CoStar Group's major brands include CoStar, a leading 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; and Domain, one of Australia's leading property marketplaces. CoStar Group's industry leading brands also include Matterport, a leading spatial data company whose platform turns buildings into dat ...

Company Overview - CoStar Group provides online real estate marketplaces, information, and analytics in both commercial and residential property markets, operating through segments such as CoStar Portfolio, Information Services Portfolio, Multifamily Portfolio, LoopNet Portfolio, and Other Marketplaces Portfolio [1] - Approximately 95% of the company's revenue comes from its core commercial real estate (CRE) franchises, including CoStar Suite and Apartments.com, which benefit from high barriers to entry and strong pricing power [4] Recent Developments - Third Point, an activist hedge fund, has called for significant changes at CoStar, including replacing a majority of the board and aligning management compensation with total shareholder return [3][8] - The firm plans to nominate a new slate of directors following the expiration of standstill restrictions [3] Financial Performance - CoStar has invested around $5 billion in its residential real estate (RRE) segment, Homes.com, which generated only $60 million in revenue for 2024 and is projected to generate $80 million in 2025 [5] - The RRE business has negatively impacted the company's overall performance, with shares underperforming the S&P 500 by over 45 percentage points since a previous agreement [7] Governance Issues - Despite governance changes, including the addition of new directors, management has continued to pursue unsuccessful RRE initiatives, leading to disappointing financial results [6] - CEO Andrew Florance received approximately $37 million in total compensation in 2024, despite the company's poor performance, raising concerns about accountability [8] Strategic Outlook - Third Point believes that the CRE business has significant untapped pricing power and potential for revenue growth, projecting EBITDA margins above 50% in the medium term [9] - The company’s under-levered balance sheet allows for share repurchases, further enhancing shareholder value creation opportunities [9]

ARLINGTON, Va.--(BUSINESS WIRE)--CoStar Group, Inc. (NASDAQ: CSGP), a leading provider of online real estate marketplaces, information, analytics, and 3D digital twin technology in the property markets, today issued the following statement in response to the letter issued by Third Point LLC ("Third Point†). The CoStar Group Board of Directors and management team are taking decisive action to prioritize profitable growth and increase long-term value for all stockholders. Over the last nine months, the CoSt ...

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CoStar Group FY Conference Summary Company Overview - **Company**: CoStar Group (NasdaqGS: CSGP) - **Date of Conference**: November 20, 2025 - **Key Speakers**: Chris Lown (CFO), Rich (Head of Investor Relations) Industry Insights Apartments Market - **Growth**: The apartments business has experienced 13 consecutive quarters of double-digit revenue growth, with a revenue increase from over $50 million to over $1.2 billion since acquisition over 10 years ago [5][6][7] - **Market Position**: CoStar is the market leader, significantly larger than its closest competitor, with a total addressable market (TAM) exceeding $9 billion [7][8] - **Technology Integration**: The introduction of Matterport Plus has enhanced customer experience, allowing virtual tours that lead to lower bounce rates and higher engagement [6][8][35] - **Sales Strategy**: A renewed focus on expanding the sales force by approximately 20% to better capture market opportunities [14][16] Competitive Landscape - **Market Dynamics**: CoStar faces competition primarily from Zillow and a few smaller players, but believes there is ample opportunity for growth due to low market penetration (15%-20%) [12][21] - **Differentiation**: CoStar emphasizes its technological edge and superior consumer experience as key differentiators in the market [12][13][21] AI and Technology - **AI Integration**: CoStar views AI as a transformative force in the industry, enhancing customer experience and operational efficiency [12][28][49] - **Data Utilization**: The company has over 2.4 trillion records, primarily proprietary, which provides a competitive advantage in data organization and analysis [46][47] Financial Performance - **Revenue Growth**: The apartments segment has shown consistent growth, with a focus on expanding into smaller property markets [5][21] - **Sales Efficiency**: The sales team is described as highly efficient, utilizing a metrics-focused approach to drive performance [19] Matterport Technology - **Adoption Rates**: 90% of users click on listings with Matterport, indicating its effectiveness in driving engagement [40][76] - **B2B Strategy**: CoStar is shifting its focus to a B2B model for Matterport, targeting larger clients rather than individual photographers [42] Homes Market - **Unique Positioning**: CoStar differentiates itself by focusing on helping listing agents and home sellers, rather than competing directly with buyer-focused platforms [52][53] - **Subscriber Growth**: The platform has over 26,000 subscribers and 130,000 paid listings, establishing itself as a market leader [56] Capital Allocation - **Buyback Program**: CoStar has accelerated its $500 million buyback program, indicating a strategic shift in capital allocation [78][79] Conclusion CoStar Group is positioned as a leader in the real estate technology space, with a strong focus on technology integration, market expansion, and capital efficiency. The company is leveraging AI and proprietary data to enhance its offerings and drive growth across its various platforms.

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]

Core Insights - CoStar Group (CSGP) is expected to report third-quarter 2025 earnings on October 28, with projected revenues between $800 million and $805 million, reflecting a year-over-year growth of 16% at the mid-point [1] - The Zacks Consensus Estimate for revenues stands at $826.06 million, indicating a growth of 19.27% compared to the same quarter last year [1] Revenue and Earnings Expectations - The consensus estimate for earnings remains unchanged at 18 cents per share, representing an 18.18% decline from the previous year's figure [2] - CoStar Group has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 26.10% [2] Performance Drivers - The third-quarter performance is likely to benefit from a strong portfolio of marketplaces, including Apartments.com, LoopNet, and Homes.com [3] - Increased traffic and higher advertising spending on Apartments.com are expected to contribute to top-line growth, with projected revenue growth of 11% to 12% for the platform in Q3 2025 [4] - Residential revenue is anticipated to increase by $3 million to $4 million sequentially in the upcoming quarter [4] User Engagement - In Q2 2025, CoStar Group's sites attracted 141 million average monthly unique visitors, while Homes.com Network had 111 million visitors, with this momentum expected to continue [5] International Segment and LoopNet - The international segment is showing strength, with the highest net new bookings in nearly three years, driven by a revamped sales strategy focusing on broad subscription packages, which is expected to enhance LoopNet's performance [6] - LoopNet's revenue growth rate is projected to be between 10% and 11% in Q3 [6] Acquisition Impact - CoStar Group's growth is supported by its acquisition strategy, particularly the acquisition of Matterport, which aims to integrate 3D capture technology into its real estate marketplaces [7] - Matterport is expected to contribute approximately $40 million in revenues in Q3 2025, despite the discontinuation of certain non-core revenue streams [8] - The company plans to leverage its large sales team to market Matterport's digital twin solutions effectively, enhancing the value of its marketplaces [9]

Core Insights - U.S. RevPAR has declined for the week ending 20 September, falling by 1.4%, primarily driven by a drop in occupancy rates [1][2][4] - The decline in occupancy has persisted for 118 days since May, with average daily rate (ADR) also experiencing a slight decrease of 0.3% [2][4][34] - The Top 25 Markets contributed significantly to the overall RevPAR decrease, with a collective drop of 2.8% [7][8] U.S. Market Performance - RevPAR has fallen year-over-year in 16 of the 20 days processed for September, with occupancy being the main factor [4][34] - Houston and New Orleans were notable contributors to the decline in the Top 25 Markets, with New Orleans experiencing a weekend drop of 41.5% [7][8] - Weekend RevPAR in the Top 25 Markets has decreased for four consecutive weeks, with the latest drop being the largest [9] Global Market Trends - Global RevPAR, excluding the U.S., increased by 5.6%, driven mainly by occupancy growth [25][27] - China was a significant factor in the slowdown of global ADR growth, with a 13.1% increase in RevPAR despite lower ADR growth [27] - Germany and France reported strong RevPAR growth due to events, with Germany's RevPAR increasing by 52.3% in Munich [29][30] Future Outlook - The short-term outlook for U.S. RevPAR appears unfavorable, with expectations of continued challenges due to upcoming Jewish observances and difficult comparisons to last year's Hurricane Helene [34] - September's month-to-date RevPAR shows a 0.8% gain, but is expected to end negatively on a day-matched basis, down 1.3% [34]