Costco Wholesale Corporation (NASDAQ: COST) reported Q3 FY2025 revenue of $63.2 billion, up 8% year-over-year, with membership fees accounting for $1.24 billion, or just under 6% of total revenue for the quarter. On a year-to-date basis, membership revenue reached $3.6 billion, compared to $3.3 billion during the same period in FY2024.

While its core retail and e-commerce businesses delivered solid comparable sales growth (+5.7% total, +14.8% e-comm), Costco’s subscription-based membership program remains a cornerstone of its financial model, providing predictable, high-margin revenue.

Costco now reports:

• 79.6 million paid memberships (up 6.8% YoY)
• 142.8 million total cardholders
• 37.6 million Executive Members (who pay a premium and account for 73.1% of sales)
• 92.7% renewal rate in the U.S. and Canada, 90.2% globally

This consistency allows Costco to operate on razor-thin margins for its goods while maintaining a healthy bottom line. Net income for the quarter was $1.90 billion, up 13.2% year-over-year.

INSIDER TAKE:

Costco’s results once again demonstrate how a low-friction, high-retention subscription model can serve as a profit anchor for a high-volume, low-margin business. The company’s ability to generate 6% of total revenue from memberships alone—at high renewal rates and low churn—creates strategic and financial flexibility that most traditional retailers don’t enjoy.

The strong Executive Member penetration (73.1% of sales) indicates not just volume but tiered value capture, a key trend in modern subscription models. And with deferred membership fees growing to nearly $3 billion on the balance sheet, Costco’s future revenue visibility is unusually solid.

For subscription businesses, Costco offers an enduring case study: value-focused pricing, retention excellence, and a disciplined recurring revenue stream that scales with customer trust. Even as it expands digitally and geographically, membership remains the financial and strategic bedrock.