CoStar Group (CSGP) Q2 2025 Earnings Call July 22, 2025 05:00 PM ET Speaker0Thank you for standing by and welcome to the CoStar Group's Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. Today, we'd like to ask that you please limit yourself to one question and no multi part questions. As a reminder, today's program is being recorded.And now I'd like to introduce yo ...

Financial Data and Key Metrics Changes - Q1 2025 revenue was $732 million, a 12% increase year over year, marking the 56th consecutive quarter of double-digit revenue growth [4][5] - Adjusted EBITDA for Q1 2025 was $66 million, representing a 429% increase over Q1 2024, with a profit margin of 43% in commercial real estate and information marketplace businesses [5][63] - Company net new bookings were $56 million in Q1 2025, up 6% sequentially from Q4 2024 [5][70] - The company reported a net loss of $15 million primarily due to one-time costs from the Matterport acquisition [69] Business Line Data and Key Metrics Changes - CoStar revenue grew 6% year over year, with net new bookings at their highest level since Q3 2023 [6][64] - Apartments.com revenue increased by 11% year over year, with a significant rise in quality interactions and new community additions [18][65] - LoopNet revenue grew 5% in Q1 2025, with expectations for revenue growth to accelerate throughout the year [66] - STR's integration into CoStar contributed to its best quarter ever for net new bookings, up 17% year over year [6] Market Data and Key Metrics Changes - The commercial real estate environment remains challenging, with historic high vacancy rates around 16% and real asking rents at a 30-year low [8][9] - In retail, real asking rents are at ten-year lows, but signs of improvement are emerging as vacancy rates begin to fall [10] - The international business achieved over $5 million in annual recurring revenue (ARR) in Q1 2025, representing 56% year-over-year growth [5] Company Strategy and Development Direction - The company is focused on enhancing its product offerings and integrating various brands to create a comprehensive solution for clients [13][14] - A new marketing strategy for LoopNet aims to increase the number of paid properties on the platform, enhancing consumer choice [12] - The company plans to expand its sales force by 23% in 2025 to capitalize on market opportunities, particularly in the multifamily sector [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to double-digit growth as market conditions improve over the next few years [11] - The company anticipates slight headwinds from government contract cancellations but expects revenue growth to remain stable [64][72] - The integration of Matterport is expected to enhance the company's offerings and drive future growth [63][68] Other Important Information - The company repurchased 240,000 shares for $18.5 million and plans to repurchase a total of $150 million in shares in 2025 [71] - The company is in the process of acquiring Domain Group, which could significantly enhance its market position in Australia [71][54] Q&A Session Summary Question: Comments on the delayed market listing exemption and Zillow's reaction - Management noted overwhelmingly negative feedback from agents regarding Zillow's actions, indicating a potential opportunity for the company [76][77] Question: Nonresidential EBITDA margin in Q1 and outlook for residential spending - The commercial margin was reported at 43% for Q1, with no changes to the residential spending outlook [78][79] Question: Integration and monetization of Matterport - Management discussed plans for integrating Matterport into the CoStar platform and its potential for monetization [82]