CoStar Group 2023 Revenue Increased 13%, Apartments.com Crosses $1 Billion in Annualized Run Rate Revenue in January 2024, and Homes.com Crosses $1 Million in Annualized Daily Net New Sales Bookings in February 2024
- Strong financial performance for CoStar Group, Inc. in 2023, with revenue reaching $2.46 billion and net income of $375 million.
- Commercial information and marketplace businesses grew revenue by 14% in 2023, achieving 40% profit margins, the highest ever.
- Successful launch of Homes.com with substantial net new bookings and positive feedback from residential real estate agents.
- Outlook for 2024 is optimistic, with revenue expected to range from $2.75 billion to $2.77 billion, representing a 12% to 13% year-over-year growth.
- None.
Insights
The reported revenue growth of CoStar Group, Inc. highlights the resilience and adaptability of the company in what is described as the worst commercial real estate market in decades. The 13% year-over-year increase in annual revenue and the consistent quarterly revenue growth indicate a robust demand for CoStar's online real estate marketplaces and analytics services. This growth trajectory is particularly impressive given the broader economic context, where many sectors have faced significant challenges.
The expansion of Apartments.com and the successful launch of Homes.com are strategic moves that diversify CoStar's portfolio and tap into different segments of the real estate market. The rapid growth in unique monthly visitors and the implementation of a 'your listing, your lead' business model for Homes.com could disrupt traditional online real estate platforms by enhancing the value proposition to residential real estate agents. These initiatives could potentially lead to increased market share and sustained revenue growth.
However, the projected negative adjusted EBITDA for Q1 2024 suggests that the company's investment in its residential business is still in an early and financially intensive stage. Investors should monitor the balance between growth investments and profitability, as well as how these investments translate into long-term financial performance.
CoStar Group's financial performance, with a modest increase in net income and a slight rise in net income per share, reflects efficient operational management amidst revenue growth. The financial results also indicate controlled expenses relative to revenue, contributing to the company's highest profit margins to date. However, the forecasted negative adjusted EBITDA for the first quarter of 2024 and the relatively lower projected adjusted EBITDA for the full year suggest that the company is entering a phase of increased investment, particularly in its residential business.
Investors should consider the implications of CoStar's strategic investments on short-term profitability against the backdrop of potential long-term gains. The guidance for 2024, with an estimated 12% to 13% revenue growth, remains optimistic and aligns with the company's historical growth rates. The non-GAAP net income projections for 2024 indicate management's confidence in the company's ability to maintain profitability while scaling its operations. The anticipated tax rate of 26% for 2024 is also a critical factor for investors to consider in their valuation models.
CoStar Group's performance in the commercial real estate sector, achieving a 14% revenue growth and 40% profit margins despite market challenges, underscores the company's market leadership and the value of its information and analytics services. The real estate market, known for its cyclical nature, has faced significant headwinds, yet CoStar's ability to not only navigate but also grow in this environment is noteworthy.
The emphasis on the 'your listing, your lead' model for Homes.com is a strategic differentiator in the residential real estate market, which is traditionally dominated by a few major players. This approach could potentially increase the loyalty and retention of real estate agents, who are critical stakeholders in this industry. The exceptional growth of Apartments.com, maintaining the number one position in terms of traffic, suggests that CoStar's platforms are well-received by both real estate professionals and consumers.
For stakeholders, the expansion into the residential market with Homes.com represents a significant growth opportunity, but it also introduces new risks associated with entering a competitive and fragmented market. The success of this venture will depend on CoStar's ability to execute its business model effectively and to leverage its existing commercial real estate expertise to gain a foothold in the residential segment.
“Once again CoStar Group delivered exceptional results in our commercial information and marketplace businesses1 for the full year 2023, while at the same time devoting major time and resources towards launching the new Homes.com,” said Andy Florance, Founder and Chief Executive Officer of CoStar Group. “Our commercial information and marketplace businesses grew revenue by
“We launched our first marketing and branding campaign for Homes.com with four commercials in Super Bowl LVIII which was watched by an estimated 123 million viewers. The next day on Monday, February 12th we began monetizing Homes.com, selling subscriptions to residential real estate agents. Our, 'your listing, your lead' business model which puts the agent’s name and company on their listings and sends the consumer lead to them rather than to their competitors, not surprisingly, has been very well received. By Friday February 16th we were selling more than
“We believe Homes.com is the fastest growing residential property site in
“Apartments.com had a standout year in 2023 with revenue growth of
Year 2022-2023 Quarterly Results - Unaudited |
|||||||||
(in millions, except per share data) |
|||||||||
|
2022 |
|
2023 |
||||||
|
Q1 |
Q2 |
Q3 |
Q4 |
|
Q1 |
Q2 |
Q3 |
Q4 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Net income |
89 |
83 |
72 |
124 |
|
87 |
101 |
91 |
96 |
Net income per share - diluted |
0.23 |
0.21 |
0.18 |
0.31 |
|
0.21 |
0.25 |
0.22 |
0.24 |
Weighted average outstanding shares - diluted |
394 |
394 |
396 |
406 |
|
406 |
407 |
407 |
408 |
|
|
|
|
|
|
|
|
|
|
EBITDA |
158 |
140 |
129 |
155 |
|
98 |
105 |
89 |
98 |
Adjusted EBITDA |
178 |
159 |
153 |
182 |
|
123 |
127 |
112 |
130 |
Non-GAAP net income |
123 |
112 |
118 |
153 |
|
118 |
127 |
120 |
133 |
Non-GAAP net income per share - diluted |
0.31 |
0.28 |
0.30 |
0.38 |
|
0.29 |
0.31 |
0.30 |
0.33 |
2024 Outlook
The Company expects revenue in the range of
“2024 marks the turning point in the investment cycle for our residential business as we launched our first Homes.com membership product. Our adjusted EBITDA outlook for 2024 reflects the peak of our residential investment,” said Scott Wheeler, CFO of CoStar Group. “We expect adjusted EBITDA for the full year to range from
The Company expects full year 2024 non-GAAP net income per diluted share in a range of
The preceding forward-looking statements reflect CoStar Group’s expectations as of February 20, 2024, including forward-looking non-GAAP financial measures on a consolidated basis, based on current estimates, expectations, observations, and trends. Given the risk factors, rapidly evolving economic environment, and uncertainties and assumptions discussed in this release and in our quarterly reports on Form 10-Q and annual reports on Form 10-K, actual results may differ materially. Annualization of historical results from short periods of time or small sample sizes may differ materially from actual results realized in future periods and may not take into account other future market conditions that may negatively affect those results. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.
Reconciliations of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share to the most directly comparable GAAP measures are shown in detail below, along with definitions for those terms. A reconciliation of forward-looking non-GAAP guidance to the most directly comparable GAAP measure, net income, can be found within the tables included in this release.
Non-GAAP Financial Measures
For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Company’s financial condition and results of operations, please refer to the Company’s latest periodic report.
EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before interest income or expense, net and other income or expense, net; loss on debt extinguishment; income taxes; depreciation and amortization.
Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, and settlements and impairments incurred outside the Company’s ordinary course of business. Adjusted EBITDA margin represents adjusted EBITDA divided by revenues for the period.
Non-GAAP net income is a non-GAAP financial measure determined by adjusting GAAP net income attributable to CoStar Group for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside the Company's ordinary course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes. In 2024, the Company is assuming a
Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share. For periods with GAAP net losses and non-GAAP net income, the weighted average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.
Operating Metrics and Other Definitions
Net new bookings is calculated based on the annualized amount of change in the Company's sales bookings resulting from new subscription-based contracts, changes to existing subscription-based contracts and cancellations of subscription-based contracts for the period reported. Information regarding net new bookings is not comparable to, nor should it be substituted for, an analysis of the Company's revenues over time.
1 Commercial information and marketplace businesses are our consolidated financial position and results excluding the estimated impact of our residential brands which are Homes.com network and OnTheMarket, plc.
2 Our Residential Network consists of the following list of brands: Apartments.com, ApartmentFinder, FinderSites, ApartmentHomeLiving, WestSideRentals, ForRent, After55, CorporateHousing, ForRentUniversity, Move.com (ending in December 2022), Cozy.com, Off Campus Partners, Homes.com, Homesnap, CitySnap, and OnTheMarket, plc (beginning in January 2024).
Earnings Conference Call
Management will conduct a conference call to discuss the fourth quarter and full year 2023 results and the Company’s outlook at 5:00 PM ET on Tuesday, February 20, 2024. A live audio webcast of the conference will be available in listen-only mode through the Investors section of the CoStar Group website: https://investors.costargroup.com. A replay of the webcast audio will also be available in the Investors section of our website for a period of time following the call.
CoStar Group, Inc. |
|||||||||||||
Condensed Consolidated Statements of Operations - Unaudited |
|||||||||||||
(in millions, except per share data) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||
Revenues |
|
$ |
640.1 |
|
$ |
573.3 |
|
|
$ |
2,455.0 |
|
$ |
2,182.4 |
Cost of revenues |
|
|
136.3 |
|
|
109.2 |
|
|
|
491.5 |
|
|
414.0 |
Gross profit |
|
|
503.8 |
|
|
464.1 |
|
|
|
1,963.5 |
|
|
1,768.4 |
|
|
|
|
|
|
|
|
|
|||||
Operating expenses: |
|
|
|
|
|
|
|
|
|||||
Selling and marketing (excluding customer base amortization) |
|
|
246.7 |
|
|
173.5 |
|
|
|
989.9 |
|
|
684.2 |
Software development |
|
|
69.8 |
|
|
58.4 |
|
|
|
267.6 |
|
|
220.9 |
General and administrative |
|
|
107.1 |
|
|
92.1 |
|
|
|
381.5 |
|
|
338.7 |
Customer base amortization |
|
|
10.9 |
|
|
12.9 |
|
|
|
42.2 |
|
|
73.6 |
|
|
|
434.5 |
|
|
336.9 |
|
|
|
1,681.2 |
|
|
1,317.4 |
Income from operations |
|
|
69.3 |
|
|
127.2 |
|
|
|
282.3 |
|
|
451.0 |
Interest income, net |
|
|
59.7 |
|
|
32.6 |
|
|
|
213.6 |
|
|
32.1 |
Other income (expense), net |
|
|
3.7 |
|
|
(0.2 |
) |
|
|
5.4 |
|
|
3.4 |
Income before income taxes |
|
|
132.7 |
|
|
159.6 |
|
|
|
501.3 |
|
|
486.5 |
Income tax expense |
|
|
36.3 |
|
|
35.2 |
|
|
|
126.6 |
|
|
117.0 |
Net income |
|
$ |
96.4 |
|
$ |
124.4 |
|
|
$ |
374.7 |
|
$ |
369.5 |
|
|
|
|
|
|
|
|
|
|||||
Net income per share — basic |
|
$ |
0.24 |
|
$ |
0.31 |
|
|
$ |
0.92 |
|
$ |
0.93 |
Net income per share — diluted |
|
$ |
0.24 |
|
$ |
0.31 |
|
|
$ |
0.92 |
|
$ |
0.93 |
|
|
|
|
|
|
|
|
|
|||||
Weighted-average outstanding shares — basic |
|
|
405.8 |
|
|
404.2 |
|
|
|
405.3 |
|
|
396.3 |
Weighted-average outstanding shares — diluted |
|
|
407.5 |
|
|
406.1 |
|
|
|
406.9 |
|
|
397.8 |
CoStar Group, Inc. |
||||||||||||||||
Reconciliation of Non-GAAP Financial Measures - Unaudited |
||||||||||||||||
(in millions, except per share data) |
||||||||||||||||
|
||||||||||||||||
Reconciliation of Net Income to Non-GAAP Net Income |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
|
$ |
96.4 |
|
|
$ |
124.4 |
|
|
$ |
374.7 |
|
|
$ |
369.5 |
|
Income tax expense |
|
|
36.3 |
|
|
|
35.2 |
|
|
|
126.6 |
|
|
|
117.0 |
|
Income before income taxes |
|
|
132.7 |
|
|
|
159.6 |
|
|
|
501.3 |
|
|
|
486.5 |
|
Amortization of acquired intangible assets |
|
|
19.3 |
|
|
|
20.0 |
|
|
|
73.7 |
|
|
|
102.6 |
|
Stock-based compensation expense |
|
|
21.2 |
|
|
|
21.1 |
|
|
|
85.0 |
|
|
|
75.2 |
|
Acquisition and integration related costs |
|
|
10.7 |
|
|
|
2.2 |
|
|
|
12.9 |
|
|
|
5.4 |
|
Restructuring and related costs |
|
|
0.2 |
|
|
|
2.0 |
|
|
|
4.1 |
|
|
|
2.2 |
|
Settlements and impairments |
|
|
— |
|
|
|
2.0 |
|
|
|
(0.1 |
) |
|
|
6.1 |
|
Other expense, net |
|
|
(3.8 |
) |
|
|
— |
|
|
|
(3.8 |
) |
|
|
6.2 |
|
Non-GAAP income before income taxes |
|
|
180.3 |
|
|
|
206.9 |
|
|
|
673.0 |
|
|
|
684.2 |
|
Assumed rate for income tax expense(1) |
|
|
26 |
% |
|
|
26 |
% |
|
|
26 |
% |
|
|
26 |
% |
Assumed provision for income tax expense |
|
|
(46.9 |
) |
|
|
(53.8 |
) |
|
|
(175.0 |
) |
|
|
(177.9 |
) |
Non-GAAP net income |
|
$ |
133.4 |
|
|
$ |
153.1 |
|
|
$ |
498.0 |
|
|
$ |
506.3 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share - diluted |
|
$ |
0.24 |
|
|
$ |
0.31 |
|
|
$ |
0.92 |
|
|
$ |
0.93 |
|
Non-GAAP net income per share - diluted |
|
$ |
0.33 |
|
|
$ |
0.38 |
|
|
$ |
1.22 |
|
|
$ |
1.27 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average outstanding shares - basic |
|
|
405.8 |
|
|
|
404.2 |
|
|
|
405.3 |
|
|
|
396.3 |
|
Weighted average outstanding shares - diluted |
|
|
407.5 |
|
|
|
406.1 |
|
|
|
406.9 |
|
|
|
397.8 |
|
__________________________ |
||||||||||||||||
(1) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period. |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
|
$ |
96.4 |
|
|
$ |
124.4 |
|
|
$ |
374.7 |
|
|
$ |
369.5 |
|
Amortization of acquired intangible assets in cost of revenues |
|
|
8.4 |
|
|
|
7.0 |
|
|
|
31.5 |
|
|
|
29.0 |
|
Amortization of acquired intangible assets in operating expenses |
|
|
10.9 |
|
|
|
12.9 |
|
|
|
42.2 |
|
|
|
73.6 |
|
Depreciation and other amortization |
|
|
9.4 |
|
|
|
7.9 |
|
|
|
33.8 |
|
|
|
29.1 |
|
Interest income, net |
|
|
(59.7 |
) |
|
|
(32.6 |
) |
|
|
(213.6 |
) |
|
|
(32.1 |
) |
Other (income) expense, net |
|
|
(3.7 |
) |
|
|
0.2 |
|
|
|
(5.4 |
) |
|
|
(3.4 |
) |
Income tax expense |
|
|
36.3 |
|
|
|
35.2 |
|
|
|
126.6 |
|
|
|
117.0 |
|
EBITDA |
|
$ |
98.0 |
|
|
$ |
155.0 |
|
|
$ |
389.8 |
|
|
$ |
582.7 |
|
Stock-based compensation expense |
|
|
21.2 |
|
|
|
21.1 |
|
|
|
85.0 |
|
|
|
75.2 |
|
Acquisition and integration related costs |
|
|
10.7 |
|
|
|
2.2 |
|
|
|
12.9 |
|
|
|
5.4 |
|
Restructuring and related costs |
|
|
0.2 |
|
|
|
2.0 |
|
|
|
4.1 |
|
|
|
2.2 |
|
Settlements and impairments |
|
|
— |
|
|
|
2.0 |
|
|
|
(0.1 |
) |
|
|
6.1 |
|
Adjusted EBITDA |
|
$ |
130.1 |
|
|
$ |
182.3 |
|
|
$ |
491.7 |
|
|
$ |
671.6 |
|
CoStar Group, Inc. |
||||||||
Condensed Consolidated Balance Sheets - Unaudited |
||||||||
(in millions) |
||||||||
|
|
|
|
|
||||
|
|
December 31, 2023 |
|
December 31, 2022 |
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
5,215.9 |
|
|
$ |
4,968.0 |
|
Accounts receivable |
|
|
213.2 |
|
|
|
166.1 |
|
Less: Allowance for credit losses |
|
|
(23.2 |
) |
|
|
(12.2 |
) |
Accounts receivable, net |
|
|
190.0 |
|
|
|
153.9 |
|
Prepaid expenses and other current assets |
|
|
70.2 |
|
|
|
64.0 |
|
Total current assets |
|
|
5,476.1 |
|
|
|
5,185.9 |
|
|
|
|
|
|
||||
Deferred income taxes, net |
|
|
4.3 |
|
|
|
9.7 |
|
Property and equipment, net |
|
|
472.2 |
|
|
|
321.3 |
|
Lease right-of-use assets |
|
|
79.8 |
|
|
|
80.4 |
|
Goodwill |
|
|
2,386.2 |
|
|
|
2,314.8 |
|
Intangible assets, net |
|
|
313.7 |
|
|
|
329.3 |
|
Deferred commission costs, net |
|
|
167.7 |
|
|
|
142.5 |
|
Deposits and other assets |
|
|
17.7 |
|
|
|
16.6 |
|
Income tax receivable |
|
|
2.0 |
|
|
|
2.0 |
|
Total assets |
|
$ |
8,919.7 |
|
|
$ |
8,402.5 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
|
23.1 |
|
|
|
28.6 |
|
Accrued wages and commissions |
|
|
117.8 |
|
|
|
105.0 |
|
Accrued expenses |
|
|
163.0 |
|
|
|
89.1 |
|
Income taxes payable |
|
|
7.7 |
|
|
|
10.4 |
|
Lease liabilities |
|
|
40.0 |
|
|
|
36.0 |
|
Deferred revenue |
|
|
104.2 |
|
|
|
103.6 |
|
Total current liabilities |
|
|
455.8 |
|
|
|
372.7 |
|
|
|
|
|
|
||||
Long-term debt, net |
|
|
990.5 |
|
|
|
989.2 |
|
Deferred income taxes, net |
|
|
36.7 |
|
|
|
76.2 |
|
Income taxes payable |
|
|
18.2 |
|
|
|
14.0 |
|
Lease and other long-term liabilities |
|
|
79.9 |
|
|
|
80.3 |
|
Total liabilities |
|
$ |
1,581.1 |
|
|
$ |
1,532.4 |
|
|
|
|
|
|
||||
Total stockholders’ equity |
|
|
7,338.6 |
|
|
|
6,870.0 |
|
Total liabilities and stockholders’ equity |
|
$ |
8,919.7 |
|
|
$ |
8,402.5 |
|
CoStar Group, Inc. |
|||||||
Condensed Consolidated Statements of Cash Flows - Unaudited |
|||||||
(in millions) |
|||||||
|
|
||||||
|
Year Ended December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Operating activities: |
|
|
|
||||
Net income |
$ |
374.7 |
|
|
$ |
369.5 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
107.5 |
|
|
|
137.9 |
|
Amortization of deferred commissions costs |
|
95.2 |
|
|
|
76.1 |
|
Amortization of Senior Notes discount and issuance costs |
|
2.4 |
|
|
|
2.4 |
|
Non-cash lease expense |
|
30.0 |
|
|
|
38.5 |
|
Stock-based compensation expense |
|
85.0 |
|
|
|
75.2 |
|
Deferred income taxes, net |
|
(37.2 |
) |
|
|
(31.2 |
) |
Credit loss expense |
|
35.0 |
|
|
|
18.3 |
|
Other operating activities, net |
|
(3.2 |
) |
|
|
(2.4 |
) |
|
|
|
|
||||
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
||||
Accounts receivable |
|
(66.6 |
) |
|
|
(46.4 |
) |
Prepaid expenses and other current assets |
|
(16.2 |
) |
|
|
(17.9 |
) |
Deferred commissions |
|
(120.2 |
) |
|
|
(116.8 |
) |
Accounts payable and other liabilities |
|
33.9 |
|
|
|
23.2 |
|
Lease liabilities |
|
(39.2 |
) |
|
|
(37.4 |
) |
Income taxes payable, net |
|
10.7 |
|
|
|
(19.3 |
) |
Deferred revenue |
|
(1.3 |
) |
|
|
6.8 |
|
Other assets |
|
(1.0 |
) |
|
|
2.2 |
|
Net cash provided by operating activities |
|
489.5 |
|
|
|
478.7 |
|
|
|
|
|
||||
Investing activities: |
|
|
|
||||
Proceeds from sale and settlement of investments |
|
3.8 |
|
|
|
0.9 |
|
Proceeds from sale of property and equipment and other assets |
|
— |
|
|
|
30.1 |
|
Purchase and construction of Richmond assets |
|
(117.5 |
) |
|
|
(35.2 |
) |
Purchases of property and equipment and other assets |
|
(25.3 |
) |
|
|
(58.6 |
) |
Cash paid for acquisitions, net of cash acquired |
|
(99.6 |
) |
|
|
(6.3 |
) |
Net cash used in investing activities |
|
(238.6 |
) |
|
|
(69.1 |
) |
|
|
|
|
||||
Financing activities: |
|
|
|
||||
Payments of long-term debt assumed in acquisition |
|
— |
|
|
|
(2.2 |
) |
Repurchase of restricted stock to satisfy tax withholding obligations |
|
(26.4 |
) |
|
|
(23.0 |
) |
Proceeds from equity offering, net of transaction costs |
|
— |
|
|
|
745.7 |
|
Proceeds from exercise of stock options and employee stock purchase plan |
|
23.4 |
|
|
|
13.5 |
|
Other financing activities |
|
(0.7 |
) |
|
|
— |
|
Net cash (used in) provided by financing activities |
|
(3.7 |
) |
|
|
734.0 |
|
|
|
|
|
||||
Effect of foreign currency exchange rates on cash and cash equivalents |
|
0.7 |
|
|
|
(2.7 |
) |
Net increase in cash and cash equivalents |
|
247.9 |
|
|
|
1,140.9 |
|
Cash and cash equivalents at beginning of year |
|
4,968.0 |
|
|
|
3,827.1 |
|
Cash and cash equivalents at end of year |
$ |
5,215.9 |
|
|
$ |
4,968.0 |
|
CoStar Group, Inc. |
|||||||||||||||||
Disaggregated Revenues - Unaudited |
|||||||||||||||||
(in millions) |
|||||||||||||||||
|
|
||||||||||||||||
|
Three Months Ended December 31, |
||||||||||||||||
|
2023 |
|
2022 |
||||||||||||||
|
|
|
International |
|
Total |
|
|
|
International |
|
Total |
||||||
CoStar |
$ |
227.3 |
|
$ |
10.4 |
|
$ |
237.7 |
|
$ |
210.0 |
|
$ |
9.0 |
|
$ |
219.0 |
Information Services |
|
32.9 |
|
|
9.8 |
|
|
42.7 |
|
|
31.7 |
|
|
9.0 |
|
|
40.7 |
Multifamily |
|
243.8 |
|
|
— |
|
|
243.8 |
|
|
198.0 |
|
|
— |
|
|
198.0 |
LoopNet |
|
65.9 |
|
|
2.6 |
|
|
68.5 |
|
|
59.3 |
|
|
2.0 |
|
|
61.3 |
Residential |
|
7.8 |
|
|
2.2 |
|
|
10.0 |
|
|
16.2 |
|
|
— |
|
|
16.2 |
Other Marketplaces |
|
37.4 |
|
|
— |
|
|
37.4 |
|
|
38.1 |
|
|
— |
|
|
38.1 |
Total revenues |
$ |
615.1 |
|
$ |
25.0 |
|
$ |
640.1 |
|
$ |
553.3 |
|
$ |
20.0 |
|
$ |
573.3 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31, |
||||||||||||||||
|
2023 |
|
2022 |
||||||||||||||
|
|
|
International |
|
Total |
|
|
|
International |
|
Total |
||||||
CoStar |
$ |
886.0 |
|
$ |
39.2 |
|
$ |
925.2 |
|
$ |
800.2 |
|
$ |
36.8 |
|
$ |
837.0 |
Information Services |
|
132.4 |
|
|
38.5 |
|
|
170.9 |
|
|
125.0 |
|
|
32.4 |
|
|
157.4 |
Multifamily |
|
914.2 |
|
|
— |
|
|
914.2 |
|
|
745.4 |
|
|
— |
|
|
745.4 |
LoopNet |
|
255.4 |
|
|
9.4 |
|
|
264.8 |
|
|
223.7 |
|
|
7.2 |
|
|
230.9 |
Residential |
|
43.9 |
|
|
2.2 |
|
|
46.1 |
|
|
73.7 |
|
|
— |
|
|
73.7 |
Other Marketplaces |
|
133.8 |
|
|
— |
|
|
133.8 |
|
|
138.0 |
|
|
— |
|
|
138.0 |
Total revenues |
$ |
2,365.7 |
|
$ |
89.3 |
|
$ |
2,455.0 |
|
$ |
2,106.0 |
|
$ |
76.4 |
|
$ |
2,182.4 |
CoStar Group, Inc. |
|||||||||||||
Results of Segments - Unaudited |
|||||||||||||
(in millions) |
|||||||||||||
|
|
|
|
|
|
|
|
||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||
EBITDA |
|
|
|
|
|
|
|
||||||
|
$ |
112.8 |
|
|
$ |
154.8 |
|
$ |
402.9 |
|
|
$ |
577.3 |
International |
|
(14.8 |
) |
|
|
0.3 |
|
|
(13.2 |
) |
|
|
5.4 |
Total EBITDA |
$ |
98.0 |
|
|
$ |
155.1 |
|
$ |
389.7 |
|
|
$ |
582.7 |
CoStar Group, Inc. |
||||||||||
Reconciliation of Non-GAAP Financial Measures with Quarterly Results - Unaudited |
||||||||||
(in millions, except per share data) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Non-GAAP Net Income |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2023 |
||||||
|
|
Q1 |
Q2 |
Q3 |
Q4 |
|
Q1 |
Q2 |
Q3 |
Q4 |
Net income |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
32.1 |
24.7 |
25.1 |
35.2 |
|
29.2 |
31.1 |
29.9 |
36.3 |
Income before income taxes |
|
121.4 |
108.1 |
97.4 |
159.5 |
|
116.4 |
131.7 |
120.5 |
132.7 |
Amortization of acquired intangible assets |
|
23.2 |
22.8 |
36.6 |
20.0 |
|
17.7 |
18.0 |
18.7 |
19.3 |
Stock-based compensation expense |
|
17.8 |
18.1 |
18.1 |
21.1 |
|
20.0 |
21.8 |
21.9 |
21.2 |
Acquisition and integration related costs |
|
1.6 |
0.5 |
1.1 |
2.2 |
|
1.7 |
(0.2) |
0.8 |
10.7 |
Restructuring and related costs |
|
— |
— |
0.2 |
2.0 |
|
3.4 |
(0.1) |
0.5 |
0.2 |
Settlements and impairments |
|
— |
— |
4.1 |
2.0 |
|
(0.1) |
— |
— |
— |
Other expense (income), net |
|
2.0 |
2.1 |
2.1 |
— |
|
— |
— |
— |
(3.8) |
Non-GAAP income before income taxes(1) |
|
166.1 |
151.6 |
159.6 |
206.7 |
|
159.1 |
171.2 |
162.4 |
180.3 |
Assumed rate for income tax expense (2) |
|
|
|
|
|
|
|
|
|
|
Assumed provision for income tax expense |
|
(43.2) |
(39.4) |
(41.5) |
(53.8) |
|
(41.4) |
(44.5) |
(42.2) |
(46.9) |
Non-GAAP net income(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding shares - basic |
|
392.9 |
393.3 |
394.7 |
404.2 |
|
404.5 |
405.4 |
405.6 |
405.8 |
Weighted average outstanding shares - diluted |
|
394.2 |
394.5 |
396.2 |
406.1 |
|
406.2 |
406.8 |
407.2 |
407.5 |
__________________________ |
||||||||||
(1) Totals may not foot due to rounding. |
||||||||||
(2) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period. |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to EBITDA and Adjusted EBITDA |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2023 |
||||||
|
|
Q1 |
Q2 |
Q3 |
Q4 |
|
Q1 |
Q2 |
Q3 |
Q4 |
Net income |
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
23.2 |
22.8 |
36.6 |
20.0 |
|
17.7 |
18.0 |
18.7 |
19.3 |
Depreciation and other amortization |
|
7.0 |
7.0 |
7.2 |
7.9 |
|
7.9 |
8.1 |
8.4 |
9.4 |
Interest expense (income), net |
|
7.7 |
3.4 |
(10.7) |
(32.6) |
|
(43.5) |
(51.9) |
(58.4) |
(59.7) |
Other (income) expense, net |
|
(0.9) |
(1.3) |
(1.4) |
0.2 |
|
(0.6) |
(0.6) |
(0.5) |
(3.7) |
Income tax expense |
|
32.1 |
24.7 |
25.1 |
35.2 |
|
29.2 |
31.1 |
29.9 |
36.3 |
EBITDA(1) |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
17.8 |
18.1 |
18.1 |
21.1 |
|
20.0 |
21.8 |
21.9 |
21.2 |
Acquisition and integration related costs |
|
1.6 |
0.5 |
1.1 |
2.2 |
|
1.7 |
(0.2) |
0.8 |
10.7 |
Restructuring and related costs |
|
— |
— |
0.2 |
2.0 |
|
3.4 |
(0.1) |
0.5 |
0.2 |
Settlements and impairments |
|
— |
— |
4.1 |
2.0 |
|
(0.1) |
— |
— |
— |
Adjusted EBITDA(1) |
|
|
|
|
|
|
|
|
|
|
__________________________ |
||||||||||
(1) Totals may not foot due to rounding. |
||||||||||
CoStar Group, Inc. |
|||||||||||||||
Reconciliation of Forward-Looking Guidance - Unaudited |
|||||||||||||||
(in millions, except per share data) |
|||||||||||||||
|
|||||||||||||||
Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income |
|||||||||||||||
|
|
|
|
||||||||||||
|
Guidance Range |
|
Guidance Range |
||||||||||||
|
For the Three Months |
|
For the Year Ending |
||||||||||||
|
Ending March 31, 2024 |
|
December 31, 2024 |
||||||||||||
|
Low |
|
High |
|
Low |
|
High |
||||||||
Net income |
$ |
(5.0 |
) |
|
$ |
(2.0 |
) |
|
$ |
115.0 |
|
|
$ |
129.0 |
|
Income tax (benefit) expense |
|
(2.0 |
) |
|
|
(1.0 |
) |
|
|
40.0 |
|
|
|
46.0 |
|
Income before income taxes |
|
(7.0 |
) |
|
|
(3.0 |
) |
|
|
155.0 |
|
|
|
175.0 |
|
Amortization of acquired intangible assets |
|
18.0 |
|
|
|
18.0 |
|
|
|
59.0 |
|
|
|
59.0 |
|
Stock-based compensation expense |
|
24.0 |
|
|
|
24.0 |
|
|
|
99.0 |
|
|
|
99.0 |
|
Acquisition and integration related costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Restructuring and related costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Non-GAAP income before income taxes |
|
35.0 |
|
|
|
39.0 |
|
|
|
313.0 |
|
|
|
333.0 |
|
Assumed rate for income tax expense(1) |
|
26 |
% |
|
|
26 |
% |
|
|
26 |
% |
|
|
26 |
% |
Assumed provision for income tax expense |
|
(9.0 |
) |
|
|
(10.0 |
) |
|
|
(81.0 |
) |
|
|
(87.0 |
) |
Non-GAAP net income |
$ |
26.0 |
|
|
$ |
29.0 |
|
|
$ |
232.0 |
|
|
$ |
246.0 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share - diluted |
$ |
(0.01 |
) |
|
$ |
— |
|
|
$ |
0.28 |
|
|
$ |
0.32 |
|
Non-GAAP net income per share - diluted |
$ |
0.06 |
|
|
$ |
0.07 |
|
|
$ |
0.57 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average outstanding shares - diluted |
|
409.0 |
|
|
|
409.0 |
|
|
|
409.4 |
|
|
|
409.4 |
|
__________________________ |
|
|
|
|
|
|
|
||||||||
(1) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period. |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA |
|||||||||||||||
|
|
|
|
||||||||||||
|
Guidance Range |
|
Guidance Range |
||||||||||||
|
For the Three Months |
|
For the Year Ending |
||||||||||||
|
Ending March 31, 2024 |
|
December 31, 2024 |
||||||||||||
|
Low |
|
High |
|
Low |
|
High |
||||||||
Net income |
$ |
(5.0 |
) |
|
$ |
(2.0 |
) |
|
$ |
115.0 |
|
|
$ |
129.0 |
|
Amortization of acquired intangible assets |
|
18.0 |
|
|
|
18.0 |
|
|
|
59.0 |
|
|
|
59.0 |
|
Depreciation and other amortization |
|
12.0 |
|
|
|
12.0 |
|
|
|
53.0 |
|
|
|
53.0 |
|
Interest income, net |
|
(56.0 |
) |
|
|
(56.0 |
) |
|
|
(198.0 |
) |
|
|
(198.0 |
) |
Other (income) expense, net |
|
(3.0 |
) |
|
|
(3.0 |
) |
|
|
2.0 |
|
|
|
2.0 |
|
Income tax (benefit) expense |
|
(2.0 |
) |
|
|
(1.0 |
) |
|
|
40.0 |
|
|
|
46.0 |
|
Stock-based compensation expense |
|
24.0 |
|
|
|
24.0 |
|
|
|
99.0 |
|
|
|
99.0 |
|
Acquisition and integration related costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(12.0 |
) |
|
$ |
(8.0 |
) |
|
$ |
170.0 |
|
|
$ |
190.0 |
|
About CoStar Group
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with over twelve million monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the
This news release and the Company’s earnings conference call contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about CoStar Group's plans, objectives, expectations, beliefs and intentions and other statements including words such as “hope,” “anticipate,” “may,” “believe,” “expect,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology. Such statements are based upon the current beliefs and expectations of management of CoStar Group and are subject to many risks and uncertainties. Actual results may differ materially from the results anticipated in the forward-looking statements and the assumptions and estimates used as a basis for the forward-looking statements. The following factors, among others, could cause or contribute to such differences: the risk that the trends stated or implied by this release or in the earnings conference call cannot or will not be sustained at the current pace or may increase or decrease, including trends and expectations related to revenue, revenue growth, net income, non-GAAP net income, EBITDA, adjusted EBITDA, adjusted EBITDA margin, sales, net new bookings, site traffic and visitors, leads, and renewal rates; the risk that the Company is unable to sustain current Company-wide, CoStar, Apartments or LoopNet net new bookings; the risk that revenues for the first quarter and full year 2024 will not be as stated in this press release; the risk that net income for the first quarter and full year 2024 will not be as stated in this press release; the risk that EBITDA for the first quarter and full year 2024 will not be as stated in this press release; the risk that adjusted EBITDA for the first quarter and full year 2024 will not be as stated in this press release; the risk that non-GAAP net income and non-GAAP net income per diluted share for the first quarter and full year 2024 will not be as stated in this press release; the risk that we may not successfully integrate acquired businesses or assets and may not achieve anticipated benefits of an acquisition, including expected synergies; the risk that the tax rate estimates stated in this press release may change and the risk that we may experience declines in our revenues, revenue growth rates and profitability due to the impact of economic conditions on the real estate industry and our core customer base. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar Group’s filings from time to time with the Securities and Exchange Commission (the "SEC"), including in CoStar Group’s Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Report on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2023, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar Group’s other filings with the SEC (including Current Reports on Form 8-K) available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar Group on the date hereof, and CoStar Group assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240220853493/en/
Investor Relations:
Cyndi Eakin
Senior Vice President
CoStar Group Investor Relations
(202) 346-6784
ceakin@costar.com
News Media:
Matthew Blocher
Vice President
CoStar Group Corporate Marketing & Communications
(202) 346-6775
mblocher@costar.com
Source: CoStar Group
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