Will CoStar's Earnings & Revenue Beat in Q4 Drive the Stock Price?

Core Insights - CoStar Group (CSGP) reported non-GAAP earnings of 26 cents per share for Q4 2024, exceeding the Zacks Consensus Estimate by 18.18%, but down 21.2% from 33 cents in the same quarter last year [1] - Revenues reached $709.4 million, surpassing the Zacks Consensus Estimate by 1.20% and reflecting a year-over-year increase of 10.8%, marking the 55th consecutive quarter of double-digit revenue growth [2] - Despite strong performance in digital platforms, CSGP shares fell 4.25% in after-hours trading due to concerns over rising expenses [2][3] Revenue Breakdown - CoStar's revenues from its primary segment amounted to $260.3 million, missing the consensus estimate by 0.15% but increasing 9.5% year over year [4] - Apartments.com saw a revenue increase of 17% year over year, with net new bookings of $53 million, up 21% sequentially [4] - Multifamily revenues totaled $276.5 million, missing estimates by 0.29% but up 13.4% year over year [5] - LoopNet's revenues of $71.9 million exceeded estimates by 0.26% and increased 5% year over year [5] - Residential revenues reached $28.1 million, missing estimates by 1.40% but showing a significant year-over-year increase of 181% [5] - Homes.com became the second-largest residential real estate marketplace in the U.S., attracting 110 million unique monthly visitors, an 11% year-over-year increase [6] Operating Expenses - Selling and marketing expenses rose 25.1% year over year to $308.5 million, accounting for 43.5% of revenues compared to 38.5% in the previous year [7] - General and administrative expenses increased to 16.6% of revenues, up 90 basis points year over year [7] - Total operating expenses increased 21.6% year over year to $528.5 million, representing 74.5% of revenues, an increase of 660 basis points [9] Financial Position - As of December 31, CoStar reported cash and cash equivalents of $4.68 billion, down from $4.93 billion as of September 30 [10] - Long-term debt remained relatively stable at $991.9 million as of December 31 [10] - Cash generated by operating activities was $392.6 million in the reported quarter, up from $298 million in the previous quarter [10] Guidance - For Q1 2025, CoStar expects revenues between $711 million and $716 million, indicating a year-over-year growth of 9% at the mid-point [11] - For the full year 2025, revenues are projected between $2.99 billion and $3.02 billion, reflecting a year-over-year growth of 10% at the mid-point [11] - Adjusted EBITDA for Q1 2025 is anticipated to be between $25 million and $35 million, with a full-year expectation of $375 million to $405 million for 2025 [12]