CoStar Group(CSGP) - 2025 Q2 - Quarterly Results

Q2 2025 Financial & Operational Highlights 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 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] - The company's commercial information and marketplace brands, excluding recent residential investments, realized a 43% profit margin for Q2 2025[2][4] Operational Highlights & Management Commentary 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][2] - Apartments.com delivered its highest net new bookings quarter in two years[2] - 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][2] - Launched 'Boost' on Homes.com, a digital marketing package, and sold over 1,200 units to date[2] - The Homes.com Network reached 111 million average monthly unique visitors, making it the second largest in the U.S. industry[2][3] 2025 Financial Outlook CoStar Group raised its full-year 2025 guidance for revenue and Adjusted EBITDA, while also providing strong Q3 2025 projections Full Year 2025 Guidance 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] - The adjusted EBITDA guidance was increased by $10 million at the midpoint from previous guidance[6] Q3 2025 Guidance 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] Financial Statements 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 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 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 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 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 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 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 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 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 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 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 |