Will CoStar's Earnings & Revenue Beat in Q2 Drive the Stock Price?

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]