Revenue Performance - CoStar Group's subscription-based services generated approximately 92% of total revenues for the three months ended September 30, 2025, down from 96% in the same period of 2024[189]. - Total revenues increased by $141 million, or 20%, to $833.6 million for the three months ended September 30, 2025, compared to $692.6 million in the same period of 2024[205]. - Total revenues increased by $320 million, or 16%, to $2.3 billion, driven by a 110% increase in Other Revenues due to the Matterport Acquisition[216]. - North America revenues increased by $285 million, or 15%, to $2.2 billion, with a 35% increase in International revenues attributed to the Domain Acquisition[222]. Subscription Services - Annualized net new bookings of subscription-based services increased to $84 million for the three months ended September 30, 2025, compared to $44 million for the same period in 2024[189]. - Contract renewal rates for existing subscription-based services remained stable at approximately 89% for both the trailing 12 months ended September 30, 2025, and 2024[190]. Revenue Growth Drivers - Information Services revenue growth rate increased for the nine months ended September 30, 2025, primarily due to the Visual Lease Acquisition[183]. - Multifamily revenue growth rate moderated for the nine months ended September 30, 2025, due to the impact of pivoting the Apartments.com sales force to support Homes.com[184]. - LoopNet's revenue growth rate increased for the nine months ended September 30, 2025, driven by higher average revenue per listing and an increase in the number of listings[185]. - Residential revenues increased for the nine months ended September 30, 2025, primarily due to the Domain Acquisition and an increase in Homes.com memberships[186]. - Other revenues increased for the nine months ended September 30, 2025, primarily due to the Matterport Acquisition[187]. Profitability and Expenses - Gross profit increased by $109.4 million, or 20%, to $661.4 million, while the gross profit margin decreased from 80% to 79%[206]. - Selling and marketing expenses rose by $87.1 million, or 26%, to $418.3 million, increasing as a percentage of revenues from 48% to 50%[206]. - General and administrative expenses increased by $51.2 million, or 48%, to $157 million, with the percentage of revenues rising from 15% to 19%[206]. - Customer base amortization expense surged by $21.5 million, or 209%, to $31.8 million, increasing from 1% to 4% of revenues[206]. Net Income and Loss - The company reported a net loss of $30.9 million for the three months ended September 30, 2025, compared to a net income of $53 million in the same period of 2024[205]. - The company reported a net loss of $39.5 million for the nine months ended September 30, 2025, compared to a net income of $78.9 million in the same period of 2024[216]. Cash Flow and Investments - Cash, cash equivalents, and restricted cash totaled $2.0 billion as of September 30, 2025, sufficient to meet cash requirements over the next 12 months[224]. - Cash, cash equivalents, and restricted cash decreased to $2.0 billion as of September 30, 2025, down from $4.7 billion as of December 31, 2024, primarily due to $2.7 billion net cash used in investing activities[231]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $268 million, a decrease of $30 million compared to the same period in 2024[232]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $2.7 billion, significantly higher than $563 million for the same period in 2024, driven by acquisitions[233]. - Net cash used in financing activities for the nine months ended September 30, 2025, was $162 million, compared to $14 million for the same period in 2024, primarily due to stock repurchases[234]. Future Plans and Investments - CoStar Group plans to continue investing in Homes.com and develop AI-enabled search technology to enhance user experience and attract recurring visitors[192]. - The company is expanding its Richmond, Virginia campus, with an expected cash requirement of $188 million as of September 30, 2025, and plans to spend $73 million of this amount in the remainder of 2025[227]. - The estimated value of tax incentives related to the campus expansion is projected to be between $275 million and $285 million for tax years 2023 to 2032, contingent upon meeting job creation and capital expenditure targets[228]. - The Board of Directors approved a Stock Repurchase Program allowing for the repurchase of up to $500 million of the company's shares, with $385 million remaining available for repurchases as of September 30, 2025[229][230]. Foreign Currency Impact - Approximately 9% of the company's revenues for the three and nine months ended September 30, 2025, were denominated in foreign currencies, with potential revenue impacts of $8 million and $16 million from a 10% change in exchange rates[245]. Goodwill and Intangible Assets - The company had approximately $6.8 billion of goodwill and intangible assets as of September 30, 2025, with ongoing monitoring for potential impairment[248].

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]

Core Insights - The U.S. office market outlook has been slightly upgraded according to CoStar's revised forecast [1] - The near-term projection indicates a positive absorption of 10 million square feet over the next four quarters, contrasting with the previous forecast of a negative absorption of 4 million square feet [1] Summary by Category - **Market Performance** - The third quarter of 2025 is expected to show a performance shift in the U.S. office market [1] - The revised forecast reflects a more optimistic view of the office space demand [1] - **Forecast Changes** - The new forecast anticipates a total of 10 million square feet of positive absorption, an upgrade from the earlier prediction of negative absorption [1]

Core Insights - CoStar, a commercial real estate data and analytics firm, raised its annual revenue forecast and exceeded third-quarter estimates due to increased bookings and growth in its subscription base [1] Financial Performance - The company reported higher bookings which contributed to its revenue growth [1] - CoStar's third-quarter performance surpassed market expectations, indicating strong demand for its services [1] Subscription Growth - Growth across CoStar's subscription base was a significant factor in its improved financial outlook [1]

Core Insights - CoStar Group (CSGP) reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and showing an increase from $0.22 per share a year ago [1] - The company achieved a revenue of $833.6 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.91% and up from $692.6 million year-over-year [3] Earnings Performance - The quarterly earnings surprise was +27.78%, following a previous surprise of +21.43% when earnings were $0.17 per share against an expectation of $0.14 [2] - CoStar has consistently surpassed consensus EPS estimates for the last four quarters [2] Revenue Insights - The company has also exceeded consensus revenue estimates in each of the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $0.31, with expected revenues of $893.27 million, and for the current fiscal year, the estimate is $0.84 on $3.23 billion in revenues [8] Market Performance - CoStar shares have increased by approximately 9.1% since the beginning of the year, while the S&P 500 has gained 16.9% [4] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [7] Industry Context - The Computers - IT Services industry, to which CoStar belongs, is currently ranked in the top 18% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [9]

Financial Data and Key Metrics Changes - CoStar Group reported Q3 2025 revenue of $834 million, a 20% year-over-year increase, marking the 58th consecutive quarter of double-digit revenue growth [4][51] - Adjusted EBITDA rose to $115 million, up 51% over Q3 2024, with a profit margin of 47% in commercial information and marketplace businesses [4][51] - Net new bookings totaled $84 million, reflecting a 92% year-over-year increase [4][51] Business Line Data and Key Metrics Changes - Residential portals, including Apartments.com, Homes.com, OnTheMarket, and Domain, generated $411 million in revenue for the quarter, with a 31.3% year-over-year growth [5][6] - Apartments.com revenue reached $303 million in Q3, an 11% increase year-over-year, with a 99% monthly renewal rate [6][7] - Homes.com saw annualized net new bookings rise to $16 million, a 53% quarter-over-quarter increase, and a 1,225% year-over-year increase [8][9] Market Data and Key Metrics Changes - Homes.com achieved 115 million unique monthly visitors in Q3, with organic traffic increasing by 87% year-over-year [14] - The UK residential marketplace OnTheMarket reported a 21% year-over-year increase in leads [33] - CoStar's European business reached record net new bookings of $5.7 million in Q3 2025, representing a 51% year-over-year growth [49] Company Strategy and Development Direction - The company aims to enhance its market share by increasing the reliance of real estate agents and homeowners on its platforms for exposure [13] - CoStar Group is focusing on integrating AI technologies into its products, particularly Homes.com, to improve user engagement and search capabilities [17][20] - The acquisition of Domain is expected to expand market share in Australia, leveraging CoStar's technology and resources [34][37] Management's Comments on Operating Environment and Future Outlook - Management highlighted the competitive challenges faced by Zillow, including multiple lawsuits that could impact its business model [27][28] - The company anticipates continued strong performance in Q4 2025, with revenue growth expected to remain robust across its product lines [51][54] - Management expressed confidence in the long-term growth potential of its residential and commercial marketplaces, particularly with the integration of Matterport technology [40][47] Other Important Information - CoStar Group's cash balance as of September 30 was $2 billion, with a net interest income of $26 million for Q3 [56] - The company repurchased 576,000 shares for $51 million in Q3, with plans for additional repurchases in Q4 [56] - The integration of Matterport is expected to unlock significant value across CoStar's product offerings [40] Q&A Session Summary Question: Inquiry about seasonal behaviors in bookings - Management noted that Apartments.com typically experiences seasonality due to the NAA event, but current sales trends for Homes.com show a linear progression without significant seasonality [59][61] Question: Follow-up on residential side seasonality - Management confirmed that while some seasonality may occur around year-end holidays, the current sales line for Homes.com remains smooth and linear [61]

Financial Data and Key Metrics Changes - CoStar Group reported Q3 2025 revenue of $834 million, a 20% year-over-year increase, marking the 58th consecutive quarter of double-digit revenue growth [4][52] - Adjusted EBITDA for Q3 rose to $115 million, up 51% from Q3 2024, with a profit margin of 47% in commercial information and marketplace businesses [4][52] - Net new bookings totaled $84 million, representing a 92% year-over-year increase [4][52] Business Line Data and Key Metrics Changes - Revenue from residential real estate portals reached $411 million in Q3, with a 22.7% quarter-over-quarter and 31.3% year-over-year growth [5][6] - Apartments.com generated $303 million in Q3 revenue, an 11% increase year-over-year, with a 99% monthly renewal rate [6][7] - LoopNet achieved 10% revenue growth in Q3, with expectations for low double-digit growth next year [44][55] Market Data and Key Metrics Changes - Homes.com rental traffic grew 55% year-over-year, with annualized net new bookings rising to $16 million, a 53% quarter-over-quarter increase [8][10] - The U.K. marketplace OnTheMarket saw leads up 21% year-over-year in Q3 2025, with significant ROI delivered to its 16,000 subscribing customers [33] - Domain's residential marketplace generated over 50% direct contribution margin, with a 24% year-over-year increase in audience metrics [35][36] Company Strategy and Development Direction - The company aims to enhance its AI capabilities, particularly with the launch of AI Smart Search on Homes.com, which is expected to improve user engagement significantly [18][19] - CoStar Group plans to leverage its proprietary data resources and expertise to capitalize on the opportunities presented by generative AI in the real estate sector [20][24] - The acquisition of Domain is expected to expand market share in Australia, with plans to integrate Homes.com, CoStar, and LoopNet platforms [35][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of the residential portals and the potential for long-term margins exceeding 40% adjusted EBITDA [6][7] - The company anticipates strong performance in Q4 2025, with revenue expectations of $885 million to $895 million, driven by the Domain acquisition [59] - Management highlighted the legal challenges facing Zillow, predicting that these could significantly impact Zillow's operations and market position [27][29] Other Important Information - CoStar's cash balance as of September 30 was $2 billion, with a net interest income of $26 million in Q3 [58] - The company repurchased 576,000 shares for $51 million in Q3, with plans for an additional $50 million in share repurchases in Q4 [58] Q&A Session Summary Question: Inquiry about seasonal behaviors in bookings - Management noted that Apartments.com typically experiences seasonality, particularly around the NAA event, but current sales trends for Homes.com show a linear progression without significant seasonality [61][62] Question: Follow-up on seasonal trends - Management confirmed that while some seasonality may occur during year-end holidays, the current sales line for Homes.com remains smooth, indicating strong performance [63]

Financial Data and Key Metrics Changes - CoStar Group reported Q3 2025 revenue of $834 million, a 20% year-over-year increase, marking the 58th consecutive quarter of double-digit revenue growth [4][52] - Adjusted EBITDA rose to $115 million, up 51% from Q3 2024, with a profit margin of 47% in commercial information and marketplace businesses [4][52] - Net new bookings totaled $84 million, representing a 92% year-over-year increase [4][52] Business Line Data and Key Metrics Changes - Revenue from residential real estate portals reached $411 million in Q3, with a 22.7% quarter-over-quarter and 31.3% year-over-year growth [4][5] - Apartments.com generated $303 million in Q3 revenue, an 11% increase year-over-year, with a 99% monthly renewal rate and a 93 NPS score [5][6] - Homes.com saw annualized net new bookings rise to $16 million, up 53% quarter-over-quarter, and revenue increased by 20% year-over-year [8][10] Market Data and Key Metrics Changes - Homes.com achieved 115 million unique monthly visitors in Q3, with total visits increasing to 560 million, up 7% compared to Q2 [14][15] - CoStar's lender business closed $4.3 million in annual net new bookings, with nearly $100 million in revenue [43] - The UK business reported record net new bookings, up 125% year-over-year, with revenue growth of 17% [50] Company Strategy and Development Direction - The company aims to leverage AI technologies to enhance user engagement and improve search functionalities on Homes.com [18][19] - CoStar Group plans to expand its presence in Australia through the acquisition of Domain, focusing on integrating its platforms and improving profitability [34][38] - The strategy includes enhancing Matterport's integration into its marketplaces to unlock additional revenue opportunities [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth trajectory, with expectations for Q4 revenue growth between 15% to 17% for LoopNet and 11% to 12% for Apartments.com [54][55] - The company anticipates that the ongoing legal challenges faced by Zillow could create competitive advantages for CoStar Group [26][29] - Management highlighted the importance of maintaining expense discipline while pursuing growth opportunities across various segments [52][56] Other Important Information - CoStar Group's balance sheet included $2 billion in cash, with a net interest income of $26 million in Q3 [58] - The company repurchased 576,000 shares for $51 million in Q3, with plans for additional repurchases in Q4 [58] - The acquisition of Domain contributed $25 million in revenue for the stub period from August 28 to September 30 [58] Q&A Session Summary Question: Can you point out any seasonal behaviors noticed in bookings, especially on the residential side? - Management noted that Apartments.com typically experiences seasonality, particularly around the NAA event, but current sales trends for Homes.com are linear with minimal seasonality observed [61][62] Question: Can you provide more detail on sequential booking trends in the third quarter? - Management indicated that bookings for core businesses like Apartments.com and LoopNet are expected to continue their upward trajectory into Q4, supported by a larger sales force and improved productivity [64]

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2025 Investor Presentation Legal Disclaimer This presentation of CoStar Group, Inc. ("CoStar Group" or the "Company") contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about CoStar Group's plans, objectives, expectations, beliefs and intentions and other statements including words such as "hope," "anticipate," "may," "likely," "might," "believe," "expect," "observe," "consider," "think ...