Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

CoStar Group Inc., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Federal	116,312)	61,290)	43,461)	53,039)	36,167)
State	31,231)	24,618)	11,726)	13,422)	5,140)
Foreign	664)	1,331)	195)	1,305)	708)
Current	148,207)	87,239)	55,382)	67,766)	42,015)
Federal	(20,455)	22,859)	(9,599)	6,881)	6,576)
State	(9,582)	8,467)	(926)	2,424)	(2,582)
Foreign	(1,166)	(7,161)	(1,005)	(1,085)	(328)
Deferred	(31,203)	24,165)	(11,530)	8,220)	3,666)
Provision for income taxes	117,004)	111,404)	43,852)	75,986)	45,681)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	CoStar Group Inc. current increased from 2020 to 2021 and from 2021 to 2022.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	CoStar Group Inc. deferred increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	CoStar Group Inc. provision for income taxes increased from 2020 to 2021 and from 2021 to 2022.

CoStar Group Inc., effective income tax rate (EITR) reconciliation

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Statutory federal income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
	Effective tax rate	24.05%	27.58%	16.18%	19.44%	16.08%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	CoStar Group Inc. effective tax rate increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

CoStar Group Inc., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Allowance for credit losses	3,373)	3,601)	3,698)	1,312)	1,457)
Accrued compensation	4,590)	3,913)	4,934)	4,297)	4,803)
Stock compensation	20,427)	18,956)	15,289)	13,877)	10,041)
Net operating losses	26,794)	45,835)	38,498)	20,555)	26,349)
Accrued reserve and other	6,768)	4,134)	5,900)	4,177)	1,773)
Lease liabilities	26,446)	28,306)	34,758)	36,472)	—)
Capitalized research and development costs	45,351)	—)	—)	—)	—)
Deferred rent	—)	—)	—)	—)	5,928)
Deferred gain on the sale of building	—)	—)	—)	—)	4,140)
Research and development credits	6,073)	5,812)	6,059)	6,341)	6,331)
Accrued transaction fees	—)	—)	13,334)	—)	—)
Deferred tax assets, prior to valuation allowance	139,822)	110,557)	122,470)	87,031)	60,822)
Valuation allowance	(5,241)	(5,694)	(11,170)	(13,553)	(14,246)
Deferred tax assets, net of valuation allowance	134,581)	104,863)	111,300)	73,478)	46,576)
Deferred commission costs, net	(36,112)	(25,700)	(23,691)	(22,612)	(19,314)
Lease right-of-use assets	(18,217)	(22,574)	(27,168)	(30,830)	—)
Prepaid expenses	(3,206)	(2,569)	(2,384)	(1,548)	(2,204)
Property and equipment, net	(25,691)	(21,827)	(13,078)	(8,891)	(5,367)
Intangible assets, net	(117,835)	(125,815)	(112,987)	(91,285)	(82,079)
Deferred tax liabilities	(201,061)	(198,485)	(179,308)	(155,166)	(108,964)
Net deferred tax assets (liabilities)	(66,480)	(93,622)	(68,008)	(81,688)	(62,388)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Deferred tax assets, prior to valuation allowance	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	CoStar Group Inc. deferred tax assets, prior to valuation allowance decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.
Deferred tax assets, net of valuation allowance	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	CoStar Group Inc. deferred tax assets, net of valuation allowance decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	CoStar Group Inc. net deferred tax assets (liabilities) decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

CoStar Group Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Deferred tax assets, net	9,722)	5,034)	4,983)	5,408)	7,469)
	Deferred tax liabilities	76,202)	98,656)	72,991)	87,096)	69,857)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Deferred tax assets, net	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	CoStar Group Inc. deferred tax assets, net increased from 2020 to 2021 and from 2021 to 2022.
Deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	CoStar Group Inc. deferred tax liabilities increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

CoStar Group Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	8,402,470)	7,256,871)	6,915,420)	3,853,986)	3,312,957)
Less: Noncurrent deferred tax assets, net	9,722)	5,034)	4,983)	5,408)	7,469)
Total assets (adjusted)	8,392,748)	7,251,837)	6,910,437)	3,848,578)	3,305,488)
Adjustment to Total Liabilities
Total liabilities (as reported)	1,532,349)	1,545,199)	1,540,061)	448,393)	291,015)
Less: Noncurrent deferred tax liabilities, net	76,202)	98,656)	72,991)	87,096)	69,857)
Total liabilities (adjusted)	1,456,147)	1,446,543)	1,467,070)	361,297)	221,158)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	6,870,121)	5,711,672)	5,375,359)	3,405,593)	3,021,942)
Less: Net deferred tax assets (liabilities)	(66,480)	(93,622)	(68,008)	(81,688)	(62,388)
Stockholders’ equity (adjusted)	6,936,601)	5,805,294)	5,443,367)	3,487,281)	3,084,330)
Adjustment to Net Income
Net income (as reported)	369,453)	292,564)	227,128)	314,963)	238,334)
Add: Deferred income tax expense (benefit)	(31,203)	24,165)	(11,530)	8,220)	3,666)
Net income (adjusted)	338,250)	316,729)	215,598)	323,183)	242,000)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

CoStar Group Inc., Financial Data: Reported vs. Adjusted

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CoStar Group Inc., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net Profit Margin
Reported net profit margin	16.93%	15.05%	13.69%	22.50%	20.00%
Adjusted net profit margin	15.50%	16.29%	13.00%	23.09%	20.30%
Total Asset Turnover
Reported total asset turnover	0.26	0.27	0.24	0.36	0.36
Adjusted total asset turnover	0.26	0.27	0.24	0.36	0.36
Financial Leverage
Reported financial leverage	1.22	1.27	1.29	1.13	1.10
Adjusted financial leverage	1.21	1.25	1.27	1.10	1.07
Return on Equity (ROE)
Reported ROE	5.38%	5.12%	4.23%	9.25%	7.89%
Adjusted ROE	4.88%	5.46%	3.96%	9.27%	7.85%
Return on Assets (ROA)
Reported ROA	4.40%	4.03%	3.28%	8.17%	7.19%
Adjusted ROA	4.03%	4.37%	3.12%	8.40%	7.32%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	CoStar Group Inc. adjusted net profit margin ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	CoStar Group Inc. adjusted total asset turnover ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	CoStar Group Inc. adjusted financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	CoStar Group Inc. adjusted ROE improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	CoStar Group Inc. adjusted ROA improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

CoStar Group Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	369,453)	292,564)	227,128)	314,963)	238,334)
Revenues	2,182,399)	1,944,135)	1,659,019)	1,399,719)	1,191,832)
Profitability Ratio
Net profit margin¹	16.93%	15.05%	13.69%	22.50%	20.00%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	338,250)	316,729)	215,598)	323,183)	242,000)
Revenues	2,182,399)	1,944,135)	1,659,019)	1,399,719)	1,191,832)
Profitability Ratio
Adjusted net profit margin²	15.50%	16.29%	13.00%	23.09%	20.30%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Net profit margin = 100 × Net income ÷ Revenues
= 100 × 369,453 ÷ 2,182,399 = 16.93%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 338,250 ÷ 2,182,399 = 15.50%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	CoStar Group Inc. adjusted net profit margin ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Revenues	2,182,399)	1,944,135)	1,659,019)	1,399,719)	1,191,832)
Total assets	8,402,470)	7,256,871)	6,915,420)	3,853,986)	3,312,957)
Activity Ratio
Total asset turnover¹	0.26	0.27	0.24	0.36	0.36
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenues	2,182,399)	1,944,135)	1,659,019)	1,399,719)	1,191,832)
Adjusted total assets	8,392,748)	7,251,837)	6,910,437)	3,848,578)	3,305,488)
Activity Ratio
Adjusted total asset turnover²	0.26	0.27	0.24	0.36	0.36

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 2,182,399 ÷ 8,402,470 = 0.26

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 2,182,399 ÷ 8,392,748 = 0.26

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	CoStar Group Inc. adjusted total asset turnover ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	8,402,470)	7,256,871)	6,915,420)	3,853,986)	3,312,957)
Stockholders’ equity	6,870,121)	5,711,672)	5,375,359)	3,405,593)	3,021,942)
Solvency Ratio
Financial leverage¹	1.22	1.27	1.29	1.13	1.10
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	8,392,748)	7,251,837)	6,910,437)	3,848,578)	3,305,488)
Adjusted stockholders’ equity	6,936,601)	5,805,294)	5,443,367)	3,487,281)	3,084,330)
Solvency Ratio
Adjusted financial leverage²	1.21	1.25	1.27	1.10	1.07

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 8,402,470 ÷ 6,870,121 = 1.22

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 8,392,748 ÷ 6,936,601 = 1.21

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	CoStar Group Inc. adjusted financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	369,453)	292,564)	227,128)	314,963)	238,334)
Stockholders’ equity	6,870,121)	5,711,672)	5,375,359)	3,405,593)	3,021,942)
Profitability Ratio
ROE¹	5.38%	5.12%	4.23%	9.25%	7.89%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	338,250)	316,729)	215,598)	323,183)	242,000)
Adjusted stockholders’ equity	6,936,601)	5,805,294)	5,443,367)	3,487,281)	3,084,330)
Profitability Ratio
Adjusted ROE²	4.88%	5.46%	3.96%	9.27%	7.85%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 369,453 ÷ 6,870,121 = 5.38%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 338,250 ÷ 6,936,601 = 4.88%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	CoStar Group Inc. adjusted ROE improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	369,453)	292,564)	227,128)	314,963)	238,334)
Total assets	8,402,470)	7,256,871)	6,915,420)	3,853,986)	3,312,957)
Profitability Ratio
ROA¹	4.40%	4.03%	3.28%	8.17%	7.19%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	338,250)	316,729)	215,598)	323,183)	242,000)
Adjusted total assets	8,392,748)	7,251,837)	6,910,437)	3,848,578)	3,305,488)
Profitability Ratio
Adjusted ROA²	4.03%	4.37%	3.12%	8.40%	7.32%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 369,453 ÷ 8,402,470 = 4.40%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 338,250 ÷ 8,392,748 = 4.03%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	CoStar Group Inc. adjusted ROA improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

CoStar Group Inc. (NASDAQ:CSGP)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

CoStar Group Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

CoStar Group Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)