CoStar Group(US:CSGP)2025-10-28 22:00Financial 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]