PART I — FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, detailing a 15% revenue increase, net income decline, and asset growth from acquisitions Condensed Consolidated Statements of Operations Highlights (Q2 & H1 2025 vs 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | H1 2025 (in millions) | H1 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $781.3 | $677.8 | $1,513.5 | $1,334.2 | | **Gross Profit** | $613.5 | $542.0 | $1,192.4 | $1,057.2 | | **Loss from Operations** | $(27.2) | $(16.1) | $(70.0) | $(58.9) | | **Net Income (Loss)** | $6.2 | $19.2 | $(8.6) | $25.9 | | **Net Income (Loss) per Share - Diluted** | $0.01 | $0.05 | $(0.02) | $0.06 | Condensed Consolidated Balance Sheet Highlights (as of June 30, 2025) | Account | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $3,628.6 | $4,681.0 | | Goodwill | $3,689.6 | $2,527.6 | | Intangible assets, net | $915.6 | $433.2 | | **Total Assets** | **$10,507.1** | **$9,256.8** | | Total Liabilities | $1,905.7 | $1,703.3 | | **Total Stockholders' Equity** | **$8,601.4** | **$7,553.5** | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $199.7 | $197.7 | | Net cash used in investing activities | $(1,061.4) | $(477.6) | | Net cash used in financing activities | $(98.4) | $(15.3) | | **Net decrease in cash** | **$(954.0)** | **$(296.4)** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Details operating segments, subscription services, Matterport and Visual Lease acquisitions, litigation, and stock repurchases - The company operates in two segments: North America (U.S. and Canada) and International (Europe, Asia-Pacific, Latin America), with most services being subscription-based for at least one year, and recent significant events including the Visual Lease acquisition in November 2024 and the Matterport acquisition in February 2025[22](index=22&type=chunk)[23](index=23&type=chunk) Disaggregated Revenue by Service (Six Months Ended June 30) | Service Line | 2025 Revenue (in millions) | 2024 Revenue (in millions) | | :--- | :--- | :--- | | CoStar | $536.0 | $503.3 | | Information Services | $79.1 | $66.4 | | Multifamily | $574.8 | $519.0 | | LoopNet | $148.5 | $138.9 | | Residential | $55.6 | $44.8 | | Other Revenues | $119.5 | $61.8 | | **Total Revenues** | **$1,513.5** | **$1,334.2** | - The Matterport acquisition was completed on February 28, 2025, for a total purchase consideration of **$1.9 billion**, resulting in **$1.1 billion** of goodwill, while the Visual Lease acquisition in November 2024 for **$276.0 million** added **$149.5 million** in goodwill[97](index=97&type=chunk)[101](index=101&type=chunk)[105](index=105&type=chunk) - A litigation accrual of **$96.7 million** was recorded related to the Matterport acquisition concerning a stockholder lawsuit, considering a damages award and estimated interest[135](index=135&type=chunk) - In February 2025, the Board approved a stock repurchase program authorizing up to **$500 million**, and during the first six months of 2025, the company repurchased **825,000 shares** for **$63.8 million**[143](index=143&type=chunk)[144](index=144&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 15% Q2 revenue growth, driven by acquisitions, outlining strategic priorities, increased operating expenses, and strong liquidity - Key strategic priorities for the remainder of 2025 include continuing to invest in Homes.com, integrating Matterport's AI and 3D digital twin technology, expanding CoStar and LoopNet internationally, and leveraging data from CoStar Real Estate Manager and Visual Lease to create new information products[181](index=181&type=chunk)[186](index=186&type=chunk) Q2 2025 vs Q2 2024 Revenue Performance by Service | Service | Q2 2025 Revenue (in millions) | Q2 2024 Revenue (in millions) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | CoStar | $270.9 | $253.0 | 7% | | Information Services | $39.3 | $33.4 | 18% | | Multifamily | $292.3 | $264.2 | 11% | | LoopNet | $75.7 | $69.8 | 8% | | Residential | $28.4 | $26.2 | 8% | | Other Revenues | $74.7 | $31.2 | 139% | | **Total Revenues** | **$781.3** | **$677.8** | **15%** | - The company's liquidity position remains strong with **$3.7 billion** in cash, cash equivalents, and restricted cash as of June 30, 2025, despite major cash uses for the Matterport acquisition, the pending Domain transaction (expected to cost **~$1.5 billion**), the Richmond campus expansion (additional **$260 million** commitment), and the stock repurchase program[211](index=211&type=chunk)[212](index=212&type=chunk)[217](index=217&type=chunk) - Net cash used in investing activities increased significantly to **$1.1 billion** for the first six months of 2025, up from **$478 million** in the same period of 2024, primarily driven by the Matterport acquisition and the purchase of Domain equity securities[222](index=222&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include foreign currency fluctuations, equity price volatility, and interest rate changes, with currency hedges for the Domain acquisition - The company is exposed to foreign currency risk, primarily from the British Pound, Canadian Dollar, Australian Dollar, and Euro; for H1 2025, a 10% strengthening of the U.S. dollar would have decreased revenues by approximately **$9 million**[232](index=232&type=chunk) - The equity investment in Domain is subject to market price volatility, where a 10% change in Domain's share price would impact the investment's value by approximately **$30 million**, also exposed to Australian dollar exchange rate risk[233](index=233&type=chunk) - To manage currency risk for the pending Domain acquisition, the company entered into deal-contingent foreign currency forward contracts with a notional amount of **A$2.4 billion** (**$1.5 billion**)[234](index=234&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective as of June 30, 2025, with ongoing financial system implementation and acquisition integration - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[239](index=239&type=chunk) - Ongoing projects include a multi-year financial system implementation and the integration of internal controls from recent acquisitions, such as Matterport[240](index=240&type=chunk)[241](index=241&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, with no expected material adverse effect on financial position, referring to Note 12 for details - The company is not a party to any lawsuit that management believes is likely to have a material adverse effect on its financial position or results of operations, with specific details on litigation referred to Note 12 of the financial statements[244](index=244&type=chunk) [Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, highlighting new risks from Matterport's supplier reliance, Domain equity investment, and open-source software use - A new risk factor highlights Matterport's reliance on a limited number of suppliers for its camera hardware, which could lead to production delays, increased costs, and an inability to meet customer demand if supply is disrupted[246](index=246&type=chunk)[247](index=247&type=chunk) - The company's significant equity investment in Domain introduces risk of material variability in reported earnings due to fluctuations in Domain's stock price and currency exchange rates[249](index=249&type=chunk) - Risks associated with the pending acquisition of Domain include the possibility of non-completion, loss of key employees, higher-than-expected costs, and failure to realize anticipated synergies and growth prospects[251](index=251&type=chunk)[253](index=253&type=chunk)[256](index=256&type=chunk) - The use of third-party open-source software in products presents a risk, where failure to comply with license terms could force the company to release proprietary source code, re-engineer products, or face litigation[257](index=257&type=chunk)[258](index=258&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details Q2 2025 stock repurchase activities, with 585,000 shares bought for $45.3 million, leaving $436.2 million available Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Approx. Value Remaining in Program (in millions) | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 4,299 | $79.41 | — | — | | May 2025 | 287,344 | $75.54 | 285,000 | $460.0 | | June 2025 | 307,860 | $79.19 | 300,000 | $436.2 | | **Total Q2** | **599,503** | **$77.45** | **585,000** | **$436.2** | - In February 2025, the Board approved a stock repurchase program for up to **$500 million**; during Q2 2025, the company repurchased **585,000 shares** for **$45.3 million** under this program[263](index=263&type=chunk) [Exhibits](index=63&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including the 2025 Stock Incentive Plan, Domain acquisition deed, and officer certifications - Key exhibits filed with this report include the CoStar Group, Inc. 2025 Stock Incentive Plan, the Scheme Implementation Deed for the acquisition of Domain Holdings Australia Limited, and certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[268](index=268&type=chunk)

Core Insights - CoStar Group (CSGP) reported non-GAAP earnings of 17 cents per share in Q2 2025, exceeding the Zacks Consensus Estimate by 21.43% and showing a 13.3% increase year over year [1][9] - Revenues reached $781.3 million, surpassing the Zacks Consensus Estimate by 1.25% and reflecting a 15.3% year-over-year growth, marking the 57th consecutive quarter of double-digit revenue growth [2][9] Revenue Breakdown - CoStar's revenues from its primary segments included $270.9 million from CoStar (34.7% of total revenues), which beat estimates by 1.12% and increased 7.1% year over year [4] - Information Services generated $39.3 million (5% of revenues), exceeding estimates by 6.97% and growing 17.7% year over year [4] - Multifamily revenues totaled $292 million (37.4% of revenues), slightly missing estimates by 0.33% but increasing 10.6% year over year [5] - LoopNet revenues were $75.7 million (9.7% of revenues), beating estimates by 1.41% and growing 8.5% year over year [5] - Other marketplace revenues reached $74.7 million (9.6% of revenues), significantly exceeding estimates by 48.81% and increasing 139.4% year over year [6] Operating Performance - Selling and marketing expenses rose 10.2% year over year to $394.9 million, accounting for 50.5% of revenues, down from 52.9% in the previous year [7] - General and administrative expenses decreased to 15.6% of revenues, a contraction of 60 basis points year over year [7] - Operating expenses increased 14.8% year over year to $640.7 million, but as a percentage of revenues, they decreased to 82% [8] Guidance and Future Outlook - CSGP raised its revenue guidance for Q3 2025 to between $800 million and $805 million, indicating a year-over-year growth of 16% at the mid-point [12] - For the full year 2025, revenues are expected to be between $3.135 billion and $3.155 billion, reflecting a 15% growth at the mid-point [12][13] Financial Position - As of June 30, 2025, CoStar reported cash and cash equivalents of $3.62 billion, down from $3.68 billion as of March 31, 2025 [11] - Long-term debt remained stable at $992.5 million as of June 30, 2025 [11] - Cash generated by operating activities was $199.7 million in the reported quarter, a significant increase from $53.2 million in the previous quarter [11]

Group 1 - The core viewpoint is a positive outlook on CoStar Group (NASDAQ: CSGP) with a buy rating due to strong commercial revenue growth and robust engagement on Homes.com [1] - The company is expected to benefit from a long-term growth story, emphasizing the importance of fundamental analysis and identifying undervalued companies [1] - The investment strategy focuses on value investing principles, aiming to purchase quality companies at a discount to their intrinsic value for long-term holding [1]

Core Insights - CoStar Group reported $781.3 million in revenue for Q2 2025, a year-over-year increase of 15.3% and an EPS of $0.17, up from $0.15 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $771.67 million by 1.25%, while the EPS surpassed the consensus estimate of $0.14 by 21.43% [1] Revenue Breakdown - Total Revenues: $270.9 million, exceeding the estimated $267.89 million by analysts, representing a 7.1% increase year-over-year [4] - Information Services Revenues: $39.3 million, surpassing the estimated $36.74 million, reflecting a 17.7% year-over-year increase [4] - Other Marketplaces Revenues: $74.7 million, significantly higher than the estimated $50.2 million, marking a 139.4% year-over-year change [4] - LoopNet Revenues: $75.7 million, slightly above the estimated $74.65 million, with an 8.5% increase year-over-year [4] - Residential Revenues: $28.4 million, below the estimated $31.02 million, but still showing an 8.4% year-over-year increase [4] - Multifamily Revenues: $292.3 million, slightly below the estimated $293.26 million, with a 10.6% year-over-year increase [4] Stock Performance - CoStar's shares have returned +6.2% over the past month, outperforming the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1: Earnings Performance - CoStar Group reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, and up from $0.15 per share a year ago [1] - The earnings surprise for this quarter was +21.43%, following a previous surprise of +27.27% when earnings were $0.14 against an expected $0.11 [2] - Over the last four quarters, CoStar has consistently surpassed consensus EPS estimates [2] Group 2: Revenue Performance - The company posted revenues of $781.3 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.25%, and up from $677.8 million year-over-year [3] - CoStar has topped consensus revenue estimates three times over the last four quarters [3] Group 3: Stock Performance and Outlook - CoStar shares have increased approximately 18.8% since the beginning of the year, compared to a 7.2% gain in the S&P 500 [4] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $794.3 million, and for the current fiscal year, it is $0.76 on revenues of $3.13 billion [8] Group 4: Industry Context - The Computers - IT Services industry, to which CoStar belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges ahead [9] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact CoStar's stock performance [6]

Financial Data and Key Metrics Changes - CoStar Group achieved revenue of $781 million, a strong 15% increase compared to the previous year, marking the fifty-seventh consecutive quarter of double-digit revenue growth [6][7][58] - Adjusted EBITDA rose significantly to $85 million, representing an impressive 108% increase compared to Q2 of 2024 [7][59] - Net new bookings totaled $93 million, a remarkable 65% increase over the previous quarter and a 38% increase year over year, setting a new record for the highest quarterly net new bookings in CoStar Group's history [7][59][56] Business Line Data and Key Metrics Changes - Apartments.com revenue increased by 11% year over year, reaching $292 million, with net new bookings of $45 million, a 20% increase year over year [8][59] - Homes.com achieved residential annualized net new bookings of $12 million for the quarter, with revenue growing by 8% compared to Q2 of 2024 [17][59] - CoStar product revenue reached $271 million in Q2 2025, with a 7% year-over-year growth [34][59] Market Data and Key Metrics Changes - The commercial real estate (CRE) market continues to face challenges, particularly in the office segment, with high vacancy rates and negative net absorption rates [38] - Transaction volumes in the CRE market increased by 43% year over year, with office transaction volumes spiking 71% [38] - The UK residential marketplace saw a 14% year-over-year revenue growth in Q2 2025, with net new bookings up by 257% compared to the first half of the previous year [39] Company Strategy and Development Direction - CoStar is expanding its core sales team by 20% and tripling the homes.com sales force from 230 representatives in 2024 to about 750 by the end of 2025 [8] - The company is focusing on integrating Matterport's technology to enhance its marketplace offerings and improve profitability [51][52] - CoStar is in the final stages of acquiring Domain Holdings, which is expected to close in Q3 2025, positioning the company for further growth in the Australian market [32][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong competitive position, stating that they have not observed any loss of market share or pricing power [72][74] - The company anticipates continued growth in residential revenue, expecting a 20% increase in 2025 [61] - Management highlighted the significant total addressable market (TAM) in the industry, indicating that wallet share dynamics are less relevant due to the vast market size [74] Other Important Information - CoStar's cash balance as of June 30 was $3.7 billion, with a net interest income of $33 million in Q2 [65] - The company repurchased 585,000 shares for $45 million in Q2, with plans to repurchase at least $150 million of the $500 million authorized in 2025 [66] - The company is discontinuing certain non-core Matterport revenue that did not positively contribute to earnings, which is expected to impact Q3 revenue [64] Q&A Session Summary Question: Competitive dynamics in apartments.com - Management stated that they have not seen any loss of share or ability to capture price value at apartments.com, emphasizing strong product performance and high renewal rates [72][73] Question: Improvement in homes.com NPS scores - Management attributed the improvement to better communication of value propositions and the effectiveness of the sales force, noting that they are building a superior product offering [78][80] Question: Pricing strategies across different business segments - Management indicated that they are comfortable with current pricing strategies, focusing on penetration initially before maximizing average selling prices (ASP) [88]

Financial Data and Key Metrics Changes - CoStar Group achieved revenue of $781 million, a strong 15% increase compared to the previous year, marking the fifty-seventh consecutive quarter of double-digit revenue growth [6][55] - Adjusted EBITDA rose significantly to $85 million, representing an impressive 108% increase compared to Q2 2024, with a profit margin of 11% [6][56] - Net new bookings totaled $93 million, a remarkable 65% increase over the previous quarter and a 38% increase year over year, setting a new record for the highest quarterly net new bookings in CoStar Group's history [6][56] Business Line Data and Key Metrics Changes - Apartments.com reported revenue of $292 million, an 11% increase from Q2 2024, with net new bookings of $45 million, representing a 20% increase year over year [7][56] - Homes.com achieved residential annualized net new bookings of $12 million for the quarter, with revenue growing by 8% compared to Q2 2024 [17][56] - CoStar product revenue reached $271 million in Q2 2025, with a 7% year-over-year growth [32][56] Market Data and Key Metrics Changes - The UK residential marketplace saw a 20% year-over-year increase in inventory, reaching over 800,000 listings [29] - The commercial real estate market experienced a 43% year-over-year increase in transaction volumes, with office transaction volumes spiking 71% [36] - International businesses achieved 90% year-over-year growth in net new bookings in Q2 2025 compared to Q2 2024 [36] Company Strategy and Development Direction - CoStar is expanding its core sales team by 20% and tripling the homes.com sales force from 230 to about 750 by the end of 2025 to capture additional growth opportunities [7] - The company plans to integrate Matterport's capabilities more deeply into its platforms, shifting Matterport towards a business-to-business approach [49][52] - CoStar is in the final stages of acquiring Domain Holdings, which is expected to close in Q3 2025, enhancing its market position in Australia [30][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong competitive position of apartments.com, noting no loss of market share despite competitive pressures [68][69] - The company anticipates continued growth in residential revenue, expecting a 20% increase in 2025 [58] - Management highlighted the ongoing challenges in the commercial real estate market, particularly in the office segment, but noted positive trends in transaction volumes [36] Other Important Information - CoStar's cash balance as of June 30 was $3.7 billion, earning net interest income of $33 million in Q2 2025 [62] - The company repurchased 585,000 shares for $45 million in Q2, with plans to repurchase at least $150 million of the $500 million authorized in 2025 [63] - The company is revising its revenue guidance for 2025 to a range of $3.135 billion to $3.155 billion, implying an annual growth rate of 15% [64] Q&A Session Summary Question: Competitive dynamics in apartments.com - Management stated there has been no loss of share or ability to capture price value at apartments.com, emphasizing strong product performance and high renewal rates [68][69] Question: Improvement in homes.com NPS scores - Management attributed the improvement to a better product offering and effective communication of value propositions to clients, noting the learning curve for the sales force [73][76] Question: Pricing strategies across business segments - Management indicated that while the lender ASP is higher than standard broker owner ASP, they are focusing on penetration pricing for new products to build market share [82][84] Question: Contextualizing new member growth for homes.com - Management did not provide specific details on member growth but indicated strong momentum and improvements in NPS and bookings [86] Question: EBITDA guidance for the third quarter - Management clarified that the guidance reflects timing shifts and organic performance, with the majority of the delta attributed to timing [88]

[Q2 2025 Financial & Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20%26%20Operational%20Highlights) CoStar Group achieved its 57th consecutive quarter of double-digit revenue growth and record net new bookings, driven by strong performance in Apartments.com and Homes.com [Q2 2025 Financial Performance](index=1&type=section&id=Q2%202025%20Financial%20Performance) CoStar Group achieved its 57th consecutive quarter of double-digit revenue growth, with revenue increasing 15% to $781 million and Adjusted EBITDA rising 108% to $85 million Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $781M | $678M | +15% | | Net Income | $6M | $19M | -69% | | Net Income per Diluted Share | $0.01 | $0.05 | -80% | | Adjusted EBITDA | $85M | $41M | +108% | - The company achieved its **57th consecutive quarter** of double-digit revenue growth[2](index=2&type=chunk) - The company's commercial information and marketplace brands, excluding recent residential investments, realized a **43% profit margin** for Q2 2025[2](index=2&type=chunk)[4](index=4&type=chunk) [Operational Highlights & Management Commentary](index=1&type=section&id=Operational%20Highlights%20%26%20Management%20Commentary) The company achieved record quarterly net new bookings of $93 million, driven by strong performance from Apartments.com and Homes.com, which expanded its network to become the second largest in the U.S. residential market - Achieved all-time high quarterly net new bookings of **$93 million**, a **65% increase** from Q1 2025[1](index=1&type=chunk)[2](index=2&type=chunk) - Apartments.com delivered its highest net new bookings quarter in two years[2](index=2&type=chunk) - The Homes.com sales team added **6,300 new members**, a **56% increase** from the end of Q1 2025, with a demo-to-close rate exceeding **50%**[1](index=1&type=chunk)[2](index=2&type=chunk) - Launched 'Boost' on Homes.com, a digital marketing package, and sold over **1,200 units** to date[2](index=2&type=chunk) - The Homes.com Network reached **111 million average monthly unique visitors**, making it the second largest in the U.S. industry[2](index=2&type=chunk)[3](index=3&type=chunk) [2025 Financial Outlook](index=2&type=section&id=2025%20Financial%20Outlook) CoStar Group raised its full-year 2025 guidance for revenue and Adjusted EBITDA, while also providing strong Q3 2025 projections [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) CoStar Group raised its full-year 2025 revenue guidance to $3.135-$3.155 billion, representing 15% growth, and increased Adjusted EBITDA guidance to $370-$390 million Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $3.135B - $3.155B | | Adjusted EBITDA | $370M - $390M | | Non-GAAP Net Income per Diluted Share | $0.76 - $0.80 | - The updated revenue guidance represents approximately **15% year-over-year growth** at the midpoint[5](index=5&type=chunk) - The adjusted EBITDA guidance was increased by **$10 million** at the midpoint from previous guidance[6](index=6&type=chunk) [Q3 2025 Guidance](index=2&type=section&id=Q3%202025%20Guidance) For Q3 2025, the company projects revenue between $800 million and $805 million, indicating approximately 16% year-over-year growth, with Adjusted EBITDA expected to be $75-$85 million Q3 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $800M - $805M | | Adjusted EBITDA | $75M - $85M | | Non-GAAP Net Income per Diluted Share | $0.15 - $0.17 | - The Q3 revenue guidance represents approximately **16% year-over-year growth** at the midpoint[5](index=5&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) The financial statements reflect strong revenue growth, increased operating expenses, and significant investment in acquisitions, impacting cash and balance sheet structure [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, revenue increased to $781.3 million, but higher operating expenses resulted in a $27.2 million loss from operations and a net income of $6.2 million Statement of Operations Highlights (Three Months Ended June 30, in millions) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Revenues | $781.3 | $677.8 | | Gross Profit | $613.5 | $542.0 | | Loss from Operations | $(27.2) | $(16.1) | | Net Income | $6.2 | $19.2 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $10.51 billion, driven by Goodwill and Intangible assets, while cash and cash equivalents decreased to $3.63 billion Balance Sheet Highlights (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $3,628.6 | $4,681.0 | | Goodwill | $3,689.6 | $2,527.6 | | Total Assets | $10,507.1 | $9,256.8 | | Total Liabilities | $1,905.7 | $1,703.3 | | Total Stockholders' Equity | $8,601.4 | $7,553.5 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, operating cash flow was $199.7 million, while investing activities used $1.06 billion, primarily for acquisitions, leading to a $954.0 million net decrease in cash Cash Flow Highlights (Six Months Ended June 30, in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $199.7 | $197.7 | | Net cash used in investing activities | $(1,061.4) | $(477.6) | | Net cash used in financing activities | $(98.4) | $(15.3) | | Net decrease in cash | $(954.0) | $(296.4) | [Segment and Revenue Analysis](index=8&type=section&id=Segment%20and%20Revenue%20Analysis) The company experienced broad-based revenue growth across segments, with North America remaining dominant, while the International segment continues to improve its EBITDA [Disaggregated Revenues](index=8&type=section&id=Disaggregated%20Revenues) Q2 2025 revenue growth was broad-based, with Multifamily and CoStar as top contributors, "Other Revenues" more than doubling, and North America dominating geographic revenue Q2 Revenue by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | CoStar | $270.9 | $253.0 | +7.1% | | Multifamily | $292.3 | $264.2 | +10.6% | | LoopNet | $75.7 | $69.8 | +8.5% | | Other Revenues | $74.7 | $31.2 | +139.4% | Q2 Revenue by Geography (in millions) | Geography | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | North America | $744.0 | $643.8 | +15.6% | | International | $37.3 | $34.0 | +9.7% | [Segment EBITDA](index=8&type=section&id=Segment%20EBITDA) North America's EBITDA significantly improved to $43.3 million in Q2 2025, while the International segment reduced its loss to negative $14.7 million EBITDA by Segment (Three Months Ended June 30, in millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | North America | $43.3 | $30.8 | | International | $(14.7) | $(18.7) | | **Total EBITDA** | **$28.6** | **$12.1** | [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) The company provides reconciliations from GAAP Net Income to Non-GAAP Net Income, EBITDA, and Adjusted EBITDA, as well as for forward-looking guidance [Reconciliation of Net Income to Non-GAAP Net Income](index=4&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Non-GAAP%20Net%20Income) For Q2 2025, GAAP Net Income of $6.2 million was reconciled to a Non-GAAP Net Income of $73.6 million, or $0.17 per diluted share, after adjusting for non-cash items Q2 Reconciliation of GAAP to Non-GAAP Net Income (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $6.2 | $19.2 | | Amortization of acquired intangible assets | $43.6 | $18.1 | | Stock-based compensation expense | $51.8 | $22.7 | | **Non-GAAP net income** | **$73.6** | **$61.2** | [Reconciliation of Net Income to EBITDA and Adjusted EBITDA](index=5&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) From a GAAP Net Income of $6.2 million, the company reconciled to an EBITDA of $28.6 million and an Adjusted EBITDA of $85.0 million for Q2 2025, representing a 108% increase Q2 Reconciliation to EBITDA and Adjusted EBITDA (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $6.2 | $19.2 | | **EBITDA** | **$28.6** | **$12.1** | | Stock-based compensation expense | $51.8 | $22.7 | | Acquisition and integration related costs | $5.4 | $6.0 | | **Adjusted EBITDA** | **$85.0** | **$40.8** | [Reconciliation of Forward-Looking Guidance](index=11&type=section&id=Reconciliation%20of%20Forward-Looking%20Guidance) The company reconciles its full-year 2025 guidance, bridging projected GAAP Net Income of $37-$49 million to an Adjusted EBITDA of $370-$390 million through specific adjustments Full Year 2025 Guidance Reconciliation (Low End, in millions) | Line Item | Amount | | :--- | :--- | | Net income (loss) | $37.0 | | Amortization of acquired intangible assets | $156.0 | | Depreciation and other amortization | $54.0 | | Interest income, net | $(133.0) | | Stock-based compensation expense | $177.0 | | **Adjusted EBITDA** | **$370.0** |

Core Insights - CoStar Group (CSGP) is expected to report second-quarter 2025 earnings on July 22, with projected revenues between $770 million and $775 million, indicating a year-over-year growth of 14% at the midpoint of the range [1][11] - The Zacks Consensus Estimate for revenues is currently at $771.67 million, suggesting a growth of 13.85% from the previous year's quarter [2] Revenue Growth Drivers - CoStar Group's second-quarter performance is likely to benefit from its strong portfolio of marketplaces, including Apartments.com, LoopNet, and Homes.com [4] - Apartments.com is projected to grow by 10% in Q2 2025, driven by increased traffic and higher advertising spending [4][11] - Homes.com has reached 104 million average monthly unique visitors in Q1 2025, contributing to overall traffic of 130 million unique visitors across CoStar Group sites [5] Segment Performance - LoopNet's revenue growth rate is anticipated to be 7% in the second quarter, supported by a revamped sales strategy focusing on broad subscription packages [6] - The Homes.com segment is expected to experience low single-digit revenue growth due to the impact of first-quarter cancellations [7] Acquisition Impact - CoStar Group's acquisition of Matterport is expected to enhance its real estate marketplaces by integrating 3D capture technology, contributing approximately $40 million to second-quarter revenues [8][9][11] Earnings Expectations - CoStar Group has an Earnings ESP of 0.00% and a Zacks Rank 3, indicating that the odds of an earnings beat are not favorable [12]

Core Insights - CoStar Group (CSGP) is expected to report quarterly earnings of $0.14 per share, a decline of 6.7% year-over-year, with revenues forecasted at $771.67 million, reflecting a 13.8% increase compared to the same period last year [1] Earnings Estimates - The consensus EPS estimate for the quarter has not changed over the past 30 days, indicating that analysts have maintained their initial projections [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock price performance [3] Revenue Projections - The consensus estimate for CoStar's total revenues is $267.89 million, indicating a year-over-year change of +5.9% [5] - Analysts project 'Revenues- Information Services' to reach $36.74 million, reflecting a +10% change from the prior-year quarter [5] - 'Revenues- Other Marketplaces' are expected to be $50.20 million, showing a significant increase of +60.9% year-over-year [5] - 'Revenues- LoopNet' is forecasted at $74.65 million, indicating a +6.9% change [6] - 'Revenues- Residential' is expected to be $31.02 million, reflecting an +18.4% increase [6] - The average prediction for 'Revenues- Multifamily' stands at $293.26 million, indicating an +11% change from the prior-year quarter [6] Stock Performance - CoStar shares have increased by +7% in the past month, outperforming the Zacks S&P 500 composite, which has risen by +4.2% [6] - CoStar holds a Zacks Rank 3 (Hold), suggesting it is expected to closely follow overall market performance in the near term [6]