Core Insights - Google is entering the home listings market, potentially increasing competition for Zillow and other real estate platforms [1][4] - Shares of Zillow Group fell over 10% following the news, indicating market concern about Google's new home ad features [1][2] - Other companies in the home listing sector, such as CoStar and Rocket Companies, also experienced stock declines [2][3] Company Impact - Zillow's stock is down approximately 8% year-to-date, while CoStar has lost about 12% and Rocket Companies has seen a decline of over 60% in 2025 [3] - Goldman Sachs analysts believe that while there may not be an immediate impact on Zillow's business, the long-term risk from Google's new product is significant for real estate portals [3] Market Reaction - The introduction of Google's home ad features has raised concerns among investors, leading to a notable drop in stock prices for Zillow and its competitors [2][4] - Alphabet's shares remained relatively stable despite the market turmoil affecting other companies [2]

Core Viewpoint - Shares in British real estate portal Rightmove experienced a significant decline of up to 28% following the company's warning of slower profit growth in the upcoming years, attributed to increased investments in artificial intelligence [1] Company Summary - Rightmove's stock price fell sharply due to concerns over future profitability, indicating potential challenges in maintaining growth amidst rising operational costs related to technology investments [1] - The company is focusing on accelerated investments in artificial intelligence, which may impact short-term financial performance but could be aimed at long-term strategic positioning [1]

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]