CoStar Group(US:CSGP)2023-02-22 03:25Financial Data and Key Metrics Changes - Total revenue for 2022 was $2.2 billion, representing a 12% year-over-year growth, coming in at the high end of guidance and above consensus estimates [29] - Fourth quarter revenue grew 13% on a constant currency basis, reaching $573 million, marking the 12th consecutive year of double-digit revenue growth [29] - Adjusted EBITDA for the full year was $672 million, exceeding the high end of guidance and consensus estimates, with a margin improvement of 300 basis points [31][74] Business Line Data and Key Metrics Changes - Apartments.com revenue was $198 million in Q4, a 16% increase year-over-year, and $740 million for the full year, a 10% increase [32] - CoStar revenue for 2022 was $837 million, up 16% from the previous year, with record net new sales [39] - LoopNet revenue for Q4 was $61 million, a 12% increase year-over-year, with net new sales bookings up 198% [42] Market Data and Key Metrics Changes - The U.S. multifamily vacancy rates rose to 7.1%, indicating a challenging environment for property owners [38] - The residential housing market is experiencing softness, with existing home sales down 38% over the past year due to rising mortgage rates [66] - The retail sector showed strong fundamentals, with a fourth quarter vacancy rate of 4.2%, the lowest recorded [65] Company Strategy and Development Direction - The company plans to continue investing in the residential market, particularly Homes.com, with expectations of strong returns similar to past investments in Apartments.com [17][91] - Expansion into Canada for Apartments.com was launched, targeting a $600 million Canadian apartment marketing opportunity [36] - The company aims to achieve 20% annual revenue growth, leveraging its strong brand and sales force [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate economic uncertainties, citing a resilient business model with high renewal rates and a strong balance sheet [72] - The company anticipates accelerating revenue growth in 2023, with a focus on its commercial information and marketplace businesses [75] - Management noted that the office sector continues to face challenges, but there are signs of recovery as office usage increases [63] Other Important Information - The company achieved a significant milestone by being included in the NASDAQ 100 and S&P 500, reflecting its consistent growth [67] - Employee engagement scores reached 83%, indicating a highly engaged workforce [69] - The company is committed to sustainability, with initiatives to reduce carbon emissions and improve transparency in human capital disclosures [68] Q&A Session Summary Question: Is it easier to find salespeople now compared to 6-12 months ago? - Management indicated that it is easier to find quality candidates due to a larger hiring stage and tightening in other sectors [3][4] Question: How have customer sales cycles changed? - The sales cycle for Apartments.com has shortened, while CoStar's sales cycle remains mixed due to the diverse sectors it serves [8] Question: What gives confidence in the residential business outperforming Apartments.com? - Management highlighted the larger market size and the company's growing experience in operating digital marketplaces as key factors [11][12]