Great analysis of the margin compression issue. The pass-through revenue piece is really underapreciated by most investors who just see top-line growth. I've seen this before with intergrated system providers where the incremental dollar looks good on revenue but kills blended margins, and the market eventually punishes that mix shift hard.
Exactly. Revenue quality matters more than revenue quantity. When growth is driven by pass-through or system-level dollars, the P&L optically improves while margins quietly deteriorate. The market usually tolerates that for a quarter or two. Eventually, it reprices the mix, not the headline.
Great analysis of the margin compression issue. The pass-through revenue piece is really underapreciated by most investors who just see top-line growth. I've seen this before with intergrated system providers where the incremental dollar looks good on revenue but kills blended margins, and the market eventually punishes that mix shift hard.
Exactly. Revenue quality matters more than revenue quantity. When growth is driven by pass-through or system-level dollars, the P&L optically improves while margins quietly deteriorate. The market usually tolerates that for a quarter or two. Eventually, it reprices the mix, not the headline.