Most investors inconsistently view quarterly earnings as a catalyst for stock prices upon the news release. They often find themselves trapped in the volatility of sudden moves and face the risk of large—or total, in the case of options—losses if the direction of the stock after the announcement goes the wrong way. There is a way to somewhat accurately predict where a stock could go after earnings announcements or to see where broader markets are betting these stocks could go on the event. Keeping the sayin ...

Most investors are under the impression that lower interest rates coming from the Fed might mean lower returns. While that might be true for some industries and companies, some in the technology sector seem to have a chance at another outperforming rally before the year is over. Now that the market is placing most – if not all – premium valuations on the sector, investors can count on the ease of bullish price action and momentum to carry a select group of stocks forward and above the rest. Of course, the b ...

Investors in CoStar Group, Inc. (CSGP) need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 17, 2025 $35.00 Call had some of the highest implied volatility of all equity options today. What is Implied Volatility? Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could ...

[Part I - Financial Information](index=7&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) CoStar Group reported a 12% revenue increase to $677.8 million in Q2 2024, yet net income significantly declined to $19.2 million due to rising operating expenses, with total assets reaching $9.07 billion and operating cash flow decreasing Financial Performance Summary | Financial Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $677.8 M | $605.9 M | $1,334.2 M | $1,190.3 M | | **Gross Profit** | $542.0 M | $493.5 M | $1,057.2 M | $958.7 M | | **(Loss) Income from Operations** | $(16.1) M | $79.1 M | $(58.9) M | $151.4 M | | **Net Income** | $19.2 M | $100.5 M | $25.9 M | $187.7 M | | **Diluted EPS** | $0.05 | $0.25 | $0.06 | $0.46 | Balance Sheet Summary | Balance Sheet Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $5,207.2 M | $5,476.1 M | | **Total Assets** | $9,067.3 M | $8,919.7 M | | **Total Current Liabilities** | $561.7 M | $455.8 M | | **Total Liabilities** | $1,671.6 M | $1,581.1 M | | **Total Stockholders' Equity** | $7,395.7 M | $7,338.6 M | Cash Flow Summary | Cash Flow Activity (Six Months Ended) | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $197.7 M | $298.4 M | | **Net Cash used in Investing Activities** | $(477.6) M | $(54.4) M | | **Net Cash used in Financing Activities** | $(15.3) M | $(6.3) M | | **Net (Decrease) Increase in Cash** | $(296.4) M | $237.3 M | [Revenue Analysis](index=24&type=section&id=3.%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Subscription-based services accounted for 96% of Q2 2024 revenue, with North America contributing $643.8 million of the $677.8 million total, and Multifamily being the largest service segment at $264.2 million - Subscription-based contracts accounted for approximately **96% of total revenues** for the three and six months ended June 30, 2024[88](index=88&type=chunk) Revenue by Service (Q2 2024, in millions) | Revenue by Service (Q2 2024, in millions) | North America | International | Total | | :--- | :--- | :--- | :--- | | CoStar | $237.1 | $15.9 | $253.0 | | Information Services | $27.9 | $5.5 | $33.4 | | Multifamily | $264.2 | - | $264.2 | | LoopNet | $67.2 | $2.6 | $69.8 | | Residential | $16.2 | $10.0 | $26.2 | | Other Marketplaces | $31.2 | - | $31.2 | | **Total Revenues** | **$643.8** | **$34.0** | **$677.8** | [Acquisitions](index=28&type=section&id=5.%20ACQUISITIONS) The company expanded through the $120.4 million acquisition of OnTheMarket in December 2023 and plans to acquire Matterport for an estimated $940 million cash consideration, pending regulatory and shareholder approval - In December 2023, CoStar UK acquired OnTheMarket for total consideration of **£96.0 million ($120.4 million)**, adding **$62.8 million in goodwill** to the International operating segment[177](index=177&type=chunk)[152](index=152&type=chunk) - On April 21, 2024, the company agreed to acquire Matterport, Inc. for **$2.75 in cash per share** plus CoStar shares, with an estimated total cash consideration of **$940 million**[127](index=127&type=chunk)[153](index=153&type=chunk) - The Matterport merger is subject to customary conditions, including shareholder approval and HSR Act regulatory clearance, and is expected to close in the **fourth quarter of 2024**[127](index=127&type=chunk)[153](index=153&type=chunk) [Long-Term Debt](index=33&type=section&id=10.%20LONG-TERM%20DEBT) As of June 30, 2024, the company's long-term debt includes $1.0 billion in 2.800% Senior Notes due 2030, supplemented by a new undrawn $1.1 billion revolving credit facility established in May 2024 - The company holds **$1.0 billion** in aggregate principal amount of **2.800% Senior Notes due July 15, 2030**[190](index=190&type=chunk) - On May 24, 2024, a new **$1.1 billion revolving credit facility** maturing in May 2029 was established, with **no amounts drawn** as of June 30, 2024[164](index=164&type=chunk)[166](index=166&type=chunk) [Management's Discussion and Analysis (MD&A)](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 2024's 12% revenue growth to strong Multifamily and Residential segments, despite a significant 43% increase in selling and marketing expenses leading to an operating loss and reduced net income, while maintaining strong liquidity for strategic investments - Key priorities for the remainder of 2024 include continued investment in residential marketplaces (Homes.com and OnTheMarket), expansion of the Richmond, VA technology center, and build-out of a new headquarters in Arlington, VA[243](index=243&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk) - The company's contract renewal rate for subscription-based services with terms of at least one year was approximately **90%** for the trailing 12 months ended June 30, 2024[241](index=241&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Q2 2024 revenues increased 12% to $677.8 million, driven by Multifamily and Residential growth, but a 43% surge in selling and marketing expenses led to a $16.1 million operating loss and an 81% decline in net income Selected Financial Performance (Q2 2024 vs Q2 2023) | Selected Items (Q2 2024 vs Q2 2023) | Q2 2024 ($M) | Q2 2023 ($M) | Change ($M) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | 677.8 | 605.9 | 71.9 | 12% | | Multifamily Revenue | 264.2 | 224.3 | 39.9 | 18% | | Residential Revenue | 26.2 | 12.7 | 13.5 | 106% | | **Selling & Marketing Expense** | 358.4 | 250.0 | 108.4 | 43% | | **(Loss) Income from Operations** | (16.1) | 79.1 | (95.2) | NM | | **Net Income** | 19.2 | 100.5 | (81.3) | (81%) | - The increase in selling and marketing expenses was primarily driven by a **$93 million increase in marketing expenses** for advertising the company's brands and a **$15 million increase in personnel costs**[269](index=269&type=chunk)[258](index=258&type=chunk)[303](index=303&type=chunk) - The effective tax rate for Q2 2024 was **47%**, a significant increase from **24% in Q2 2023**, while income tax expense decreased by **$14 million** due to lower pre-tax income[305](index=305&type=chunk) [Business Segment Results](index=46&type=section&id=Business%20Segment%20Results) In Q2 2024, North America's revenue grew 10% to $644 million, but EBITDA fell 71% to $31 million due to increased costs, while International revenue surged 57% to $34 million, resulting in a $19 million EBITDA loss Segment EBITDA (Q2 2024 vs Q2 2023) | Segment EBITDA (Q2 2024 vs Q2 2023) | Q2 2024 ($M) | Q2 2023 ($M) | Change ($M) | | :--- | :--- | :--- | :--- | | North America | 30.8 | 104.6 | (73.8) | | International | (18.7) | 0.6 | (19.3) | | **Total EBITDA** | **12.1** | **105.2** | **(93.1)** | - The decrease in North America EBITDA was primarily due to increases in **marketing costs, personnel costs, and professional service fees**[307](index=307&type=chunk) - The decrease in International EBITDA was primarily due to the **OnTheMarket Acquisition** and an increase in **personnel costs** associated with the expansion of the international research team[307](index=307&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with $4.9 billion in cash as of Q2 2024, despite a $296 million cash decrease driven by $478 million in investing activities and reduced operating cash flow, but believes resources are sufficient for future commitments including the Matterport acquisition - Cash and cash equivalents were **$4.9 billion** as of June 30, 2024, down from **$5.2 billion** at December 31, 2023[352](index=352&type=chunk)[356](index=356&type=chunk) - Net cash provided by operating activities decreased by **$101 million** to **$198 million** for the first six months of 2024 compared to the same period in 2023, primarily due to lower net income[330](index=330&type=chunk) - Significant cash outlays include the pending Matterport acquisition (estimated **$940 million cash consideration**) and the Richmond campus expansion (expected total cost of **$450 million - $600 million**)[353](index=353&type=chunk)[355](index=355&type=chunk)[326](index=326&type=chunk) [Market Risk Disclosures](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, impacting approximately 5% of revenues, and interest rate changes related to its undrawn $1.1 billion variable-rate credit facility, alongside potential impairment of $2.7 billion in goodwill and intangible assets - Approximately **5% of revenues** for the first six months of 2024 were denominated in foreign currencies, with a hypothetical **10% strengthening of the U.S. dollar** decreasing these revenues by approximately **$3.3 million**[363](index=363&type=chunk) - Interest rate risk is tied to the **$1.1 billion revolving credit facility** with a variable interest rate, which had **no outstanding balance** as of June 30, 2024[364](index=364&type=chunk) - The company held approximately **$2.7 billion of goodwill and intangible assets** as of June 30, 2024, which are subject to impairment risk based on economic and industry conditions[340](index=340&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2024, the CEO and CFO concluded the company's disclosure controls and procedures are effective, with ongoing implementation of a new financial system expected to further enhance internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2024[342](index=342&type=chunk) - The company is engaged in a multi-year implementation of a new financial system intended to enhance operational and financial accounting processes[367](index=367&type=chunk) [Part II - Other Information](index=55&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, but management believes no current legal matters will have a material adverse effect on its financial position or results of operations - The company is not currently a party to any lawsuit or proceeding that management believes is likely to have a material adverse effect on its financial position or results of operations[345](index=345&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the 2023 Form 10-K and the Q1 2024 Form 10-Q - No material changes have been made to the risk factors disclosed in the 2023 Form 10-K and the Q1 2024 Form 10-Q[346](index=346&type=chunk)

CoStar Group (CSGP) reported non-GAAP earnings of 15 cents per share in second-quarter 2024, surpassing the Zacks Consensus Estimate by 66.67% but plunging 51.6% year over year. Revenues of $678 million beat the Zacks Consensus Estimate by 0.14% and increased 12% year over year. The upside was driven by robust performance in key segments. Top-Line Details CoStar revenues (37.3% of revenues) of $253 million beat the consensus estimate by 0.61% and increased 10.4% year over year. Apartments.com revenues incre ...

Financial Data and Key Metrics Changes - CoStar Group reported revenue of $253 million for Q2 2024, representing a 10% increase year-over-year, in line with guidance [32] - Adjusted EBITDA was $41 million, significantly above the guidance of $5 million to $10 million and consensus estimates of $10 million [17][67] - The company maintained a strong balance sheet with $4.9 billion in cash and a net interest income of $53 million for the quarter [69] Business Line Data and Key Metrics Changes - Apartments.com revenue was $264 million for Q2 2024, reflecting an 18% growth year-over-year [11] - Homes.com achieved 99 million average monthly unique visitors, a 197% increase compared to the same quarter last year [18] - LoopNet revenue grew to $70 million, up 7% year-over-year, exceeding the high end of the guidance [43] Market Data and Key Metrics Changes - The STR sales team saw a 54% increase in net new sales year-over-year, with revenue from benchmarking products increasing by 28% [33] - The average monthly unique visitors for CoStar's platforms showed significant growth, with Homes.com and Apartments.com leading in traffic [10][31] - The commercial real estate market is showing signs of recovery, with transaction volumes increasing slightly by 6% year-over-year [46] Company Strategy and Development Direction - The company is focused on building a dedicated Homes.com sales team to drive future revenue growth [26][49] - CoStar aims to enhance its product offerings and maintain its competitive edge in the market, particularly in the residential sector [93][119] - The company is committed to continuous investment in Homes.com to capture long-term revenue opportunities [130] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Homes.com product, highlighting its potential for high ROI and the need for a dedicated sales force [76][100] - The economic conditions in the apartment industry are favorable, with vacancy rates forecasted to remain elevated [41] - Management acknowledged the challenges posed by competition but emphasized the company's strong market position and product differentiation [93][104] Other Important Information - The company reported a contract renewal rate of 90% for Q2, with a renewal rate of 95% for long-term subscribers [69] - CoStar's marketing campaign for Apartments.com is generating significant media impressions, reaching over 2.1 billion [30] - The company is expanding its international presence, with ongoing efforts to penetrate markets in Europe [126] Q&A Session Summary Question: What drove the decision to lower the guidance for the residential business? - Management indicated that the main factor was the rotation of the core sales force back to their primary products, impacting Homes.com sales [90] Question: How does the company plan to maintain its leadership position amid increasing competition? - Management highlighted the importance of product development and maintaining a robust marketing strategy to outpace competitors [93][119] Question: What are the expectations for the Homes.com initiative moving forward? - Management expects steady investment in Homes.com, with a focus on building a dedicated sales team to drive growth [130][132]

The reported revenue represents a surprise of +0.14% over the Zacks Consensus Estimate of $676.85 million. With the consensus EPS estimate being $0.09, the EPS surprise was +66.67%. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. For the quarter ended June 2024, CoStar Group (CSGP) reported revenue of $677.8 million, up 11.9% over the same period last year. EPS ...

Core Insights - CoStar Group (CSGP) reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, but down from $0.31 per share a year ago [1] - The earnings surprise for this quarter was 66.67%, with the company also surpassing earnings expectations in the previous quarter [2][3] - CoStar's revenues for the quarter were $677.8 million, which was 0.14% above the Zacks Consensus Estimate and an increase from $605.91 million year-over-year [8] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $707.06 million, and for the current fiscal year, it is $0.62 on revenues of $2.78 billion [6] - The trend of estimate revisions for CoStar is mixed, leading to a Zacks Rank of 3 (Hold), indicating expected performance in line with the market [12] Industry Context - CoStar operates within the Computers - IT Services industry, which is currently ranked in the bottom 40% of over 250 Zacks industries [10] - The industry outlook can significantly impact stock performance, with top-ranked industries historically outperforming lower-ranked ones by more than 2 to 1 [10] Stock Performance - CoStar shares have declined approximately 13.6% since the beginning of the year, contrasting with the S&P 500's gain of 16.7% [4] - The company's ability to sustain immediate price movements will largely depend on management's commentary during the earnings call [11]

Source: Google Analytics Unique Visitors – All CoStar Group Sites. Growth rate based on 2Q24 vs 2Q23. | --- | --- | |-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | • | Second quarter 2024 revenue of $678 million increased 12% year-over-year and our two businesses with billion dollar run rates delivered double-digit revenue growth. | | • | Annualized net new bookings ...

CoStar Group Second Quarter 2024 Revenue Increased 12% Year-over-Year and Net New Bookings were $67 Million. CoStar Group Reaches a Record 183 Million Average Monthly Unique Visitors. "We achieved another strong quarter of results in terms of revenue, sales and traffic to our websites," said Andy Florance, Founder and CEO of CoStar Group. "Overall revenue grew 12% year-over-year, and our two billion-dollar run rate businesses continue to deliver double-digit revenue growth with Apartments.com growing at 18% ...