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COSTAR GROUP, INC. (CSGP)·Q1 2025 Earnings Summary

Executive Summary

  • Revenue landed at $732.2M (+12% YoY), at the top of guidance and above Street; Adjusted EBITDA was $65.6M, also above guidance, while GAAP diluted EPS was $(0.04), pressured by ~$31M of Matterport-related costs .
  • Against S&P Global consensus, revenue modestly beat ($732.2M vs $729.6M*) and GAAP EPS missed ($(0.04) vs $0.01*); management emphasized Adjusted EBITDA outperformance vs consensus and guidance .
  • FY25 revenue guidance was raised to $3.115–$3.155B (midpoint ≈ +15% YoY), but FY25 Adj. EBITDA trimmed to $355–$385M (midpoint ≈ 12% margin) due to Matterport; Q2 revenue guidance is $770–$775M and Adj. EBITDA $50–$60M .
  • Operating momentum improved in core businesses: CoStar and LoopNet net new bookings surged (CoStar +68% YoY, LoopNet +200% YoY), Apartments.com added 4,300 properties (most since 2016), Homes.com salesforce scaled rapidly with rising NPS and >50% demo-to-close rate in April—key catalysts for further growth .

What Went Well and What Went Wrong

  • What Went Well

    • Commercial engines re-accelerated: CoStar annualized net new bookings +68% YoY (best since Q3’23); LoopNet +200% YoY (best since Q3’22) as GTM refocus and asset-based pricing started to pay off .
    • Multifamily execution: Apartments.com revenue +11% YoY; 4,300 properties added (most since Q1’16); 80,000 multifamily properties on platform; lead quality and brand metrics strong .
    • Homes.com traction: network 104M avg. monthly uniques; unaided awareness rose to 36% from 4% pre-launch; Member agents win 61% more listings; demo-to-close >50% in April; NPS improved to 43 .

  • What Went Wrong

    • GAAP profitability remained pressured: Q1 GAAP net loss $(14.8)M and EPS $(0.04), including ~$31M negative impact from the Matterport acquisition; EBITDA was roughly breakeven .
    • Homes.com revenue cadence: Q1 residential revenue $27.2M reflects cancellations from early 2024 cohort; management expects sequential bookings improvement and H2 acceleration, but near-term growth modest in Q2 (low single digits) .
    • Operating expense intensity: S&M $368.9M and G&A $141.1M elevated as the company scales sales capacity and integrates acquisitions; while Q1 Adj. EBITDA outperformed, FY25 Adj. EBITDA guidance midpoint stepped down due to Matterport .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($M)$693.0 $709.4 $732.2
GAAP Diluted EPS ($)$0.13 $0.15 $(0.04)
Adjusted EBITDA ($M)$75.9 $111.9 $65.6
Adjusted EBITDA Margin (%)11% —9%

Q1 vs S&P Global consensus (Street):

  • Revenue: Actual $732.2M vs $729.6M estimate* → Beat .
  • GAAP EPS: Actual $(0.04) vs $0.01 estimate* → Miss .
    Values marked with * are retrieved from S&P Global.
Segment Revenue ($M)Q1 2024Q4 2024Q1 2025
CoStar (Total)$250.3 $260.3 $265.1
Information Services$33.0 $36.5 $39.8
Multifamily (Apartments.com)$254.8 $276.5 $282.5
LoopNet (Total)$69.1 $71.9 $72.8
Residential (Homes.com + OTM)$18.6 $28.1 $27.2
Other Revenues$30.6 $36.1 $44.8
Total$656.4 $709.4 $732.2

KPIs and Operating Metrics

  • Net New Bookings: $56M in Q1 (up 6% QoQ; +29% vs Q3’24) .
  • Contract Renewal Rate: 89% in Q1; 94% for 5+ year customers .
  • Average Monthly Unique Visitors (global sites): 130M in Q1 .
  • Homes.com unaided awareness: 36% (from 4% pre-launch) .
  • Homes.com NPS: 43 (up ~85 points since May 2024) .
  • Apartments.com properties added in Q1: 4,300 (most since Q1’16) .

Guidance Changes

MetricPeriodPrevious Guidance (Feb 18, 2025)Current Guidance (Apr 29, 2025)Change
Revenue ($B)FY 2025$2.985–$3.015 $3.115–$3.155 Raised
Adjusted EBITDA ($M)FY 2025$375–$405 $355–$385 Lowered (Matterport impact)
Revenue ($M)Q1 2025$711–$716 N/AN/A (actual reported)
Adjusted EBITDA ($M)Q1 2025$25–$35 N/AN/A (actual reported)
Revenue ($M)Q2 2025N/A$770–$775 New
Adjusted EBITDA ($M)Q2 2025N/A$50–$60 New
“Other” Revenue ($M, incl. Matterport)FY 2025N/A$270–$280; Matterport $135–$140 New detail
LoopNet Revenue GrowthFY 2025Mid-single-digit (implied) 7–8% (raised) Raised
CoStar Revenue GrowthFY 20256–7% 6–7% (maintained) Maintained
Apartments.com Revenue GrowthFY 202511–12% 11–12% (maintained) Maintained
Residential Revenue GrowthFY 2025High teens–low 20s % Mid-teens–low 20s % (reiterated) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24 and Q4’24)Current Period (Q1’25)Trend
Commercial cycle/macroCRE headwinds easing; green shoots; strong CoStar resilience Conditions improving: vacancy stabilizing, activity rising; core bookings accelerating Improving
LoopNet strategyShift to asset-based pricing; broaden silver tier; bookings improving Annualized net new bookings +200% YoY; implementing asset-based pricing at renewals Accelerating
Apartments.com growth focusTAM expansion, strong brand/lead quality +11% rev; +4,300 properties; Canada growth; leveraging RentPath exits Solid, Rooftop-led
Homes.com trajectoryMassive marketing; awareness and intention rising; salesforce scaling 104M AMU; unaided awareness 36%; NPS 43; >50% demo-to-close; Boost product, builders program planned Improving conversion/retention
Matterport integration/AIPending close; strategic fit Closed in Feb; deep integration across platforms; sales/R&D expansion; long-term TAM Strategic lever
InternationalUK OTM momentum; Europe buildout Domain (Australia) nonbinding offer; 16.9% stake; due diligence underway Expanding footprint
Regulatory/competitiveRealtor/Zillow models vs “your listing, your lead” Critique of Zillow policy; agent sentiment favors Homes.com model Positioning advantage

Management Commentary

  • “Q1 revenue came in at $732 million, a 12% increase year-over-year… Adjusted EBITDA was $66 million… both at the top end of our guidance range.” — Andrew Florance, CEO .
  • “Our commercial… brands delivered healthy 43% profit margins in the first quarter.” — Christian Lown, CFO .
  • “Apartments.com added 4,300 properties, the most properties in one quarter since Q1 2016.” — Andrew Florance .
  • “In one year, the Homes.com Network has become the second largest… with 104 million average monthly unique visitors… unaided consumer awareness grew to 36%… Member agents are winning 61% more listings…” — Andrew Florance .
  • “We completed the Matterport acquisition in February 2025… we plan to deploy Matterport across CoStar Group and meaningfully expand this unique data set.” — Andrew Florance .

Q&A Highlights

  • Zillow/NAR policy implications: Management characterized agent reaction to Zillow’s policy as “overwhelmingly negative,” viewing it as an opportunity for Homes.com’s model of routing leads to listing agents .
  • Matterport monetization: Plan to embed deeply across CoStar, LoopNet, Apartments, Homes; expand sales/R&D; expect tailwinds via higher engagement and lower cancellations as usage grows .
  • Investment mix: ~$50M annualized savings reallocated toward sales capacity; total 2025 investment plan unchanged, with more emphasis on Homes.com sales hiring .
  • Multifamily cadence: Q2 growth guided to ~10% due to timing/seasonality; added headcount and rooftops strategy expected to drive H2 acceleration; implied apartments bookings mid-$20M in Q1 .
  • Pricing power in CoStar Suite: Historically restrained in tough markets; expect to be “a touch more aggressive” as CRE improves while adding new data modules (e.g., lease benchmarking) .

Estimates Context

  • Q1 2025 vs S&P Global consensus: Revenue $732.2M vs $729.6M estimate* (beat); GAAP EPS $(0.04) vs $0.01 estimate* (miss) .
  • Q2 2025 revenue guidance midpoint ($772.5M) ≈ in line with S&P consensus $772.1M*; FY25 revenue guidance midpoint ($3.135B) below S&P consensus $3.239B*, suggesting potential estimate trims on revenue ex-Matterport and/or mix, while EBITDA consensus likely recalibrates lower given Matterport’s ~$30M 2025 drag disclosed by management .
    Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Core engine re-acceleration is evident: CoStar/LoopNet bookings strength and Apartments rooftop adds support multi-quarter revenue growth durability despite a still-normalizing CRE backdrop .
  • Mix matters for profitability: FY25 Adj. EBITDA guidance reset reflects Matterport integration; medium-term, management expects margin tailwinds as engagement/retention benefits accrue and sales productivity scales .
  • Homes.com is inflecting on sales effectiveness and retention: NPS improved to 43 and April demo-to-close >50%; near-term revenue cadence tempered by early-contract cancellations, but bookings should build through 2H25 .
  • Apartments.com remains a high-quality compounder: +11% revenue, record property adds, and strong brand/lead conversion underpin 11–12% FY25 growth outlook .
  • LoopNet’s pricing/packaging shift is a 2025–26 catalyst: silver-tier volume focus and asset-based pricing are driving bookings now, with revenue acceleration expected to build through 2025 .
  • Integration scale creates optionality: Matterport, STR, Visual Lease/Real Estate Manager, and potential Domain acquisition expand data, marketplaces, and monetization vectors across regions and asset classes .
  • Trading lens: Narrative likely centers on sustained top-line beats from core marketplaces vs. transitory GAAP EPS pressure from integration and Homes.com scaling; watch Q2 bookings, LoopNet growth trajectory, and Homes.com renewal metrics for confirmation .

Additional Relevant Press Releases (Q1 2025)

  • CoStar completed the acquisition of Matterport (Feb 28, 2025), highlighting plans to deepen AI/computer vision, expand 3D digital twins, and integrate across marketplaces .

Values marked with * are retrieved from S&P Global.