CoStar Group, Inc. stock research
FY2023 Q3
CoStar Group (CSGP) Gross Margin — Quarter Ended Sep 30, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter a year earlier. Gross margin weakened slightly from the prior quarter and the year-ago quarter, as cost of revenue rose at a faster pace than revenue.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter a year earlier. Gross margin weakened slightly from the prior quarter and the year-ago quarter, as cost of revenue rose at a faster pace than revenue.
- The relationship among revenue, cost of revenue, and gross profit shows that while revenue grew, cost of revenue increased more sharply, slightly compressing gross margin. The strongest observable driver is the rise in cost of revenue relative to revenue.
- Compared to the prior quarter, gross margin is lower, and compared to the same quarter one year ago, gross margin is also slightly lower. Revenue and gross profit are higher in both comparisons.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.2%
Gross profit
$501.0M
Revenue
$624.7M
Cost of revenue
$123.7M
Quarter-over-quarter change
-1.3 pts
Year-over-year change
-0.3 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $584.4M | $465.2M | $119.2M | 79.6% |
| Jun 30, 2023 | $605.9M | $493.5M | $112.4M | 81.4% |
| Sep 30, 2023 | $624.7M | $501.0M | $123.7M | 80.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-1.3 pts
Year-over-year change
Sep 30, 2022
-0.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The relationship among revenue, cost of revenue, and gross profit shows that while revenue grew, cost of revenue increased more sharply, slightly compressing gross margin. The strongest observable driver is the rise in cost of revenue relative to revenue.
Compared to the prior quarter, gross margin is lower, and compared to the same quarter one year ago, gross margin is also slightly lower. Revenue and gross profit are higher in both comparisons.
Monitor the trajectory of cost of revenue to see if its growth rate moderates relative to revenue.