Name: CoStar Group Inc. (NASDAQ:CSGP) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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CoStar Group Inc., consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Revenues	2,182,399)	1,944,135)	1,659,019)	1,399,719)	1,191,832)
Cost of revenues	(414,008)	(357,241)	(308,968)	(289,239)	(269,933)
Gross profit	1,768,391)	1,586,894)	1,350,051)	1,110,480)	921,899)
Selling and marketing, excluding customer base amortization	(684,222)	(622,007)	(535,778)	(408,596)	(359,858)
Software development	(220,923)	(201,022)	(162,916)	(125,602)	(100,937)
General and administrative	(338,737)	(256,711)	(299,698)	(178,740)	(156,659)
Customer base amortization	(73,560)	(74,817)	(62,457)	(33,995)	(30,881)
Operating expenses	(1,317,442)	(1,154,557)	(1,060,849)	(746,933)	(648,335)
Income from operations	450,949)	432,337)	289,202)	363,547)	273,564)
Interest income	64,450)	695)	4,399)	19,357)	13,369)
Interest on outstanding borrowings	(28,000)	(28,000)	(18,509)	—)	—)
Amortization of Senior Notes discount and issuance costs	(2,365)	(2,327)	(1,658)	(874)	(950)
Commitment fees and other	(1,960)	(1,989)	(1,627)	(1,741)	(1,880)
Interest expense	(32,325)	(32,316)	(21,794)	(2,615)	(2,830)
Interest income (expense), net	32,125)	(31,621)	(17,395)	16,742)	10,539)
Other income (expense), net	3,383)	3,252)	(827)	10,660)	(88)
Income before income taxes	486,457)	403,968)	270,980)	390,949)	284,015)
Income tax expense	(117,004)	(111,404)	(43,852)	(75,986)	(45,681)
Net income	369,453)	292,564)	227,128)	314,963)	238,334)

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).

Revenue exhibits a consistent upward trajectory over the five-year period, growing from $1.19 billion in 2018 to $2.18 billion by the end of 2022. This growth is mirrored by a steady increase in gross profit, which rose from $921.9 million to $1.77 billion. The observation that revenue growth outpaced the growth of the cost of revenues indicates an expansion in gross margin efficiency over time.

Operating Expense Trends: A significant increase in operating expenses is observed, rising from $648.3 million in 2018 to $1.32 billion in 2022. This expansion is primarily driven by increased spending in selling and marketing, which nearly doubled over the period, and a doubling of investments in software development. General and administrative expenses also showed a marked increase, particularly from 2019 to 2020, suggesting an expansion in organizational infrastructure.
Operating Income Performance: Income from operations demonstrates overall growth, increasing from $273.6 million in 2018 to $450.9 million in 2022. Although a temporary contraction occurred in 2020, where operating income dipped to $289.2 million due to rising operating expenses, the trend recovered strongly in the subsequent two years, indicating a successful scaling of operations relative to the cost base.
Financial Income and Debt Service: The company's financial structure shifted in 2020 with the introduction of interest on outstanding borrowings, which remained constant at $28 million through 2022. While net interest was negative in 2020 and 2021, a substantial increase in interest income to $64.5 million in 2022 reversed this trend, resulting in a net interest gain of $32.1 million for that year.
Net Profitability: Net income grew from $238.3 million in 2018 to $369.5 million in 2022. Despite the volatility in operating expenses and the introduction of debt service costs in 2020, the bottom line has maintained a positive growth trend, supported by robust revenue gains and the eventual impact of higher interest income.

The overall financial pattern indicates a period of aggressive investment in growth and product development. The capacity to increase revenues while simultaneously expanding gross margins suggests strong market positioning, while the recovery of operating income after 2020 indicates a stabilization of the increased cost structure.

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