Core Insights - CoStar Group reported a strong Q4 2025 earnings performance, with non-GAAP earnings of 31 cents per share, exceeding estimates by 13.76% and showing a 19.2% increase year-over-year [2] - Revenues reached $900 million, surpassing estimates by 1% and reflecting a 26.9% year-over-year growth, marking the 59th consecutive quarter of double-digit revenue growth [3] Financial Performance - The Commercial Real Estate segment generated $471 million, accounting for 52.3% of total revenues, while CoStar's own revenues were $325 million, up 9.4% year-over-year [4] - LoopNet's revenues increased by 16.7% year-over-year to $84 million, and Other Commercial Real Estate revenues surged by 181.8% to $62 million [5] - Residential revenues reached $429 million, a 34.9% increase year-over-year [5] - Net New Bookings for Q4 2025 were $75 million, a 41.5% increase year-over-year, with total Net New Bookings for 2025 at $308 million, up 23.2% [6] Operating Expenses - Selling and marketing expenses rose by 22.3% year-over-year to $378 million, constituting 42% of revenues, down from 43.6% in the previous year [7] - Operating expenses increased by 24.4% year-over-year to $658 million, but as a percentage of revenues, they decreased to 73.1% [8] - Adjusted EBITDA was $177 million, up from $112 million year-over-year, with an adjusted EBITDA margin expansion of 390 basis points to 19.7% [9] Balance Sheet and Cash Flow - Cash and cash equivalents stood at $1.63 billion as of December 31, 2025, down from $1.93 billion as of September 30, 2025 [10] - Long-term debt was reported at $993 million, slightly up from $992.9 million [10] - Cash generated from operating activities was $430 million in the reported quarter, compared to $267.9 million in the previous quarter [10] Share Repurchase and Guidance - The company completed a $500 million share repurchase program initiated in 2025 [11] - For Q1 2026, CoStar expects revenues between $890 million and $900 million, indicating a year-over-year growth of 22% to 23% [12] - For the full year 2026, revenues are projected to be between $3.78 billion and $3.82 billion, reflecting a year-over-year growth of 16% to 18% [13] Market Sentiment and Estimates - There has been a downward trend in estimates, with the consensus estimate shifting down by 42.34% [14] - CoStar currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [16] Industry Comparison - CoStar is part of the Zacks Computers - IT Services industry, where Vertiv Holdings Co. reported a year-over-year revenue increase of 22.7% to $2.88 billion [18] - Vertiv's expected earnings for the current quarter indicate a change of +56.3% from the year-ago quarter, with a Zacks Rank 2 (Buy) [19]

Core Insights - CoStar Group has appointed Nana Banerjee as a new independent member of its Board of Directors, expanding the Board to nine directors, with eight being independent [1][3] - Banerjee brings over 20 years of experience in leading technology and data-driven businesses, including his recent role as President and CEO of Pelmorex Corp., where he focused on AI-native offerings [2][3] - The appointment aims to enhance the Board's expertise in data analytics and AI, aligning with CoStar Group's long-term growth strategy and commitment to creating stockholder value [3] Company Overview - CoStar Group, Inc. is a global leader in commercial real estate information, analytics, online marketplaces, and 3D digital twin technology, founded in 1986 [4] - The company operates major brands such as CoStar, LoopNet, Apartments.com, and Matterport, serving a wide range of clients in the real estate sector [5][6] - CoStar Group's websites attracted over 139 million average monthly unique visitors in Q4 2025, indicating strong market engagement [6]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 rose 27% year-over-year to $900 million, an increase of $191 million from $709 million in Q4 2024 [8] - Full year 2025 revenue was $3.2 billion, up 19% from $2.7 billion in 2024, marking the 59th consecutive quarter of double-digit revenue growth [8] - Adjusted EBITDA for 2025 was $442 million, up 83% from $241 million in 2024, positioning the company well for 2026 guidance of $740 million-$800 million [8] Business Line Data and Key Metrics Changes - The commercial segment generated $1.79 billion in revenue for 2025, an 18% year-over-year increase [56] - The residential segment totaled $1.46 billion in revenue, a 20% increase year-over-year, with Homes.com delivering a 63% growth rate [57][59] - CoStar revenues grew 10% year-over-year, generating $325 million in Q4 2025 [11] Market Data and Key Metrics Changes - The U.S. commercial real estate market is recovering, with commercial sales volumes climbing 30% year-over-year [10] - The residential business achieved a record of 642,000 paid single-family rental listings in 2025, up 49% over the prior year [46] - Homes.com network had over 2.1 billion views and 100 million average monthly unique visitors in 2025 [33] Company Strategy and Development Direction - The company is focused on expanding its product offerings and integrating AI into its services, including the launch of Homes AI [40][51] - Plans to launch CoStar for Australia in late 2026 and expand LoopNet coverage into new markets [12][22] - The company aims to achieve profitability for its residential business by 2026, with a long-term revenue target of $4.75 billion for Homes.com [37][39] Management's Comments on Operating Environment and Future Outlook - Management noted that the CRE economy is shifting from headwind to tailwind, with improved leasing fundamentals and declining vacancies [10] - The company expects adjusted EBITDA margins to increase by roughly five percentage points each quarter throughout 2026 [66] - Management expressed confidence in the growth potential of Homes.com and its strategic importance to the overall business [45] Other Important Information - The company completed a $500 million share buyback program in 2025 and announced a new $1.5 billion share repurchase program [64] - The sales force increased to 2,175 people, with a focus on growing the LoopNet and Matterport teams in 2026 [63] - The company is integrating Domain's residential platform into Homes.com to improve margins and eliminate duplicative efforts [49] Q&A Session Summary Question: What are the expectations for revenue growth in 2026? - The company expects revenue of $3.78 billion-$3.82 billion in 2026, implying an annual growth rate of 16%-18% [65] Question: How is the company addressing the competitive landscape? - Management highlighted the unique business model of Homes.com compared to competitors, focusing on marketing valuable homes rather than selling lower-value leads [39] Question: What are the plans for AI integration in products? - The company plans to deploy Homes AI across multiple platforms, enhancing user engagement and driving growth [43][51]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 rose 27% year-over-year to $900 million, an increase of $191 million from $709 million in Q4 2024 [8] - Full year 2025 revenue was $3.2 billion, up 19% from $2.7 billion in 2024, marking the 59th consecutive quarter of double-digit revenue growth [8] - Adjusted EBITDA for 2025 was $442 million, up 83% from $241 million in 2024, positioning the company well for 2026 guidance of $740 million-$800 million [8] Business Line Data and Key Metrics Changes - The commercial business grew 20% year-over-year, generating $471 million in revenue for Q4 2025, and reached $1.79 billion for the full year, an 18% increase [9][56] - CoStar revenues grew 10% year-over-year, generating $325 million in Q4 2025, with a 94% quarterly renewal rate [11][60] - Residential revenue was $429 million in Q4 2025, up 35% year-over-year, and $1.46 billion for the full year, a 20% increase [26][57] Market Data and Key Metrics Changes - The U.S. commercial real estate market is recovering, with positive absorption of office space and decreasing vacancies [10] - The residential business achieved a record of 642,000 paid single-family rental listings in 2025, up 49% over the prior year [46] - Homes.com network had over 2.1 billion views and 100 million average monthly unique visitors in 2025, with organic traffic increasing 134% year-over-year [33] Company Strategy and Development Direction - The company is focused on expanding its product offerings and leveraging AI to enhance its services, including the launch of Homes AI [40][51] - Plans to integrate various platforms, such as Domain and OnTheMarket, into Homes.com to improve margins and operational efficiency [48][49] - The company aims to achieve profitability in its residential business by 2026, with a long-term revenue target of $4.75 billion for Homes.com [37][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the commercial real estate market and the potential for significant EBITDA expansion [8][10] - The company anticipates continued growth in 2026, with revenue guidance of $3.78 billion-$3.82 billion, reflecting an annual growth rate of 16%-18% [65] - Management highlighted the importance of AI in driving future growth and competitive advantage [51][54] Other Important Information - The company completed a $500 million share buyback program in 2025 and announced a new $1.5 billion share repurchase program [64] - The sales force increased to 2,175 people, with plans for further growth in 2026, particularly in the LoopNet and Matterport teams [63] Q&A Session Summary Question: What are the expectations for revenue growth in 2026? - The company expects revenue to range from $3.78 billion to $3.82 billion, implying an annual growth rate of 16%-18% [65] Question: How is the integration of Domain and OnTheMarket progressing? - The integration is ongoing, with plans to enhance margins and focus on core marketplace businesses [48][49] Question: What role will AI play in future product offerings? - AI will be central to new product launches, enhancing data extraction and providing benchmarking solutions [61]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 rose 27% year-over-year to $900 million, an increase of $191 million from $709 million in Q4 2024. Full-year revenue for 2025 was $3.2 billion, up 19% from $2.7 billion in 2024 [8][56] - Adjusted EBITDA for 2025 was $442 million, up 83% from $241 million in 2024, positioning the company well for its guidance range of $740 million-$800 million for full-year adjusted EBITDA in 2026 [8][66] - The company delivered its strongest year for annualized net new sales bookings in 2025, reaching $308 million, up 23% from 2024 [9][64] Business Line Data and Key Metrics Changes - The commercial segment generated $1.79 billion in revenue for 2025, an 18% year-over-year increase, while the residential segment totaled $1.46 billion, a 20% increase year-over-year [56][58] - CoStar revenues grew 10% year-over-year, generating $325 million in Q4 2025, with a 94% quarterly renewal rate [11][60] - LoopNet revenue increased 17% in Q4 and 11% for the full year of 2025, with the fastest growth since 2021 [20][60] Market Data and Key Metrics Changes - The U.S. commercial real estate market is showing recovery, with commercial sales volumes climbing 30% year-over-year [10] - The residential business achieved a record of 642,000 paid single-family rental listings in 2025, up 49% over the prior year [46] - Homes.com rentals traffic grew 25% year-over-year, contributing significantly to the overall network traffic [45] Company Strategy and Development Direction - The company is focused on expanding its product offerings and integrating AI into its services, including the launch of Homes AI, which aims to enhance user engagement and drive growth [41][51] - CoStar is integrating its various platforms to create a unified tech environment, enhancing operational efficiency and profitability [61][49] - The company plans to continue expanding its sales force, particularly in the LoopNet and Matterport teams, to capitalize on market opportunities [63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the commercial real estate market and the potential for significant EBITDA expansion in 2026 [8][10] - The company anticipates a continued increase in adjusted EBITDA margins throughout 2026, driven by strategic marketing campaigns and seasonal revenue patterns [66] - Management highlighted the competitive advantage provided by proprietary data and AI capabilities, positioning the company for long-term growth [51][55] Other Important Information - The company completed a $500 million share buyback program in 2025 and announced a new $1.5 billion share repurchase program [64] - The company expects to repurchase $700 million worth of shares in 2026, with an accelerated share repurchase planned for the current quarter [65] Q&A Session Summary Question: What are the expectations for revenue growth in 2026? - The company expects revenue for 2026 to be between $3.78 billion and $3.82 billion, implying an annual growth rate of 16%-18% [66] Question: How is the company addressing the competitive landscape? - Management noted that the integration of Homes AI and the focus on proprietary data will provide a significant competitive edge in the market [41][51]

Core Insights - National rent growth in the U.S. showed a positive trend in January 2026, with the average rent increasing to $1,713, reflecting a 0.2% rise from December 2025's revised figure of $1,709 [1] - Annual rent growth slightly decreased to 0.6% in January 2026 from 0.7% in December 2025, and down from 1.5% in January 2025 [1] - Rent growth patterns are influenced by seasonal trends, with January typically building on December's growth [1] Rent Growth Trends - All four U.S. regions experienced month-over-month rent increases in January 2026, with the Midwest leading at 0.27%, followed by the Northeast at 0.21%, the South at 0.17%, and the West at 0.09% [1] - The Midwest also showed the strongest annual performance with a 2.1% increase, while the South and West experienced declines of 0.2% and 1.5% year-over-year, respectively [1] Market Performance - 42 out of the top 50 U.S. markets reported rent increases in January 2026, a significant improvement from 25 markets in December [1] - San Francisco led with a monthly rent growth of 1.07%, while Oklahoma City saw the steepest decline at -0.17% [1] Supply and Demand Dynamics - Elevated supply pressures continue to impact rent growth, with markets experiencing the highest levels of new construction showing weaker rent performance [1] - Areas with constrained supply, particularly in the Midwest and select coastal regions, are outperforming those with oversupply [1] Company Overview - CoStar Group, the parent company of Apartments.com, is a leader in commercial real estate information and analytics, dedicated to transforming the real estate industry through innovative technology [1]

Core Viewpoint - CoStar Group, Inc. will announce its financial results for Q4 and the full year of 2025 on February 24, 2026, after market close, followed by a conference call to discuss the results and outlook [1]. Company Overview - CoStar Group is a leading provider of online real estate marketplaces, information, analytics, and 3D digital twin technology, dedicated to digitizing the real estate sector [3]. - Founded in 1986, CoStar Group aims to empower individuals and businesses by providing insights and connections to improve their operations and lives [3]. Major Brands - CoStar Group's major brands include: - CoStar: A global provider of commercial real estate data, analytics, and news - LoopNet: The most trafficked commercial real estate marketplace - Apartments.com: The leading platform for apartment rentals - Homes.com: The fastest-growing residential real estate marketplace - Domain: A leading property marketplace in Australia - Matterport: A spatial data company that enhances the value and accessibility of spaces - STR: A leader in hospitality data and benchmarking - Ten-X: An online platform for commercial real estate auctions and bids - OnTheMarket: A leading residential property portal in the UK [4]. Website Traffic - CoStar Group's websites attracted over 143 million average monthly unique visitors in Q3 2025, indicating strong global client engagement [5].

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]