CoStar Group, Inc. stock research
FY2024 Q3
CoStar Group (CSGP) Gross Margin — Quarter Ended Sep 30, 2024
Revenue increased from the prior quarter and from the same quarter a year ago, driving a higher gross profit despite a larger cost of revenue. Gross margin weakened slightly compared to both periods, as cost of revenue grew at a faster pace relative to revenue.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2024 Q3
Revenue increased from the prior quarter and from the same quarter a year ago, driving a higher gross profit despite a larger cost of revenue. Gross margin weakened slightly compared to both periods, as cost of revenue grew at a faster pace relative to revenue.
- The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth. Revenue rose from both the prior quarter and the year-ago quarter, but cost of revenue increased at a greater rate, causing gross margin to narrow modestly.
- Compared to the immediately preceding quarter, revenue and gross profit were higher while cost of revenue was also higher, resulting in a slightly weakened gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was higher, and gross margin was slightly lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
79.7%
Gross profit
$552.0M
Revenue
$692.6M
Cost of revenue
$140.6M
Quarter-over-quarter change
-0.3 pts
Year-over-year change
-0.5 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 |
|---|---|---|---|---|
| Dec 31, 2023 | $640.1M | $504.3M | $135.8M | 78.8% |
| Mar 31, 2024 | $656.4M | $515.2M | $141.2M | 78.5% |
| Jun 30, 2024 | $677.8M | $542.0M | $135.8M | 80.0% |
| Sep 30, 2024 | $692.6M | $552.0M | $140.6M | 79.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
-0.3 pts
Year-over-year change
Sep 30, 2023
-0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth. Revenue rose from both the prior quarter and the year-ago quarter, but cost of revenue increased at a greater rate, causing gross margin to narrow modestly.
Compared to the immediately preceding quarter, revenue and gross profit were higher while cost of revenue was also higher, resulting in a slightly weakened gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was higher, and gross margin was slightly lower.
Monitor the trend of cost of revenue relative to revenue, as its faster growth has pressured gross margin for two consecutive comparative periods.