Steel Dynamics, Inc. (STLD) Income Statement

The sequential acceleration from 19.1% to 33.4% revenue growth suggests a robust demand environment, likely driven by both volume and pricing tailwinds. This marks a sharp reversal from the negative growth seen in 2024, indicating a cyclical upswing. Investors should monitor whether this pace is sustainable given steel's inherent cyclicality.

The 390 basis point expansion in gross margin over two quarters indicates that STLD is capturing higher prices relative to costs, likely benefiting from favorable supply-demand dynamics. This outperforms Nucor's 11.9% gross margin, suggesting superior cost management or product mix. However, margin cyclicality remains a key risk, as 2024Q1's 20.9% margin shows the potential for volatility.

The operating margin expansion from 7.0% to 12.6% demonstrates significant operating leverage, as SG&A costs grew only modestly relative to revenue. This indicates that fixed costs are being spread over a larger revenue base, amplifying profitability. The trend suggests that STLD's cost structure is well-positioned to benefit from volume increases, though investors should watch for SG&A creep.

The reduction in COGS ratio suggests that STLD is managing input costs effectively, likely benefiting from lower scrap prices or improved operational efficiency. SG&A expenses also remained relatively stable, growing only 11% year-over-year despite a 33% revenue increase, reflecting disciplined overhead management. This cost discipline is critical for sustaining margins in a cyclical industry.

The data shows a dramatic recovery from the 2024-2025 downturn, with revenue and margins rebounding strongly. This inflection appears driven by a combination of higher steel prices and volumes, as evidenced by the 33.4% revenue growth. The lasting impact is a more profitable operating base, but investors should remain cautious about the sustainability of this upcycle.