COSTAR GROUP (CSGP)·Q4 2025 Earnings Summary
CoStar Group Beats on All Metrics as Homes.com Reaches Profitability
February 24, 2026 · by Fintool AI Agent
CoStar Group (CSGP) delivered its 59th consecutive quarter of double-digit revenue growth, beating estimates across all key metrics while achieving a major profitability milestone at its Homes.com residential business. Shares closed up 2.7% to $49.15 following the release.
Did CoStar Beat Earnings?
Yes — triple beat on revenue, EPS, and EBITDA.
CoStar has now beaten EPS estimates in 8 consecutive quarters, with an average surprise of 24% over that span.
Full Year 2025 Highlights:
- Revenue: $3.2B (+19% YoY)
- Adjusted EBITDA: $442M (+83% YoY)
- Adjusted EPS: $0.87 (+19% YoY)
- Record Net New Bookings: $308M
Ask Fintool AI AgentWhat Did Management Guide?
CoStar affirmed its previously announced 2026 guidance:
Capital Return: CoStar announced plans to repurchase $700 million in shares during 2026 under its $1.5B authorized program. This follows the $500M repurchase completed in 2025.
What Changed From Last Quarter?
The big story: Residential reached profitability. The Homes.com segment achieved breakeven Adjusted EBITDA in Q4 2025, a major inflection point after years of heavy investment.
Segment recast: CoStar changed its reporting structure from geography-based to product portfolio-based segments (Commercial vs Residential), aligning with how management runs the business.
Key Management Quotes
"With our 59th consecutive quarter of double-digit revenue growth and Adjusted EBITDA surging 83% year-over-year, CoStar Group is entering a period of significant earnings acceleration. The heavy lifting of the Homes.com national brand launch is behind us."
— Andy Florance, Founder and CEO
"In just two years, the Homes.com Network has become the second largest and is the fastest growing residential portal network in the U.S., with over 2.1 billion views and 108 million average monthly unique visitors in 2025. We now have over 31,000 agent subscribers, 76% on annual contracts, generating nearly $100 million in annual run rate revenue."
— Andy Florance, Founder and CEO
"The launch of Homes AI — the most sophisticated vertical AI application in real estate — marks the beginning of a new era for our business. We intend to deploy this transformative capability across every platform in our portfolio."
— Andy Florance, Founder and CEO
Ask Fintool AI AgentSegment Performance
Commercial Real Estate: $471M (+20% YoY)
The "Other Commercial" line includes the Domain commercial business acquired in 2025. Commercial segment Adjusted EBITDA was $177M with a 38% margin.
Residential Real Estate: $429M (+35% YoY)
- Homes.com Network: 108M average monthly unique visitors, making it the #2 residential portal behind Zillow (235M) and ahead of Realtor.com (62M)
- Agent Subscribers: 31,000+, with 76% on annual contracts
- Annual Run Rate: Nearly $100M
- Q4 Adjusted EBITDA: Breakeven (vs. -$50M in Q4 2024)
How Did the Stock React?
The stock has faced significant pressure over the past year, falling nearly 50% from its highs as investors questioned the heavy investment in Homes.com. Today's results showing residential profitability may mark an inflection point.
Recent price action:
- The stock hit its 52-week low of $44.99 just 11 days ago (Feb 13)
- Shares are up 9% from that low following this earnings report
- Still trading well below the 50-day ($60.78) and 200-day ($75.55) moving averages
Balance Sheet & Cash Flow
The cash decrease reflects:
- $2.35B spent on acquisitions (Matterport, Domain)
- $500M share repurchase program completed
- $307M in campus construction
Key Risks & Concerns
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Valuation vs. Competitors: At ~21x market cap and with significantly lower traffic than Zillow, CoStar needs to continue demonstrating path to residential profitability beyond breakeven
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Marketing Spend Timing: Q1 2026 guidance for Adjusted EBITDA ($95-115M) is lower than Q4, reflecting seasonal marketing spend and Domain seasonality
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Integration Execution: Matterport and Domain acquisitions add complexity; management must demonstrate synergy capture
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Real Estate Cycle: Commercial real estate markets remain under pressure from higher interest rates
Ask Fintool AI AgentForward Catalysts
The Bottom Line
CoStar delivered a clean beat with the pivotal milestone of Homes.com reaching profitability. After two years of heavy investment that pressured margins and the stock price, management is now entering what they call "a period of significant earnings acceleration."
Bull Case: Homes.com breakeven validates the residential strategy. With the "heavy lifting" behind them, margins should expand significantly in 2026-2027. The $700M buyback at these depressed valuations is shareholder-friendly.
Bear Case: The stock remains ~50% off highs despite the beat. Commercial real estate headwinds persist, and residential monetization ($100M ARR vs. Zillow's ~$2B) remains nascent. Proving sustainable profitability, not just breakeven, is the next test.
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