Viper Energy Ut (VNOM)

Gross profit margin

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Gross profit (ttm)	US$ in thousands	602,494	717,627	689,195	670,976	684,790	618,728	699,493	736,825	702,385	614,270	496,800	394,130	235,601	171,049	91,243	72,758	188,650	203,585	249,343	241,441
Revenue (ttm)	US$ in thousands	836,400	920,052	864,131	827,697	826,610	754,987	833,522	866,467	828,629	735,016	609,844	504,917	415,453	350,391	268,910	250,626	267,014	275,860	315,385	298,283
Gross profit margin		72.03%	78.00%	79.76%	81.07%	82.84%	81.95%	83.92%	85.04%	84.76%	83.57%	81.46%	78.06%	56.71%	48.82%	33.93%	29.03%	70.65%	73.80%	79.06%	80.94%

September 30, 2024 calculation

Gross profit margin = Gross profit (ttm) ÷ Revenue (ttm)
= $602,494K ÷ $836,400K
= 72.03%

The gross profit margin of Viper Energy Ut has shown fluctuations over the past several quarters. The trend indicates a general downward movement, starting at a high of 85.04% in December 2022 and gradually decreasing to 72.03% in September 2024. This decline could be a cause for concern, as it suggests a potential erosion of profitability at the gross level.

However, it is worth noting that despite the recent decline, the company's gross profit margin has historically shown resilience, with occasional spikes and dips. The highest point observed was in December 2019 at 80.94%, which was followed by a significant drop in the subsequent three quarters. Subsequently, the margin recovered and even exceeded previous highs before the recent downward trend.

Overall, the gross profit margin trend of Viper Energy Ut signals the importance of closely monitoring cost structures, sales prices, and efficiency in managing direct production costs to sustain and potentially improve profitability levels in the future.