross margin improved slightly.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2024 Q3
In the reported quarter, revenue after deducting cost of revenue yielded gross profit and a gross margin. Compared to the preceding quarter, revenue and gross profit were similar while cost of revenue was higher, causing gross margin to weaken; relative to the same quarter one year earlier, revenue and gross profit were higher and cost of revenue was also higher, yet gross margin improved slightly.
- The strongest observable margin driver was the increase in cost of revenue from the preceding quarter, which outpaced the change in revenue and pressured gross margin.
- Sequentially, gross margin weakened as cost of revenue grew while revenue held steady. Year-over-year, gross margin improved modestly, with revenue and gross profit both higher despite a higher cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
70.6%
Gross profit
$1.7B
Revenue
$2.4B
Cost of revenue
$701.0M
Quarter-over-quarter change
-1.1 pts
Year-over-year change
+0.3 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 |
|---|---|---|---|---|
| Dec 31, 2023 | $2.2B | $1.5B | $728.0M | 67.1% |
| Mar 31, 2024 | $2.2B | $1.5B | $643.0M | 70.6% |
| Jun 30, 2024 | $2.4B | $1.7B | $668.0M | 71.7% |
| Sep 30, 2024 | $2.4B | $1.7B | $701.0M | 70.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
-1.1 pts
Year-over-year change
Sep 30, 2023
+0.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver was the increase in cost of revenue from the preceding quarter, which outpaced the change in revenue and pressured gross margin.
Sequentially, gross margin weakened as cost of revenue grew while revenue held steady. Year-over-year, gross margin improved modestly, with revenue and gross profit both higher despite a higher cost of revenue.
Monitor the planned sale of the medicated feed additive product portfolio and related assets, as noted in the filing, which may affect future cost of revenue and gross margin.