CoStar Q3 Earnings Beat Estimates, Revenues Up Y/Y, Shares Fall

Core Insights - CoStar Group (CSGP) reported non-GAAP earnings of 23 cents per share in Q3 2025, exceeding the Zacks Consensus Estimate by 27.78% and marking a 4.5% increase from 22 cents per share in the same quarter last year [1][8] Revenue Performance - Revenues reached $833.6 million, surpassing the Zacks Consensus Estimate by 0.91% and reflecting a 20.4% year-over-year growth, marking the 58th consecutive quarter of double-digit revenue growth [2][8] - Specific revenue contributions included: - CoStar's revenues of $277 million, beating estimates by 0.77% and increasing 7.8% year over year [3] - Information Services revenues of $41.3 million, exceeding estimates by 4.29% and growing 25.2% year over year [3] - Multifamily revenues of $303 million, missing estimates by 0.73% but increasing 11.5% year over year [3] - LoopNet revenues of $79.3 million, beating estimates by 0.76% and increasing 11.8% year over year [4] - Residential revenues of $54.9 million, surpassing estimates by 74.29% and growing 98.2% year over year [4] - Other marketplace revenues of $78.1 million, exceeding estimates by 4.13% and increasing 141.8% year over year [4] Operational Metrics - Net New Bookings reached $84 million, representing a 92% increase year over year [5] - Average monthly unique visitors to CoStar's sites reached 143 million, while Homes.com Network achieved 115 million [5] Expense Overview - Selling and marketing expenses increased 26.3% year over year to $418.3 million, accounting for 50.2% of revenues compared to 47.8% in the previous year [6] - General and administrative expenses rose to 18.8% of revenues, an increase of 360 basis points year over year [6] - Operating expenses increased 34.9% year over year to $712.5 million, representing 85.5% of revenues, an increase of 920 basis points [7] Profitability Metrics - Adjusted EBITDA was $114.6 million, up from $75.9 million in the previous year, with an adjusted EBITDA margin expanding 280 basis points to 13.7% [9] Guidance - For Q4 2025, the company expects revenues between $885 million and $895 million, indicating 25% growth at the midpoint, and anticipates adjusted EBITDA between $150 million and $160 million [11] - For the full year 2025, revenues are expected to be between $3.23 billion and $3.24 billion, indicating 18% year-over-year growth at the midpoint, with adjusted EBITDA anticipated between $415 million and $425 million [12]