2017 Q4 Form 10-Q Financial Statement

#000105735217000075 Filed on October 26, 2017

View on sec.gov

Income Statement

Concept 2017 Q4 2017 Q3 2016 Q3
Revenue $254.0M $247.5M $212.7M
YoY Change 16.34% 16.37% 12.5%
Cost Of Revenue $58.30M $55.48M $42.22M
YoY Change 26.71% 31.41% -21.42%
Gross Profit $195.7M $192.1M $170.5M
YoY Change 13.58% 12.65% 25.96%
Gross Profit Margin 77.05% 77.59% 80.15%
Selling, General & Admin $119.1M $108.7M $106.0M
YoY Change 18.63% 2.56% -5.01%
% of Gross Profit 60.86% 56.6% 62.17%
Research & Development $21.80M $21.54M $19.36M
YoY Change 9.55% 11.26% 13.54%
% of Gross Profit 11.14% 11.21% 11.35%
Depreciation & Amortization $15.30M $15.10M $6.794M
YoY Change -70.75% 122.25% 25.74%
% of Gross Profit 7.82% 7.86% 3.99%
Operating Expenses $144.9M $134.5M $130.9M
YoY Change 15.57% 2.78% -3.6%
Operating Profit $50.76M $57.51M $39.60M
YoY Change 8.25% 45.25% -9287.01%
Interest Expense $734.0K $2.901M $2.498M
YoY Change -71.26% 16.13% 5.71%
% of Operating Profit 1.45% 5.04% 6.31%
Other Income/Expense, Net -$700.0K -$2.200M -$1.700M
YoY Change -56.25% 29.41% 13.33%
Pretax Income $48.69M $55.17M $37.44M
YoY Change 6.96% 47.34% 69.51%
Income Tax $4.487M $20.99M $14.24M
% Of Pretax Income 9.22% 38.05% 38.03%
Net Earnings $44.20M $34.18M $23.20M
YoY Change 49.47% 47.31% -532.69%
Net Earnings / Revenue 17.4% 13.81% 10.91%
Basic Earnings Per Share $1.24 $1.05 $0.72
Diluted Earnings Per Share $1.22 $1.04 $0.72
COMMON SHARES
Basic Shares Outstanding 36.15M shares 32.44M shares 32.19M shares
Diluted Shares Outstanding 32.81M shares 32.44M shares

Balance Sheet

Concept 2017 Q4 2017 Q3 2016 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $1.212B $623.0M $523.3M
YoY Change 113.59% 19.05% 39.36%
Cash & Equivalents $1.211B $623.0M $522.1M
Short-Term Investments $1.200M
Other Short-Term Assets $15.60M $16.20M $11.70M
YoY Change 34.48% 38.46% -76.07%
Inventory
Prepaid Expenses
Receivables $60.90M $60.87M $47.46M
Other Receivables $0.00 $0.00 $1.000M
Total Short-Term Assets $1.288B $700.1M $583.4M
YoY Change 105.25% 19.99% 22.45%
LONG-TERM ASSETS
Property, Plant & Equipment $84.50M $84.33M $85.37M
YoY Change -3.51% -1.22% -2.58%
Goodwill $1.283B $1.283B $1.256B
YoY Change 2.28% 2.14% 0.51%
Intangibles $182.9M $191.2M $207.1M
YoY Change -6.67% -7.69% -17.42%
Long-Term Investments $10.10M $10.00M $9.900M
YoY Change 1.0% 1.01% -36.13%
Other Assets $11.60M $11.90M $10.40M
YoY Change 26.09% 14.42% 0.0%
Total Long-Term Assets $1.586B $1.581B $1.569B
YoY Change 1.79% 0.72% -2.79%
TOTAL ASSETS
Total Short-Term Assets $1.288B $700.1M $583.4M
Total Long-Term Assets $1.586B $1.581B $1.569B
Total Assets $2.873B $2.281B $2.153B
YoY Change 31.5% 5.95% 2.96%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $9.262M $11.32M $9.861M
YoY Change -19.31% 14.83% -30.61%
Accrued Expenses $22.19M $33.07M $33.25M
YoY Change -28.62% -0.54% -15.33%
Deferred Revenue $45.69M
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $36.91M $21.83M
YoY Change -100.0% 69.12% 9.13%
Total Short-Term Liabilities $146.7M $176.6M $153.5M
YoY Change -5.34% 15.07% -5.81%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $268.6M $315.7M
YoY Change -100.0% -14.92% -9.8%
Other Long-Term Liabilities $63.50M $50.90M $55.60M
YoY Change 24.51% -8.45% -1.77%
Total Long-Term Liabilities $0.00 $268.6M $315.7M
YoY Change -100.0% -14.92% -9.8%
TOTAL LIABILITIES
Total Short-Term Liabilities $146.7M $176.6M $153.5M
Total Long-Term Liabilities $0.00 $268.6M $315.7M
Total Liabilities $222.2M $518.2M $533.9M
YoY Change -58.14% -2.94% -8.07%
SHAREHOLDERS EQUITY
Retained Earnings $320.7M
YoY Change 63.77%
Common Stock $361.0K
YoY Change 10.74%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $2.651B $1.762B $1.619B
YoY Change
Total Liabilities & Shareholders Equity $2.873B $2.281B $2.153B
YoY Change 31.5% 5.95% 2.96%

Cashflow Statement

Concept 2017 Q4 2017 Q3 2016 Q3
OPERATING ACTIVITIES
Net Income $44.20M $34.18M $23.20M
YoY Change 49.47% 47.31% -532.69%
Depreciation, Depletion And Amortization $15.30M $15.10M $6.794M
YoY Change -70.75% 122.25% 25.74%
Cash From Operating Activities $71.40M $67.90M $57.00M
YoY Change 25.48% 19.12% 33.49%
INVESTING ACTIVITIES
Capital Expenditures -$4.700M -$7.100M -$4.300M
YoY Change -33.8% 65.12% -57.43%
Acquisitions
YoY Change
Other Investing Activities $0.00 -$2.700M $400.0K
YoY Change -100.0% -775.0% -109.3%
Cash From Investing Activities -$4.800M -$9.800M -$3.900M
YoY Change -18.64% 151.28% -72.73%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $834.0M
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 521.3M -100.0K 5.000M
YoY Change -9578.18% -102.0% -213.64%
NET CHANGE
Cash From Operating Activities 71.40M 67.90M 57.00M
Cash From Investing Activities -4.800M -9.800M -3.900M
Cash From Financing Activities 521.3M -100.0K 5.000M
Net Change In Cash 587.9M 58.00M 58.10M
YoY Change 1192.09% -0.17% 142.08%
FREE CASH FLOW
Cash From Operating Activities $71.40M $67.90M $57.00M
Capital Expenditures -$4.700M -$7.100M -$4.300M
Free Cash Flow $76.10M $75.00M $61.30M
YoY Change 18.91% 22.35% 16.1%

Facts In Submission

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CY2017Q3 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Gain Loss Included In Other Comprehensive Income Loss
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us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Gain Loss Included In Other Comprehensive Income Loss
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CY2016Q3 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Settlements
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us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Settlements
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CY2017Q3 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Settlements
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us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Settlements
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CY2015Q4 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Value
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us-gaap Foreign Currency Transaction Gain Loss Before Tax
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us-gaap General And Administrative Expense
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us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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CY2016Q4 us-gaap Income Taxes Receivable
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us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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us-gaap Increase Decrease In Accounts Receivable
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us-gaap Increase Decrease In Accounts Receivable
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us-gaap Increase Decrease In Deferred Revenue
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us-gaap Increase Decrease In Deferred Revenue
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us-gaap Increase Decrease In Deposits
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us-gaap Increase Decrease In Deposits
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us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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CY2016Q3 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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CY2017Q3 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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CY2016Q4 us-gaap Intangible Assets Net Excluding Goodwill
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CY2017Q3 us-gaap Intangible Assets Net Excluding Goodwill
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CY2016Q3 us-gaap Interest Expense
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us-gaap Interest Expense
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us-gaap Interest Expense
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us-gaap Interest Expense Debt
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us-gaap Interest Expense Debt
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CY2016Q3 us-gaap Interest Paid
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CY2016Q3 us-gaap Interest Paid
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us-gaap Interest Paid
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us-gaap Interest Paid
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CY2016Q4 us-gaap Liabilities
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CY2017Q3 us-gaap Liabilities
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CY2016Q4 us-gaap Liabilities And Stockholders Equity
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CY2017Q3 us-gaap Liabilities And Stockholders Equity
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CY2016Q4 us-gaap Liabilities Current
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CY2017Q3 us-gaap Liabilities Current
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us-gaap Line Of Credit Facility Collateral
LineOfCreditFacilityCollateral
The obligations under the 2014 Credit Agreement are guaranteed by all material subsidiaries of the Company and are secured by a lien on substantially all of the assets of the Company and those of its material subsidiaries, in each case subject to certain exceptions, pursuant to security and guarantee documents entered into on the Closing Date.
CY2016Q4 us-gaap Long Term Debt
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CY2017Q3 us-gaap Long Term Debt
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CY2016Q4 us-gaap Long Term Debt Current
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CY2017Q3 us-gaap Long Term Debt Current
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CY2016Q4 us-gaap Long Term Debt Noncurrent
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CY2017Q3 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
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CY2016Q4 us-gaap Long Term Investments
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9952000 USD
CY2017Q3 us-gaap Long Term Investments
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9952000 USD
us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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-17435000 USD
us-gaap Net Cash Provided By Used In Investing Activities
NetCashProvidedByUsedInInvestingActivities
-67521000 USD
us-gaap Net Cash Provided By Used In Operating Activities
NetCashProvidedByUsedInOperatingActivities
148460000 USD
us-gaap Net Cash Provided By Used In Operating Activities
NetCashProvidedByUsedInOperatingActivities
163307000 USD
CY2016Q3 us-gaap Net Income Loss
NetIncomeLoss
23201000 USD
us-gaap Net Income Loss
NetIncomeLoss
55498000 USD
CY2017Q3 us-gaap Net Income Loss
NetIncomeLoss
34177000 USD
us-gaap Net Income Loss
NetIncomeLoss
78491000 USD
us-gaap Number Of Operating Segments
NumberOfOperatingSegments
2 operating_segments
CY2016Q3 us-gaap Operating Expenses
OperatingExpenses
130893000 USD
us-gaap Operating Expenses
OperatingExpenses
393502000 USD
CY2016Q3 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Before Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIForSaleOfSecuritiesBeforeTax
0 USD
CY2017Q3 us-gaap Operating Expenses
OperatingExpenses
134537000 USD
us-gaap Operating Expenses
OperatingExpenses
426079000 USD
CY2016Q3 us-gaap Operating Income Loss
OperatingIncomeLoss
39596000 USD
us-gaap Operating Income Loss
OperatingIncomeLoss
98016000 USD
CY2017Q3 us-gaap Operating Income Loss
OperatingIncomeLoss
57513000 USD
us-gaap Operating Income Loss
OperatingIncomeLoss
123058000 USD
CY2016Q3 us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax
-596000 USD
us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax
-3054000 USD
CY2017Q3 us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax
1190000 USD
us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax
3432000 USD
CY2016Q3 us-gaap Other Comprehensive Income Loss Net Of Tax
OtherComprehensiveIncomeLossNetOfTax
-550000 USD
us-gaap Other Comprehensive Income Loss Net Of Tax
OtherComprehensiveIncomeLossNetOfTax
-2779000 USD
CY2017Q3 us-gaap Other Comprehensive Income Loss Net Of Tax
OtherComprehensiveIncomeLossNetOfTax
1190000 USD
us-gaap Other Comprehensive Income Loss Net Of Tax
OtherComprehensiveIncomeLossNetOfTax
3432000 USD
CY2017Q3 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Before Tax
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0 USD
us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Before Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIForSaleOfSecuritiesBeforeTax
0 USD
CY2016Q3 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
46000 USD
us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
275000 USD
CY2017Q3 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
0 USD
us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
0 USD
CY2016Q3 us-gaap Other Depreciation And Amortization
OtherDepreciationAndAmortization
6794000 USD
us-gaap Other Depreciation And Amortization
OtherDepreciationAndAmortization
18320000 USD
CY2017Q3 us-gaap Other Depreciation And Amortization
OtherDepreciationAndAmortization
6621000 USD
us-gaap Other Depreciation And Amortization
OtherDepreciationAndAmortization
19546000 USD
CY2016Q4 us-gaap Other Long Term Debt Current
OtherLongTermDebtCurrent
35000000 USD
CY2017Q3 us-gaap Other Long Term Debt Current
OtherLongTermDebtCurrent
40000000 USD
CY2016Q3 us-gaap Other Nonoperating Income
OtherNonoperatingIncome
344000 USD
us-gaap Other Nonoperating Income
OtherNonoperatingIncome
587000 USD
CY2017Q3 us-gaap Other Nonoperating Income
OtherNonoperatingIncome
555000 USD
us-gaap Other Nonoperating Income
OtherNonoperatingIncome
1589000 USD
us-gaap Payment Of Financing And Stock Issuance Costs
PaymentOfFinancingAndStockIssuanceCosts
0 USD
us-gaap Payment Of Financing And Stock Issuance Costs
PaymentOfFinancingAndStockIssuanceCosts
643000 USD
us-gaap Payments Related To Tax Withholding For Share Based Compensation
PaymentsRelatedToTaxWithholdingForShareBasedCompensation
14573000 USD
us-gaap Payments Related To Tax Withholding For Share Based Compensation
PaymentsRelatedToTaxWithholdingForShareBasedCompensation
14309000 USD
us-gaap Payments To Acquire Businesses Net Of Cash Acquired
PaymentsToAcquireBusinessesNetOfCashAcquired
10443000 USD
us-gaap Payments To Acquire Businesses Net Of Cash Acquired
PaymentsToAcquireBusinessesNetOfCashAcquired
47767000 USD
us-gaap Payments To Acquire Productive Assets
PaymentsToAcquireProductiveAssets
11692000 USD
us-gaap Payments To Acquire Productive Assets
PaymentsToAcquireProductiveAssets
19754000 USD
CY2016Q4 us-gaap Prepaid Expense And Other Assets Current
PrepaidExpenseAndOtherAssetsCurrent
11602000 USD
CY2017Q3 us-gaap Prepaid Expense And Other Assets Current
PrepaidExpenseAndOtherAssetsCurrent
16215000 USD
us-gaap Proceeds From Sale Maturity And Collections Of Investments
ProceedsFromSaleMaturityAndCollectionsOfInvestments
4700000 USD
us-gaap Proceeds From Sale Maturity And Collections Of Investments
ProceedsFromSaleMaturityAndCollectionsOfInvestments
0 USD
CY2016Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
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CY2017Q3 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
84326000 USD
us-gaap Provision For Doubtful Accounts
ProvisionForDoubtfulAccounts
6462000 USD
us-gaap Repayments Of Long Term Debt
RepaymentsOfLongTermDebt
20000000 USD
us-gaap Repayments Of Long Term Debt
RepaymentsOfLongTermDebt
35000000 USD
CY2016Q3 us-gaap Research And Development Expense Software Excluding Acquired In Process Cost
ResearchAndDevelopmentExpenseSoftwareExcludingAcquiredInProcessCost
19357000 USD
us-gaap Research And Development Expense Software Excluding Acquired In Process Cost
ResearchAndDevelopmentExpenseSoftwareExcludingAcquiredInProcessCost
56539000 USD
CY2017Q3 us-gaap Research And Development Expense Software Excluding Acquired In Process Cost
ResearchAndDevelopmentExpenseSoftwareExcludingAcquiredInProcessCost
21536000 USD
us-gaap Research And Development Expense Software Excluding Acquired In Process Cost
ResearchAndDevelopmentExpenseSoftwareExcludingAcquiredInProcessCost
67054000 USD
CY2016Q3 us-gaap Revenues
Revenues
212711000 USD
us-gaap Revenues
Revenues
619319000 USD
CY2017Q3 us-gaap Revenues
Revenues
247533000 USD
us-gaap Revenues
Revenues
711239000 USD
CY2016Q3 us-gaap Selling And Marketing Expense
SellingAndMarketingExpense
75414000 USD
us-gaap Selling And Marketing Expense
SellingAndMarketingExpense
231086000 USD
CY2017Q3 us-gaap Selling And Marketing Expense
SellingAndMarketingExpense
72705000 USD
us-gaap Selling And Marketing Expense
SellingAndMarketingExpense
240833000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
26981000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
29203000 USD
CY2016Q3 us-gaap Stock Issued During Period Shares Stock Options Exercised
StockIssuedDuringPeriodSharesStockOptionsExercised
3367 shares
CY2017Q3 us-gaap Stock Issued During Period Shares Stock Options Exercised
StockIssuedDuringPeriodSharesStockOptionsExercised
3532 shares
us-gaap Stock Issued During Period Shares Stock Options Exercised
StockIssuedDuringPeriodSharesStockOptionsExercised
81815 shares
CY2016Q4 us-gaap Stockholders Equity
StockholdersEquity
1654213000 USD
CY2017Q3 us-gaap Stockholders Equity
StockholdersEquity
1762427000 USD
CY2016Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
32440000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
32423000 shares
CY2017Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
32814000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
32705000 shares
CY2016Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
32186000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
32152000 shares
CY2017Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
32444000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
32375000 shares
us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Concentration of Credit Risk and Financial Instruments</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company maintains reserves for estimated inherent credit losses, and such losses have been within management&#8217;s expectations. The large size and widespread nature of the Company&#8217;s customer base and the Company&#8217;s lack of dependence on any individual customer mitigates the risk of nonpayment of the Company&#8217;s accounts receivable. The carrying amount of the accounts receivable approximates the net realizable value. The carrying value of the accounts receivable, accounts payable, accrued expenses and long-term debt approximates fair value.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company holds cash at major financial institutions in amounts that often exceed Federal Deposit Insurance Corporation insured limits. The Company manages its credit risk associated with cash concentrations by concentrating its cash deposits in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The carrying value of cash approximates fair value. Historically, the Company has not experienced any losses due to such cash concentrations. </font></div></div>
us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">ORGANIZATION</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">CoStar Group, Inc. (the &#8220;Company&#8221; or &#8220;CoStar&#8221;) provides information, analytics and online marketplace services to the commercial real estate and related business community through its comprehensive, proprietary database of commercial real estate information covering the United States (&#8220;U.S.&#8221;), the United Kingdom (&#8220;U.K.&#8221;), and parts of Canada, Spain, Germany and France. The Company provides online marketplaces for commercial real estate, apartment rentals, lands for sale and businesses for sale. The Company operates within </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> operating segments, North America and International, and its services are typically distributed to its clients under subscription-based license agreements that renew automatically, a majority of which have a term of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">one year</font><font style="font-family:inherit;font-size:10pt;">.</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts, credit reserves, useful lives of property and equipment and intangible assets, recoverability of long-lived assets and intangible assets with definite lives, goodwill, income taxes, fair value of equity instruments, fair value of auction rate securities ("ARS"), accounting for business combinations and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ from these estimates.</font></div></div>

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