COSTAR GROUP, INC. (CSGP)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 delivered 20% revenue growth to $833.6M and a non-GAAP EPS of $0.23, with adjusted EBITDA of $114.6M; commercial information and marketplaces margin reached 47% and net new bookings surged 92% YoY to $84M .
• Revenue and non-GAAP EPS modestly beat Wall Street consensus; Q3 revenue actual $833.6M vs $825.2M consensus*, and non-GAAP EPS $0.23 vs $0.189 consensus*; Q4 guidance is broadly in line with consensus* (revenue $885–$895M; EPS $0.26–$0.28) .
• Guidance raised materially: FY25 revenue to $3.23–$3.24B (≈18% YoY) and FY25 adjusted EBITDA to $415–$425M; introduced Q4 EBITDA guidance of $150–$160M and non-GAAP EPS of $0.26–$0.28 .
• Strategic highlights: Homes.com acceleration (26k Members; Smart Search AI launch), Apartments.com momentum (Q3 revenue $303M, +11% YoY), and integration progress on Domain (Australia) and Matterport; management emphasized AI-led product upgrades and marketplace synergy .

What Went Well and What Went Wrong

What Went Well

• Record momentum in bookings and margins: Net new bookings up 92% YoY to $84M; commercial info/marketplaces profit margin increased to 47% (+400 bps sequentially) .
• Apartments.com execution: Q3 revenue $303M (+11% YoY), 99% monthly renewal rate, 93 NPS; 4,200 new communities added, with 223M network site visits and improved lead conversion .
• Homes.com trajectory and AI: 26,000 subscribing agents; Smart Search launch drove deeper engagement (filters +69%, listing pages/session +37%, 5x return rate, +51% leads) and the team sold 3,300 Boosts since July .

“Using proprietary AI and natural language capabilities…Smart Search lets consumers use their own voice to precisely search for a home.” — Andy Florance, CEO .

What Went Wrong

• GAAP profitability headwinds: Q3 GAAP net loss of $(30.9)M (diluted EPS $(0.07)) driven by higher amortization, stock-based comp, and integration costs; operating income fell to $(51.1)M .
• International EBITDA loss: International segment EBITDA was $(20.5)M in Q3 (North America $33.2M; total $12.7M), reflecting ongoing investments and integration .
• Subscription mix impact and other expense: Subscription revenue on annual contracts at 75% (down with Matterport/Domain mix); other expense increased amid integration and FX/other items .

Financial Results

Headline P&L versus prior periods and estimates

Consensus vs. Actuals and Guidance

Values retrieved from S&P Global.*

Segment Revenue Breakdown (Disaggregated Revenues)

KPIs and Operating Metrics

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered our 58th consecutive quarter of double-digit revenue growth… net new bookings in the third quarter of $84 million, up 92% year-over-year.” — Andy Florance, CEO .
• “Revenue excluding Domain of $808 million exceeded the high end of our guidance… adjusted EBITDA came in at $115 million, also exceeding the high end.” — Christian Lown, CFO .
• “I am extremely excited about the launch of Smart Search on Homes.com… Using proprietary AI and natural language capabilities… Smart Search lets consumers use their own voice to precisely search for a home.” — Andy Florance .

Q&A Highlights

• Seasonality and bookings trajectory: Apartments.com seasonality tied to NAA in Q2 with flow-through in Q3/Q4; Homes.com sequential bookings up 53% from Q2 to Q3 amid salesforce ramp .
• AI investment: 50% of Homes.com software development redirected to AI features without increasing total spend; 2026 Homes.com spend expected same or lower, excluding salesforce rollover .
• Homes.com pricing and productivity: Slight price increase; strong ROI per incremental rep; growth in rep productivity with onboarding pacing .
• Apartments.com demand and growth: Q4 2025 expected 11–12% growth; robust rooftop expansion; mid-$20Ms net new bookings in Q1 commentary .
• Domain/Matterport integration: Domain contributing $25M revenue stub; Matterport exceeded Q3 expectations ($44M) with bookings up 194% YoY; broader sales expansion planned .

Estimates Context

• Q3 2025 versus consensus: Revenue $833.6M vs $825.2M consensus* (beat); non-GAAP EPS $0.23 vs $0.189 consensus* (beat). Values retrieved from S&P Global.*
• Q4 2025 setup: Guidance revenue $885–$895M vs $892.0M consensus*; non-GAAP EPS $0.26–$0.28 vs $0.272 consensus* — broadly in line. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Topline and profitability momentum: Broad-based growth with a clean beat versus Q3 guide and consensus; material FY25 guidance raise on revenue and adjusted EBITDA .
• Apartments.com strength anchors near-term: Durable renewal/NPS and property additions support sustained double-digit growth into Q4 and FY25 .
• Homes.com inflection: Rapid subscriber growth, AI-driven engagement, and Boost/new-builder monetization point to an accelerating revenue trajectory into 2026 .
• AI as a multi-brand catalyst: Smart Search engagement metrics and planned AI features across Homes.com, Apartments.com, LoopNet, and CoStar should enhance conversion, retention, and monetization .
• International portfolio buildout: Domain and OnTheMarket expand TAM and synergy potential; near-term international EBITDA drag reflects integration and growth investments .
• Legal/regulatory backdrop: Management highlights competitive/legal actions around lead diversion models; Homes.com’s “your listing your lead” positioning may gain relative advantage .
• Setup for Q4: Guidance aligns with consensus; with ongoing salesforce ramp and product upgrades, estimate revisions could skew upward if execution persists .

Sources: Q3 2025 8-K and press release -; Q3 2025 earnings call transcript -; Q2/Q1 2025 prior quarter materials - - -. Values retrieved from S&P Global for consensus estimates.*