Revenue Analysis:
Total and Operating Revenue – Over the three-year period, CSGP shows a trend of increasing revenue. From 2023 Q1 to 2024 Q1, Total Revenue increased from $584.4 million to $656.4 million. This growth trend also applies to Operating Revenue, which mirrors the figures of Total Revenue.
Gross Profit – Gross Profit continuously escalated from $465.2 million in 2023 Q1 to $515.2 million by 2024 Q1. The Gross Profit margin, calculated as Gross Profit divided by Total Revenue, has notably improved, indicating better cost management relative to sales.
Cost Management:
Cost of Revenue – There’s a moderate increase in Cost of Revenue, from $119.2 million in 2023 Q1 to $141.2 million by 2024 Q1, in line with revenue growth, indicating controlled scaling expenses.
Operating Expense – Operating Expense has seen a significant increase from $393 million in 2023 Q1 to $563.1 million in 2024 Q1, suggesting a surge in operational activities and potential investments in capacity or capabilities.
Total Expenses – Reflecting the trend in Operating Expenses, Total Expenses increased from $512.2 million in 2023 Q1 to $704.3 million by 2024 Q1, emphasizing higher operational costs that need further scrutiny for efficiency.
Profitability Analysis:
EBITDA – CSGP’s EBITDA shows volatility; it was $97.8 million in 2023 Q1 and fluctuated throughout the year to – $14.6 million by 2024 Q1. This indicates certain challenges in maintaining consistent earnings before interest, taxes, depreciation, and amortization.
Operating Income – Operating Income witnessed a significant downturn from $72.2 million in 2023 Q1 to -$47.9 million by 2024 Q1, a red flag indicating potential issues in operational efficiency or increased expenses not matched with corresponding revenue.
Pretax Income and Net Income – Pretax Income decreased from $116.3 million in 2023 Q1 to $11.5 million by 2024 Q1. Parallelly, Net Income fell sharply from $87.1 million in 2023 Q1 to $6.7 million in 2024 Q1, pointing to an overall decline in profitability.
Cash Flow Indicators:
Reconciled Depreciation – The annualized depreciation expenses have seen an upward path, reflecting the elevated asset base via Depreciation and Amortization expenses recorded in the Income Statement.
Interest Expense – There is a continuous engagement in leveraging as indicated by stable Net Interest Income figures such as $58.4 million in 2023 Q1 to $56.2 million in 2024 Q1.
Taxation:
Tax Rate – The effective tax rate of the company varied, with a notable calculation at 40% in 2024 Q1, up from 25.11% in 2023 Q1.
Tax Provision – The Tax Provisions aligned with the profitability, decreasing notably in 2024 Q1 to $4.8 million from $29.2 million in 2023 Q1.
Tax Effect of Unusual Items – There were no entries recorded under this throughout the analyzed period, indicating no significant unusual or non-recurring items impacting taxable income.
Shareholder Metrics:
Diluted and Basic EPS – Both Diluted EPS and Basic EPS show a significant decline, with Diluted EPS falling from $0.21 in 2023 Q1 to $0.02 in 2024 Q1. This suggests a decrease in profitability per share, affecting shareholder returns.
Average Shares – The counts of both Diluted and Basic average shares remained relatively stable, indicating no major equity dilutions or buybacks during the period.
Net Income Available to Common Stockholders – This tracked the Net Income closely, signaling that common shareholders bore the brunt of the reduced profitability.
Conclusion:
CSGP showed revenue growth but faced profitability challenges marked by a substantial decrease in EBITDA, Operating Income, and Net Income over the last three years. Increasing operating expenses without proportional increases in revenue, alongside higher taxation and operational inefficiencies, were key issues. It is recommended to streamline operations, manage costs more efficiently, and possibly reconsider strategies that could lead to enhanced profitability.