Stock Analysis on Net
Stock Analysis on Net

CoStar Group Inc. (NASDAQ:CSGP)

This company has been moved to the archive! The financial data has not been updated since July 26, 2023.

Common-Size Income Statement
Quarterly Data

CoStar Group Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: 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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of revenues -18.54 -20.40 -19.05 -19.46 -18.83 -18.51 -17.03 -18.54 -18.65 -19.39 -17.59 -18.29 -18.64 -20.14 -20.01 -20.17 -20.92 -21.66 -21.63 -23.59 -22.60 -22.83
Gross profit 81.46% 79.60% 80.95% 80.54% 81.17% 81.49% 82.97% 81.46% 81.35% 80.61% 82.41% 81.71% 81.36% 79.86% 79.99% 79.83% 79.08% 78.34% 78.37% 76.41% 77.40% 77.17%
Selling and marketing, excluding customer base amortization -41.26 -38.71 -30.26 -33.29 -33.81 -27.92 -27.36 -36.06 -34.27 -30.30 -30.06 -34.45 -32.85 -31.93 -26.64 -28.79 -34.64 -26.82 -21.91 -29.21 -38.03 -32.33
Software development -10.46 -11.40 -10.19 -10.22 -9.62 -10.47 -10.36 -10.64 -10.11 -10.22 -9.36 -9.57 -9.82 -10.62 -9.76 -9.25 -8.28 -8.50 -8.11 -8.57 -8.84 -8.37
General and administrative -14.95 -15.32 -16.07 -16.39 -14.42 -15.11 -13.81 -12.95 -12.12 -13.95 -26.58 -15.35 -14.45 -15.02 -13.56 -12.91 -12.32 -12.20 -12.36 -12.77 -12.81 -14.83
Customer base amortization -1.72 -1.82 -2.26 -5.32 -2.77 -3.12 -3.74 -3.83 -3.82 -4.02 -4.00 -4.29 -3.76 -2.93 -3.07 -2.16 -2.09 -2.34 -2.51 -2.73 -2.97 -2.12
Operating expenses -68.39% -67.24% -58.78% -65.22% -60.63% -56.62% -55.26% -63.48% -60.32% -58.50% -69.99% -63.66% -60.88% -60.50% -53.04% -53.11% -57.32% -49.87% -44.89% -53.27% -62.66% -57.65%
Income from operations 13.06% 12.36% 22.18% 15.32% 20.54% 24.87% 27.70% 17.97% 21.03% 22.11% 12.42% 18.05% 20.48% 19.36% 26.95% 26.72% 21.76% 28.47% 33.48% 23.14% 14.74% 19.53%
Interest income (expense), net 8.57 7.45 5.68 1.91 -0.63 -1.50 -1.56 -1.59 -1.64 -1.72 -1.78 -1.77 -0.91 0.42 0.92 1.25 1.36 1.28 0.00 0.00 0.00 0.00
Other income (expense), net 0.10 0.10 -0.04 0.25 0.25 0.17 0.18 0.31 0.18 -0.01 -0.19 -0.08 -0.12 0.21 2.64 0.07 0.16 0.00 1.24 0.76 0.65 0.84
Income before income taxes 21.73% 19.91% 27.83% 17.48% 20.16% 23.54% 26.32% 16.69% 19.57% 20.38% 10.45% 16.20% 19.45% 20.00% 30.50% 28.04% 23.28% 29.75% 34.72% 23.90% 15.39% 20.36%
Income tax expense -5.14 -5.00 -6.13 -4.50 -4.60 -6.22 -7.99 -3.81 -6.84 -4.17 -2.40 -2.53 -4.25 -1.42 -7.04 -5.75 -4.88 -3.82 -8.26 -4.66 -0.63 -1.28
Net income 16.59% 14.91% 21.69% 12.98% 15.56% 17.32% 18.33% 12.88% 12.73% 16.21% 8.05% 13.67% 15.20% 18.58% 23.46% 22.28% 18.40% 25.93% 26.46% 19.23% 14.76% 19.08%

Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

An analysis of the common-size income statement reveals a period of gross margin expansion countered by rising operating expenses and a significant shift in non-operating income streams. While the company maintained strong core profitability at the gross level, operating margins have experienced compression over the observed period.

Gross Profitability Trends
Gross profit margins demonstrated a general upward trajectory, moving from approximately 77% in early 2018 to consistently exceeding 80% between 2020 and 2023. This improvement is attributed to a reduction in the cost of revenues, which declined from a peak of 23.59% in September 2018 to a low of 17.03% in December 2021, before stabilizing around 18-20% in the most recent quarters.
Operating Expense Dynamics
Operating expenses have exhibited increased volatility and a general upward trend. Selling and marketing expenses represent the most significant variable, fluctuating between 21.91% and a peak of 41.26% by June 30, 2023. Software development costs have also seen a gradual increase, rising from approximately 8% in 2018 to roughly 10-11% in 2022 and 2023. General and administrative expenses remained relatively stable between 12% and 16%, with the exception of a singular spike to 26.58% in December 2020.
Operating Income Performance
The expansion in gross margins was offset by the increase in operating expenditures, leading to a compression of the operating margin. Income from operations reached a peak of 33.48% in December 2018 but trended downward over the long term, settling between 12.36% and 13.06% in the first half of 2023. This suggests that the cost of acquiring customers and developing software has grown faster than the efficiency gains in revenue production.
Non-Operating Income and Net Results
A notable shift occurred in net interest positioning. After transitioning from interest income in 2019 to interest expenses between 2020 and early 2022, the company experienced a sharp increase in interest income, reaching 8.57% of revenues by June 30, 2023. This surge in non-operating income has partially mitigated the decline in operating profitability, supporting net income margins which fluctuated between 12.98% and 21.69% in the final two years of the period.

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