Sunday, October 23, 2005

notes from the CSGP Q32005 CC

  • $34.3 million in revs, up 4.4% seq. and 20% yoy
  • $0.06 in EPS, includes one-time charge for research center closure
  • $128 million in cash
  • Avg. annualized new contract value YTD 05 $7,757 vs. $7,698 for YTD 04
  • 52% of sales growth for the Q comes from new customers
  • 1,510 new customers YTD, 538 new customers in Q3 -- the 538 is down sequentially
  • 20% response rate from 90 day free trial to prospects in existing markets, CSGP is hoping for big conversion of these trial users in Q4 and 2006
  • "For Sale" listings soar on website (+61% YTD), the "For Sale" listings are bundled with Property and Comps.
  • renewal rate 93.2% in Q305 vs. 91.2% in Q304
  • NRB Retail database integration complete in next 3-4 weeks, May 06 NRB product offering
  • Expansion program (21 new markets) -- 90% of this area is canvassed. CSGP currently serving 6 of the 21. Pushed back 2 of 21 from Q3 to Q405
  • Ad-hoc work and advertising revenue (5% of total revs) was weaker than expected in Q.
  • Gross Margin% should decline in Q405.
  • Inside sales force group growing rapidly (more junior) and outside sales force size remains flat.
  • CFO Frank Carchedi puts a marker for equity based compensation per quarter in 2006 at $2 million. Co. moving away from stock options and toward restricted stock grants.

One stat from the press release that I found interesting: 2005 YTD operating margin, after adding back the 1x charge is at 5.5%. 2004 YTD operating margin is also 5.5%. 30% operating margins should be here soon.

2 Comments:

Blogger oldsilver said...

Great overview of call. Key to CSGP value is achieving 30%-40% operating margins. I have been a long time investor a believe CSGP has one of the best business models out there but it is time for management to produce the type of leverage they have been promising.

4:04 PM  
Blogger BTS said...

oldsilver,
I agree with you. If 30% operating margins don't materialize, I look for a big haircut. I think we'll learn more about whether or not this is possible as we move through 2006. By then, the regional market expansion drag on OM% that we're seeing now will, according to the bulls, be removed. I'm not convinced that this will happen.

6:33 PM  

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