CoStar Group, Inc. (CSGP) is a leading provider of information, analytics, and online marketplaces for the real estate industry, primarily operating in the United States and the United Kingdom. The company offers a comprehensive real estate database and operates a prominent online marketplace for real estate and apartment listings, catering to various commercial property types such as office, retail, industrial, multifamily, commercial land, mixed-use, and hospitality **[0001193125-24-143159_d813688ds4.htm:23]** **[0001193125-24-157598_d813688ds4a.htm:24]**. CoStar Group's principal product lines include CoStar, Information Services, and Multifamily, with subscription-based services accounting for a significant portion of its revenue **[0001057352-24-000013_csgp-20231231.htm:63]** **[0001057352-24-000013_csgp-20231231.htm:106]** **[0001057352-24-000013_csgp-20231231.htm:73]** **[0001193125-24-182891_d856482dex992.htm:1]**.

1. **CoStar** - Provides a subscription-based platform offering commercial real estate intelligence, including data on properties, tenants, and market status.
2. **Multifamily** - Offers advertising services for rental units through its flagship brand, Apartments.com, and earns transaction-based revenue from tenant applications and rental payment processing.
3. **Information Services** - Delivers real estate and lease management solutions, along with benchmarking and analytics for the hospitality industry.

a0c410398c15fefe0fd95a86178da48acf727d8dbcb31601aec2a3fd47f3a46e

| Segment / Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **CoStar** (USD million) | **61**  **[CSGP_3229126_2]**  | **225.0**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **229.2**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **233.36**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | **238**  **[CSGP_3374128_5]**  | **250.3**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **253.0**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **256.9**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |
| **Information Services** (USD million) | N/A | **41.6**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **41.9**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **44.64**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | N/A | **33.0**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **33.4**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **33.0**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |
| **Multifamily** (USD million) | **198**  **[CSGP_3229126_0]**  | **210.7**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **224.3**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **235.34**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | N/A | **254.8**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **264.2**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **271.8**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |
| **LoopNet** (USD million) | **61**  **[CSGP_3229126_2]**  | **63.2**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **65.6**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **67.48**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | N/A | **69.1**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **69.8**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **70.9**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |
| **Residential** (USD million) | **16**  **[CSGP_3229126_8]**  | **13.2**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **12.7**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **10.29**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | N/A | **18.6**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **26.2**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **27.7**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |
| **Other Marketplaces** (USD million) | **38**  **[CSGP_3229126_8]**  | **30.6**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **32.3**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **33.56**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | N/A | **30.6**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **31.2**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **32.3**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |

277519c0a26ab8a2664470096316344530ae5a5e61df2e2e50400290293fc1d7

15128bca34f2828378e2ec5b060fbd605b37debdbdfc44d4435ed2c80808c8a4

204c2d64434cfa3b57df16a3ced64ac2d2d9a157c732eb0dcc113cd9e499275e

- **Google** - Mentioned as a potential competitor due to its far-reaching web presence and substantial data aggregation capabilities, which could allow it to enter the commercial real estate marketing arena  **[0001057352-24-000013_csgp-20231231.htm:27]** .
- **Zillow** - Already has a presence in residential real estate and the apartment rentals industry, and could use its resources to further expand in the online apartment rentals industry, creating greater competition among internet listing services  **[0001057352-24-000013_csgp-20231231.htm:27]** .

3aaab1110e939be5c17c2b1b3874be97924861712d0ec59c2a8a72688a5ed35f

Annualized Net New Bookings

Contract Renewal Rates

a69975815d9980a0c9947d87f20177a1b6fbe5106c4eb12aad386d49d81eaa35

| Metric / Quarter               | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Annualized Net New Bookings    | **77**  **[CSGP_3229126_0]**  | **80**  **[0001057352-23-000075_csgp-20230331.htm:27]**  | **82**  **[0001057352-23-000111_csgp-20230630.htm:29]**  | **65**  **[0001057352-23-000127_csgp-20230930.htm:30]**  | **58**  **[0001193125-24-040767_d781366dex991.htm:1]**  | **86**  **[0001057352-24-000059_csgp-20240331.htm:34]**  | **67**  **[0001057352-24-000091_csgp-20240630.htm:34]**  | **44**  **[0001057352-24-000125_csgp-20240930.htm:34]**  |
| Contract Renewal Rates         | **90**  **[0001057352-23-000030_csgp-20221231.htm:63]**  | **90**  **[0001057352-23-000075_csgp-20230331.htm:27]**  | **90**  **[CSGP_3383836_9]** **[CSGP_3255467_8]**  | **91**  **[CSGP_3361692_10]**  | **90**  **[CSGP_3374128_12]**  | **90**  **[0001057352-24-000059_csgp-20240331.htm:34]**  | **90**  **[0001057352-24-000091_csgp-20240630.htm:34]**  | **91**  **[CSGP_3403207_12]**  |

9181a57c4b8ee4bfd82f219f5b8c0bdf1186eda634aa465bf4781e20642151e8

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

d54c2ba7dcec3cd7cc7865627dd8996f5ee574c7ab887157818bcfa3b3f40853

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| North America        | **573**  **[0001057352-23-000026_q42022earningspressrelease.htm:1]**  | **563.6**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **584.3**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **602.7**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | **640**  **[0001193125-24-040030_d791117dex991.htm:0]**  | **623.3**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **643.8**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **658.2**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |
| International        | N/A     | **20.8**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **21.6**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **21.9**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | **89**  **[0001057352-24-000013_csgp-20231231.htm:76]**  | **33.1**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **34.0**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **34.4**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |
| Total Revenue        | N/A     | **584.4**  **[0001057352-23-000075_csgp-20230331.htm:14]**  | **605.9**  **[0001057352-23-000111_csgp-20230630.htm:17]**  | **624.7**  **[0001057352-23-000127_csgp-20230930.htm:17]**  | **729**  **[0001057352-24-000013_csgp-20231231.htm:76]**  | **656.4**  **[0001057352-24-000059_csgp-20240331.htm:20]**  | **677.8**  **[0001057352-24-000091_csgp-20240630.htm:20]**  | **692.6**  **[0001057352-24-000125_csgp-20240930.htm:20]**  |

17aeff6c5a1f6c08f0285148d8d5218a3506c7804b172575b9c1d92f3cdf06b0

1. "Given that core bookings were down 34% in the quarter and 38% year-to-date  **[CSGP_3403207_21]** , how do you anticipate this will impact revenue growth in 2025, and what strategies are you implementing to mitigate these headwinds?"

2. "With the aggressive investment in Homes.com already impacting margins  **[CSGP_3403207_17]** , can you provide more clarity on how next year's investment levels will trend relative to this year, and what impact this will have on overall profitability?"

3. "You have set ambitious targets to expand the Homes.com sales force to over 600 by the end of 2025  **[CSGP_3403207_7]** ; what challenges do you foresee in scaling the sales team so rapidly, and how will you ensure consistent sales productivity and effective onboarding?"

4. "Homes.com operates in a highly competitive market dominated by established players like Zillow and Realtor.com  **[CSGP_3403207_6]** **[CSGP_3403207_5]** ; what specific strategies are you employing to capture market share from these entrenched competitors, and how sustainable is your current growth trajectory?"

5. "While Homes.com's unaided awareness and Net Promoter Score have increased significantly  **[CSGP_3403207_5]** , how are you translating this increased consumer engagement into meaningful revenue growth, and can you provide evidence that this is leading to higher sales conversions for your agent members?"

439588b5d5b35bde56798666063c8cc4fef43c969ebd5249f8000cfee856176b

910d05c1394e3bc829a5ea14f6d1354b68510cda5c7450b324768b0956ba724c

CoStar

Information Services

Multifamily

LoopNet

Residential

Other Marketplaces

Commercial Property and Land

North America

International

Total Revenue

614060437884601b87b9aee869aa2e80d6333e640581859554239a21ada5d861

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Full Year 2024 Revenue**: $2.72 billion to $2.73 billion, growth of 11%  **[CSGP_3403207_13]** .
  2. **Adjusted EBITDA for 2024**: $205 million to $215 million, $10 million higher than Q2 guidance  **[CSGP_3403207_13]** .
  3. **CoStar Product Revenue Growth**: 10% growth  **[CSGP_3403207_12]** .
  4. **Apartments.com Revenue Growth**: 17% growth  **[CSGP_3403207_12]** .
  5. **LoopNet Revenue Growth**: Mid-single-digit growth  **[CSGP_3403207_12]** .
  6. **Residential Revenue**: Approximately $100 million  **[CSGP_3403207_12]** .
  7. **Information Services Revenue**: Modestly higher than $130 million annually  **[CSGP_3403207_12]** .
  8. **Other Marketplaces Revenue**: Similar in Q4 to Q3  **[CSGP_3403207_12]** .
  9. **Contract Renewal Rate**: 91% overall, 95% for long-term subscribers  **[CSGP_3403207_12]** .
  10. **Subscription Revenue on Annual Contracts**: 80%  **[CSGP_3403207_12]** .
  11. **Pending Acquisitions**: No financial impact from pending acquisitions included  **[CSGP_3403207_12]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  1. **Adjusted EBITDA Guidance**: $195 million to $205 million for FY 2024; $47 million to $52 million for Q3 2024  **[CSGP_3393965_9]** .
  2. **Commercial EBITDA Margin**: Around 41% for the year  **[CSGP_3393965_14]** .
  3. **Revenue Guidance**: $2.735 billion to $2.745 billion for FY 2024; $692 million to $697 million for Q3 2024  **[CSGP_3393965_8]** .
  4. **Residential Revenue Guidance**: $30 million for Q3 2024; $105 million to $110 million for FY 2024  **[CSGP_3393965_8]** .
  5. **Apartments.com Revenue Growth**: 17% for FY 2024  **[CSGP_3393965_8]** .
  6. **CoStar Revenue Growth**: 10% for FY 2024  **[CSGP_3393965_8]** .
  7. **LoopNet Revenue Growth**: Mid-single-digit growth for FY 2024  **[CSGP_3393965_8]** .
  8. **Information Services Revenue**: $130 million to $135 million for FY 2024  **[CSGP_3393965_8]** .
  9. **Other Marketplaces Revenue**: Relatively flat for Q3 and FY 2024  **[CSGP_3393965_8]** .
  10. **Exit Rate EBITDA Margin Target**: 15% to 16%  **[CSGP_3393965_11]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024
- **Guidance**:
  1. **Revenue Guidance**: $2.760 billion to $2.770 billion for FY 2024; $674 million to $679 million for Q2 2024  **[CSGP_3380282_10]** .
  2. **Adjusted EBITDA Guidance**: $185 million to $205 million for FY 2024; $5 million to $10 million for Q2 2024  **[CSGP_3380282_11]** .
  3. **Segment Revenue Growth**:
     - **Apartments.com**: 17% for FY 2024  **[CSGP_3380282_10]** .
     - **CoStar**: 10% for Q2 and FY 2024  **[CSGP_3380282_10]** .
     - **LoopNet**: 5% to 6% for Q2 2024; mid-single digits for FY 2024  **[CSGP_3380282_10]** .
     - **Information Services**: $130 million to $135 million for FY 2024  **[CSGP_3380282_10]** .
     - **Other Marketplaces**: Flat for FY 2024  **[CSGP_3380282_10]** .
  4. **Residential Revenue**: 180% total growth, 105% organic growth for FY 2024  **[CSGP_3380282_9]** .
  5. **Contract Renewal Rates**: 90% overall, 94% for long-term subscribers  **[CSGP_3380282_10]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024 and FY 2024
- **Guidance**:
  1. **Revenue**: $2.75 billion to $2.77 billion for FY 2024; $645 million to $650 million for Q1 2024  **[CSGP_3374128_12]** .
  2. **Adjusted EBITDA**: $170 million to $190 million for FY 2024; negative for Q1 2024  **[CSGP_3374128_12]** .
  3. **Residential Revenue**: $110 million to $120 million for FY 2024  **[CSGP_3374128_11]** .
  4. **Capital Expenditures**: $800 million for FY 2024  **[CSGP_3374128_12]** .
  5. **Net Interest Income**: $200 million for FY 2024  **[CSGP_3374128_12]** .

d988b6fef63c723c14a07c704af5785fd8e95ac1b45e50eae25024a32b353e02

| Name                  | Position                                      | Start Date         | Short Bio                                                                                                                                                                                                 |
|-----------------------|-----------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Andrew C. Florance    | Founder, President, and CEO                   | 1987               | Andrew C. Florance founded CoStar Group in **1987** and has been serving as a director since then. He has led the company from a start-up to a market-leading position, including its IPO in July 1998  **[0001193125-24-117787_d806524ddef14a.htm:25]** **[0001193125-24-117787_d806524ddef14a.htm:13]** **[0001193125-23-122453_d412492ddef14a.htm:11]** .                              |
| Scott T. Wheeler      | Chief Financial Officer                       | January 2016       | Scott T. Wheeler has been the CFO of CoStar Group since **January 2016**. He previously held senior financial roles at Experian plc and worked at Avery Dennison and General Electric  **[0001193125-24-117787_d806524ddef14a.htm:25]** .                                                      |
| Lisa C. Ruggles       | Senior Vice President, Global Operations      | November 1999      | Lisa C. Ruggles joined CoStar Group in **November 1999** and has held various roles, becoming Senior Vice President, Global Operations in 2022. She has been key in launching CoStar's research coverage in multiple markets  **[0001193125-24-117787_d806524ddef14a.htm:25]** **[0001193125-23-122453_d412492ddef14a.htm:24]** .            |
| Frederick G. Saint    | President, Marketplaces                       | 2000               | Frederick G. Saint joined CoStar Group in **2000** through the acquisition of LoopNet. He became President, Marketplaces in September 2018, overseeing product, marketing, and business development  **[0001193125-24-117787_d806524ddef14a.htm:26]** **[0001193125-23-122453_d412492ddef14a.htm:24]** .                                     |
| Frank A. Simuro       | Chief Technology Officer                      | December 1999      | Frank A. Simuro has been with CoStar Group since **December 1999**, initially as Director of Information Systems. He became CTO in March 2015, focusing on operational efficiency and database technologies  **[0001193125-24-117787_d806524ddef14a.htm:26]** **[0001193125-23-122453_d412492ddef14a.htm:24]** .                             |
| Michael J. Desmarais  | Chief Human Resources Officer                 | July 2019          | Michael J. Desmarais has been the Chief Human Resources Officer since **July 2019**. He previously held senior HR roles at Goldman Sachs & Co. and began his career in public accounting  **[0001193125-23-122453_d412492ddef14a.htm:25]** **[0001193125-24-117787_d806524ddef14a.htm:26]** .                                                |
| Jonathan Boxer        | General Counsel and Corporate Secretary       | March 2022         | Jonathan Boxer joined CoStar Group in **March 2022** as General Counsel and Corporate Secretary. He has extensive experience in legal and compliance functions, mergers and acquisitions, and enterprise risk management  **[0001193125-23-122453_d412492ddef14a.htm:25]** **[0001193125-24-117787_d806524ddef14a.htm:26]** .                |
| Christian M. Lown     | Chief Financial Officer and Principal Financial Officer | July 1, 2024 (expected) | Christian M. Lown will serve as CFO and Principal Financial Officer starting **July 1, 2024**  **[0001057352-24-000080_xslF345X02/wk-form3_1720037429.xml:0]** .                                                                                                        |
| Rich Simonelli        | Head of Investor Relations                    | July 11, 2024 (expected) | Rich Simonelli was appointed as Head of Investor Relations on **July 11, 2024**. He rejoined CoStar Group from Compass, having previously held a similar role at CoStar for nine years  **[0001057352-24-000084_release_costargroupnamesri.htm:0]** .                                                      |

42d7c20929120c08eecebe5084a0270d62f4f3d58a1e88c726b7b02564bace7a

- United States

ae820242eebc023e37712c14f1ef0aa5834a3c154e21a985b1065db066fda49a

**Quarterly guidance for Q4 2024:**
- **Other Marketplaces Revenue**: Similar in Q4 to Q3  **[CSGP_3403207_12]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Full Year 2024 Revenue**: $2.72B to $2.73B  **[CSGP_3403207_13]**  (lowered from $2.735B to $2.745B  **[CSGP_3393965_8]** )  
- **Adjusted EBITDA**: $205M to $215M  **[CSGP_3403207_13]**  (raised from $195M to $205M  **[CSGP_3393965_9]** )  
- **CoStar Product Revenue Growth**: 10%  **[CSGP_3403207_12]**  (no change from 10%  **[CSGP_3393965_8]** )  
- **Apartments.com Revenue Growth**: 17%  **[CSGP_3403207_12]**  (no change from 17%  **[CSGP_3393965_8]** )  
- **LoopNet Revenue Growth**: Mid-single-digit  **[CSGP_3403207_12]**  (no change from mid-single-digit  **[CSGP_3393965_8]** )  
- **Residential Revenue**: ~$100M  **[CSGP_3403207_12]**  (lowered from $105M–$110M  **[CSGP_3393965_8]** )  
- **Information Services Revenue**: Modestly higher than $130M  **[CSGP_3403207_12]**  (no change from $130M–$135M  **[CSGP_3393965_8]** )  
- **Contract Renewal Rate**: 91% overall, 95% for long-term subscribers  **[CSGP_3403207_12]**  (no prior guidance)  
- **Subscription Revenue on Annual Contracts**: 80%  **[CSGP_3403207_12]**  (no prior guidance)  
- **Pending Acquisitions**: No financial impact from pending acquisitions included  **[CSGP_3403207_12]**  (no prior guidance)  

152ba8ae4d840720e68eda37d6e039f1a592fe55a940edd94078343fcec7ab8e

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1994       | Present  | Current auditor   |  **[0001057352-24-000013_csgp-20231231.htm:100]**  |

4af34873388a40e1fb95a0c4cca6bcb9d6ffe01997ab61d124e069990ec20648

8e05817bee02c499809e08d4c7a882c0726993bd7a963565d713c4e554c02ee7

- Total Revenue: $692.6 million (+11% YoY)  **[0001057352-23-000127_csgp-20230930.htm:17]** **[0001057352-24-000125_csgp-20240930.htm:20]**   
- CoStar Segment: $256.9 million (+10% YoY)  **[0001057352-23-000127_csgp-20230930.htm:17]** **[0001057352-24-000125_csgp-20240930.htm:20]**   
- Information Services: $33.0 million (-26% YoY)  **[0001057352-23-000127_csgp-20230930.htm:17]** **[0001057352-24-000125_csgp-20240930.htm:20]**   
- Multifamily: $271.8 million (+15% YoY)  **[0001057352-23-000127_csgp-20230930.htm:17]** **[0001057352-24-000125_csgp-20240930.htm:20]**   
- LoopNet: $70.9 million (+5% YoY)  **[0001057352-23-000127_csgp-20230930.htm:17]** **[0001057352-24-000125_csgp-20240930.htm:20]**   
- Residential: $27.7 million (**+169% YoY**)  **[0001057352-23-000127_csgp-20230930.htm:17]** **[0001057352-24-000125_csgp-20240930.htm:20]**   
- North America Revenue: $658.2 million (+9% YoY)  **[0001057352-23-000127_csgp-20230930.htm:17]** **[0001057352-24-000125_csgp-20240930.htm:20]**   
- International Revenue: $34.4 million (+57% YoY)  **[0001057352-23-000127_csgp-20230930.htm:17]** **[0001057352-24-000125_csgp-20240930.htm:20]**   
- Operating Income: $23.6 thousand (-62% YoY)  **[0001057352-23-000127_csgp-20230930.htm:3]** **[0001057352-24-000125_csgp-20240930.htm:3]**   
- Net Income: $53 thousand (**-99% YoY**)  **[0001057352-23-000127_csgp-20230930.htm:3]** **[0001057352-24-000125_csgp-20240930.htm:3]**   

de330e2fc714890aafa5525b2dac622d69eba071f74d7e0a703251644c21b561

be2e788b0dbe81c469b27fdef4eb21c4e1919e4338439d474a74b162f6e6c851

af005f19c65f46a567151c5bcc24996c69ec09e42a7c88853df5811797381862

| Year  | Amount Due (in billions) | Debt Type                  | Interest Rate | % of Total Debt |
|-------|--------------------------|----------------------------|---------------|-----------------|
| 2030  | $1.0                     | 2.800% Senior Notes        | 2.800%        | 100% = (1.0B / 1.0B) * 100 **[0001057352-24-000125_csgp-20240930.htm:26]** **[0001057352-24-000125_csgp-20240930.htm:28]** |

070f871b7b8a594078e611f1b8b16dfb8daf2cd25b5465ca3b81c70425f02b19

Annualized net new bookings for subscription-based services on all contracts (USD millions)

Contract renewal rates for existing company-wide subscription-based services for contracts with a term of at least one year (percentage)

Cancellation rates for existing company-wide subscription-based services for contracts with a term of at least one year (percentage)

e80b224bf38b55871764c534b5e6b41059dc451db8d7ad9b458ef17f5a2e04ac

1. **Residential Revenue Guidance Reduction**  
   **Q:** Why did you lower full-year residential revenue guidance by $20–25 million?  
   **A:** The primary factor is that many members of the borrowed sales force are returning to selling their core products. This natural shift means we need to focus on building a dedicated Homes.com sales team. While the initial results were strong, we believe this adjustment provides a more appropriate and hopefully conservative build of the business. We remain confident in our product and are seeing phenomenal traffic and user preference.  **[CSGP_3393965_12]** ,  **[CSGP_3393965_10]** ,  **[CSGP_3393965_11]** 

2. **Salesforce Productivity and Dedicated Team**  
   **Q:** Is salesforce productivity affecting Homes.com's growth?  
   **A:** Yes, the borrowed sales force tends to migrate back to their existing products over time. To sustain growth, we are focusing on expanding our dedicated Homes.com sales team, which has higher Net Promoter Scores and better post-sales follow-up. This dedicated team is performing well, and we need to continue growing it to capture the full potential of the market.  **[CSGP_3393965_10]** ,  **[CSGP_3393965_12]** 

3. **EBITDA Margin Expectations**  
   **Q:** Are your EBITDA margin targets still the same?  
   **A:** Yes, we expect our exit rate EBITDA margin target for the residential business to remain within the **15% to 16%** range. For the commercial segment, we anticipate margins around **41%**, consistent with the second quarter.  **[CSGP_3393965_11]** ,  **[CSGP_3393965_14]** 

4. **Apartments.com Trends and Competition**  
   **Q:** How will you maintain leadership in Apartments.com amid increased competition?  
   **A:** We believe we are in a 'Goldilocks zone' economically for Apartments.com. We are maintaining our competitive advantage through robust product development and consistently growing traffic. There is significant room for growth, especially in smaller and mom-and-pop rental units where penetration is low. While competition may increase, the market is large, and we are well-positioned to continue our leadership.  **[CSGP_3393965_13]** 

5. **CoStar Suite Growth Drivers**  
   **Q:** What are the future growth drivers for CoStar Suite?  
   **A:** We are focusing on developing products for corporate users, owners, lenders, and institutions—segments with low current penetration. Expanding into international markets like Germany, France, and Spain, as well as enhancing global hospitality functions with STR, will also drive growth. Additionally, we see opportunities as residential firms increasingly engage in commercial real estate.  **[CSGP_3393965_15]** 

6. **Residential Business and Buyer's Leads**  
   **Q:** How do you balance value to home buyers with generating listings for agents?  
   **A:** Our priority is to produce the best site for home buyers, offering a superior user experience. We focus on a 'your listing, your lead' model, which benefits both buyers and agents by connecting interested buyers directly with the listing agent. This approach generates buyer agency leads more harmoniously and sustainably, supporting agents in winning more listings and serving buyers effectively.  **[CSGP_3393965_19]** ,  **[CSGP_3393965_10]** 

ec55c6cdca6ac9e504ded56c15d6cc8604b5ec715e57ee6925b31e62add781b8

- **Decrease in residential revenue guidance by $20 million to $25 million** due to challenges in building a dedicated sales force for Homes.com, suggesting execution risks and slower than expected monetization.  **[CSGP_3393965_12]**
- **Core commercial bookings are down year-over-year**, as sales teams diverted focus to selling Homes.com memberships, potentially impacting the core commercial business.  **[CSGP_3393965_16]**
- **Continued significant investment in Homes.com is required**, with no immediate relief in costs, indicating that profitability in the residential segment may be delayed over a multiyear period.  **[CSGP_3393965_18]**

fd51047ea06ab594006a4560adb68fb0d6af1dee8e3b9dfdf6b8379ece7487ef

- **Aggressive Investment in Residential Sector**: CoStar Group is investing approximately **$1 billion** in its residential business in 2024, nearly doubling the spend from 2023. These investments focus on marketing for **Homes.com in the U.S.** and **OnTheMarket in the U.K.**, aiming to rapidly gain market share and move faster than competitors expected. ( **[CSGP_3374128_16]** ,  **[CSGP_3374128_17]** )
- **Exceeding Initial Expectations with Strong Early Results**: Initial sales and traffic results for Homes.com are **exceeding expectations** dramatically, indicating strong market demand. The company is pleased with the early performance, which supports their aggressive investment strategy in the residential sector. ( **[CSGP_3374128_19]** )
- **Improving Margins and Profitability Outlook**: CoStar expects a **steady sequential increase in margins** throughout 2024, reaching over **15% to 16%** by year-end. Additionally, investments in the residential business are anticipated to **moderate in future years**, suggesting improved profitability and a positive long-term outlook. ( **[CSGP_3374128_16]** ,  **[CSGP_3374128_17]** )

9aa9fbd4a4e55743cf565f800e83544ed3a8ba39610e38b26f313197b8acf6b3

1. **Core Bookings Decline Impact**  
   **Q:** Weak bookings down 34%—impact on future revenue?  
   **A:** In our subscription business, net bookings translate into revenue the following year. The **34% decline in core bookings this quarter**  **[CSGP_3403207_21]**  will affect 2025 revenue. We're reengaging the sales force and investing in them. Watch our net bookings in Q4 and early next year, which will influence growth into 2026.  **[CSGP_3403207_21]** 

2. **Growth Outlook for Core Businesses**  
   **Q:** Outlook for growth in CoStar Suite and LoopNet in 2025?  
   **A:** We're optimistic about growth in 2025 as the market improves. Early signs in the office market should shift from a headwind to a tailwind, benefiting us.  **[CSGP_3403207_14]**  There's ample room to grow among brokers, corporations, and institutions, and growth will be easier in a better market.  **[CSGP_3403207_14]** 

3. **Homes.com Investment Levels**  
   **Q:** Will investment in Homes.com affect margins next year?  
   **A:** We launched Homes.com with aggressive investment appropriate for its scale. We don't see a need to increase investment in marketing or Homes.com next year.  **[CSGP_3403207_17]**  Margins should stabilize as we've passed the low point in net investment.  **[CSGP_3403207_17]** 

4. **Marketing Spend Reduction**  
   **Q:** Will Homes.com marketing spend decrease next year?  
   **A:** We anticipate a **33% reduction in Homes.com Super Bowl ads** this year.  **[CSGP_3403207_19]**  While marketing spend may decrease, we'll significantly grow the sales force, so overall investment levels will remain similar.  **[CSGP_3403207_19]** 

5. **Reengaging Sales Force**  
   **Q:** How is shifting sales focus back to core products going?  
   **A:** We've seen an uptick in CoStar sales recently as salespeople refocus on core products.  **[CSGP_3403207_15]**  Previously, selling Homes.com distracted them and affected productivity. By 2025, **100% of legacy sales teams** will be back on their products, reenergizing growth.  **[CSGP_3403207_15]** 

6. **Homes.com Seasonality and Renewals**  
   **Q:** Is seasonality affecting Homes.com renewals?  
   **A:** The main issue wasn't seasonality but launching a new product with limited training.  **[CSGP_3403207_16]**  Some customers misunderstood the value proposition. However, we're showing a **50% improvement in win rate on new listings**, providing adequate ROI.  **[CSGP_3403207_16]**  NPS scores are improving, and we expect agents with consistent listings to be high renewal subscribers.  **[CSGP_3403207_16]** 

7. **Sales Force Capacity for Homes.com**  
   **Q:** Is reduced guidance due to sales force issues or demand?  
   **A:** It's about sales force mechanics, not client demand.  **[CSGP_3403207_18]**  We're hiring many salespeople for Homes.com. A high percentage are ramping up quickly, but there's a limit to how many we can hire and train effectively.  **[CSGP_3403207_18]** 

8. **Patience with Homes.com's Progress**  
   **Q:** How patient should investors be with Homes.com's progress?  
   **A:** Building a **$1 billion product** takes time; it doesn't happen in seven months.  **[CSGP_3403207_20]**  We're seeing growth in consumer awareness, site preference, and a shift in the industry.  **[CSGP_3403207_20]**  Positive sales metrics and improving NPS scores indicate we're on the right path, but it may be next year before success is evident to everyone.  **[CSGP_3403207_20]** 

848e1402bd4867cccf9b1175f1793f4dc60c623926260036e2c724c0f55a4352

1. **Homes.com Sales Progress**  
   **Q:** How is Homes.com performing in sales and market potential?  
   **A:** Homes.com has exceeded expectations, selling around **8,000 memberships** at an average price of **$475 to $500 per month**.  **[CSGP_3380282_15]** **[CSGP_3380282_16]**  The company aims to grow to **100,000 members** sooner rather than later, with the potential to reach **hundreds of thousands of members**.  **[CSGP_3380282_15]** **[CSGP_3380282_16]** **[CSGP_3380282_18]**  The close cycle is extremely fast, typically closing simultaneously with the demo.  **[CSGP_3380282_14]** 

2. **Homes.com Pricing Strategy**  
   **Q:** Will Homes.com adjust pricing as growth matures?  
   **A:** CoStar plans to maintain the current pricing of **$475 to $500 per month**, with no changes anticipated over time.  **[CSGP_3380282_15]** **[CSGP_3380282_18]**  The pricing scheme is bespoke to each agent, considering factors like listing value and market.  **[CSGP_3380282_18]**  While there is demand for premium tiers, the focus remains on mass adoption before introducing premium options.  **[CSGP_3380282_18]** 

3. **EBITDA Margin Outlook**  
   **Q:** Are you still on track to reach the full-year EBITDA margin target?  
   **A:** Yes, CoStar remains on target for the **42%** EBITDA margin for the year.  **[CSGP_3380282_16]**  In the first quarter, adjusted EBITDA margins were about **39%**.  **[CSGP_3380282_16]** 

4. **Residential Spend and Profitability**  
   **Q:** Has residential spend peaked, and how will it impact profitability?  
   **A:** Quarterly expenses in residential will be roughly the same in the second quarter as the first, then decline throughout the year.  **[CSGP_3380282_17]**  Total expected residential spending remains unchanged from prior communications.  **[CSGP_3380282_17]** 

5. **Apartments.com Outlook**  
   **Q:** What's the outlook for Apartments.com given unit deliveries?  
   **A:** Unit deliveries are slightly decreasing but remain high historically.  **[CSGP_3380282_20]**  The vacancy rate is around **9.1%**, which is elevated.  **[CSGP_3380282_20]**  CoStar expects **2 to 3 years** of elevated vacancy, considered ideal for selling Apartments.com.  **[CSGP_3380282_20]** 

6. **Matterport Integration Strategy**  
   **Q:** How will CoStar integrate Matterport and drive growth?  
   **A:** CoStar plans to make Matterport's digital twins ubiquitous across its platforms, including Homes.com, Apartments.com, and LoopNet.  **[CSGP_3380282_23]**  By adjusting pricing and adopting digital twins broadly, they aim to significantly accelerate Matterport's sales and revenue outside of its use within CoStar.  **[CSGP_3380282_23]** 

7. **Homes.com Sales Force Scaling**  
   **Q:** When will sales incentives shift back to core businesses?  
   **A:** CoStar will continue using the broader sales effort through the end of the year, planning to focus more on a dedicated Homes.com sales team in **2025**.  **[CSGP_3380282_19]**  They aim to build up a **300 to 400 person** sales force for Homes.com.  **[CSGP_3380282_19]** 

8. **Homes.com Market Reach and Conversion**  
   **Q:** How long to reach the target market with demos?  
   **A:** They've demoed to about **7%** of the **540,000** core prospects.  **[CSGP_3380282_21]**  With high conversion rates from demos to closes, the challenge is scaling to conduct more demos.  **[CSGP_3380282_21]** 

9. **Value for Agents Without Listings**  
   **Q:** Why are agents without listings subscribing?  
   **A:** Agents without current listings can still gain value by enhancing their presence as neighborhood experts and retargeting potential clients.  **[CSGP_3380282_22]**  Even without active listings, they receive significant exposure on and off the site.  **[CSGP_3380282_22]** 

69dfd25bda1eaa737f7fe07c12f96ec4269ad75e33485a733df7fa377893064e

- **Decline in net new bookings may impact future revenue growth.** The company reported that core bookings were down **34% in the quarter** and **38% year-to-date**, which will mechanically translate into lower revenue in the following year.  **[CSGP_3403207_21]**
- **Sales force productivity issues due to Homes.com launch may negatively impact overall sales.** The reallocation of the sales force to focus on Homes.com resulted in **lower productivity**, **lower service skills**, and **suboptimal value propositions**, causing lower overall productivity and renewal rates.  **[CSGP_3403207_1]** **[CSGP_3403207_18]**
- **Reduced revenue guidance for the residential segment and concerns about seasonality.** The company reduced its full-year revenue outlook for the residential segment, expecting revenue to approximate **$100 million**, and there are concerns about seasonality affecting renewals in the Homes business due to short-term contracts.  **[CSGP_3403207_13]** **[CSGP_3403207_16]**

a58807e8dfc72eeb8498114bb49f90550bf67fe7de9830fecc6dd918d03a3072

1. **Residential Investments and Margin Outlook**  
   **Q:** Where are residential investments going and margin expectations?  
   **A:** The company is investing **$1 billion** in residential this year, nearly double the 2023 spend **[CSGP_3374128_16]**. Investments focus on marketing for OnTheMarket with **$50 million** committed, boosting listings and traffic toward the #2 position **[CSGP_3374128_16]**. Additional investments are in Homes.com's U.S. business, mainly marketing, content research, and technology **[CSGP_3374128_16]**. Margins are expected to improve sequentially, reaching **12%-13%** in the second half and over **15%, probably 16%** exiting the year **[CSGP_3374128_16]**.

2. **Homes.com Monetization and 2027 Targets**  
   **Q:** Thoughts on 2027 targets after starting Homes.com monetization?  
   **A:** With Homes.com now monetizing, the company remains committed to its 2027 goals **[CSGP_3374128_15]**. They're seeing traction toward these targets and plan to discuss revenue growth next quarter **[CSGP_3374128_15]**. Peak net investment occurs this year; costs won't significantly increase in future years **[CSGP_3374128_15]**.

3. **Legal Backdrop and Competitive Advantage**  
   **Q:** How does the legal situation affect Homes.com?  
   **A:** The legal environment is complex, but Homes.com is advantageously positioned as its revenue model is agnostic to buyer/broker participation rules **[CSGP_3374128_20]**. The platform generates leads for both buyers and sellers, unlike competitors relying on seller agents splitting commissions with buyer agents **[CSGP_3374128_20]**. Potential shifts to buyers paying their own agents could create tailwinds for Homes.com **[CSGP_3374128_20]**.

4. **Net New Bookings and Cyclicality**  
   **Q:** Explain net new bookings dynamics and cyclicality.  
   **A:** Net new bookings were **$286 million** this year, slightly behind last year's **$300 million** **[CSGP_3374128_18]**. Fourth-quarter cyclicality was observed, with **Apartments.com** performing strongly due to vacancy levels **[CSGP_3374128_18]**. **CoStar and LoopNet** were relatively softer in Q4 **[CSGP_3374128_18]**. Next year, higher total company sales growth is expected, aided by Homes.com and reduced drag from legacy residential products **[CSGP_3374128_18]**.

5. **Sales Force Strategy for Homes.com**  
   **Q:** When will sales activities shift back to a dedicated team?  
   **A:** The entire sales force will sell Homes.com throughout **2024** for rapid sales **[CSGP_3374128_14]**. It will take a full year to build a dedicated Homes.com sales team **[CSGP_3374128_14]**. In **2025**, they expect to shift back to the general group **[CSGP_3374128_14]**.

6. **Homes.com Revenue Model and Membership**  
   **Q:** What is included in the Homes.com membership?  
   **A:** Memberships are sold to agents, priced based on transaction volumes and markets **[CSGP_3374128_21]**. Members' listings rank higher, feature more agent branding, and benefit from aggressive traffic retargeting **[CSGP_3374128_21]**. Members receive **1.3 million impressions** per month on average, compared to **5,000** for nonmembers **[CSGP_3374128_21]**. Members experience an **8 to 14 times** increase in lead flow **[CSGP_3374128_21]**.

7. **Agent Targeting and Pricing**  
   **Q:** Are specific agents being targeted for bookings?  
   **A:** Initially targeting **540,000** agents earning above **$30,000-$40,000** annually out of **1.6 million** total **[CSGP_3374128_22]**. Price points range from **$100-$200** per month at the lower end to tens of thousands monthly for larger teams **[CSGP_3374128_22]**. Strong inbound interest from all agents, with sales responding swiftly **[CSGP_3374128_22]**.

8. **Investment Flexibility**  
   **Q:** Is there flexibility in investment plans this year?  
   **A:** Early results exceed expectations, so there's no plan to adjust aggressive marketing investments **[CSGP_3374128_19]**. They've deployed **80 billion impressions** or **600 impressions per household** **[CSGP_3374128_19]**. While they have flexibility to pull back if necessary, they don't anticipate doing so **[CSGP_3374128_19]**.

9. **Front-Loading Investments**  
   **Q:** Are you front-loading investments into 2024?  
   **A:** Yes, over half the investment is marketing in the UK and US, effectively front-loading **[CSGP_3374128_17]**. Previously spent **$40 million** on Apartments.com marketing in year one; they're being more aggressive now **[CSGP_3374128_17]**.

0d5c2c555a9ced65fcb945f8df4c9a635f09fe0be0630c4960d5befb5abf1b69

- CoStar's commercial business maintains strong **EBITDA margins of around 41%**, and expects this to continue, demonstrating robust profitability.  **[CSGP_3393965_14]**
- **Apartments.com** is outperforming competitors with consistent traffic growth and superior **lead-to-lease conversion rates**, seeing significant growth opportunities in underpenetrated market segments like mom-and-pop units.  **[CSGP_3393965_13]**
- **Homes.com** is experiencing phenomenal traffic growth, with end users preferring it over competitors and agents finding significant value, indicating strong demand and substantial growth potential as the company builds out its dedicated sales team.  **[CSGP_3393965_12]**

cf3d01bf3c1075678aca3a1f2a19019ea8dff3493fda38bafaa0e37634dd96e5

- **CoStar Group expects growth to accelerate in 2025** for its core businesses like CoStar Suite and LoopNet, due to improving market conditions and the reallocation of sales resources back to these core products.  **[CSGP_3403207_14]** **[CSGP_3403207_15]**
- **The company is significantly expanding its sales force**, which is expected to drive increased sales and growth in the coming years.  **[CSGP_3403207_19]** **[CSGP_3403207_15]**
- The **refocusing of the sales team on core products has already led to an uptick in sales**, indicating strong potential for future growth.  **[CSGP_3403207_15]**

8b6a33a31fcdb1c1d614a4e40c9878f07bb7748c12ece1cb2da81ab205a2cbcf

- **CoStar and LoopNet experienced softer performance in Q4, with net new bookings slightly behind last year ($286 million vs. $300 million). This softness in core businesses could indicate potential challenges ahead.**  **[CSGP_3374128_18]**
- **The company plans to invest approximately $1 billion in residential in 2024, nearly double the amount from 2023, mainly in marketing for Homes.com and OnTheMarket. This aggressive investment may pressure margins and profitability if returns are not as expected.**  **[CSGP_3374128_17]** **[CSGP_3374128_16]**
- **Management indicates limited flexibility to reduce marketing spend even if performance does not meet expectations, stating they've "put the accelerator to the floor" with little room to pull back, potentially increasing financial risk.**  **[CSGP_3374128_19]**

bb998c9a9830fce371239492000e836b70a7d4667d901c4f5088308e1c6e2975

- CoStar Group's Homes.com platform exceeded expectations, selling **8,000 memberships** at an average price of **$475 to $500 per month**, with **90%** of customers opting for annual agreements, demonstrating strong market adoption and revenue potential.  **[CSGP_3380282_14]** **[CSGP_3380282_15]**
- The company sees significant growth opportunity for Homes.com, aiming to increase memberships to **100,000** in the near term and ultimately reaching hundreds of thousands, leveraging a unique offering with little direct competition.  **[CSGP_3380282_14]** **[CSGP_3380282_15]**
- Elevated vacancy rates in the apartment rental market at **9.1%**, expected to persist for the next **2 to 3 years**, provide a favorable environment for CoStar's Apartments.com platform to drive advertising and revenue growth.  **[CSGP_3380282_20]**

b26719f136bfa8e3c3c8b6a55ada0a0dbb66c3201cc2521393f3a18971c12780

- **The initial surge in Homes.com memberships may not be sustainable**, as it was partly driven by specific events and conferences, and the company needs to **aggressively scale the Homes.com sales team** to maintain growth.  **[CSGP_3380282_15]**
- **Elevated vacancy rates in the apartment sector at 9.1%** and potential financial stress on apartment building owners could negatively impact Apartments.com's future revenue growth.  **[CSGP_3380282_20]**
- The company is experiencing a **sales substitution effect**, with sales shifting from their core commercial products to **Residential products**, potentially affecting revenue growth in their traditional businesses.  **[CSGP_3380282_9]**

e61bcd2428a37362e4ed47502cdee0dcfdf09b0b50860ee07178d6181c029933

CoStar Group Inc (CSGP)

Financials