CoStar Group Inc
NASDAQ:CSGP
Earnings Call Analysis
Q4-2023 Analysis
CoStar Group Inc
CoStar Group seems to be on the brink of a transformative period, marked by its ambitious entrance into the residential real estate market through Homes.com. The company has highlighted the steep commissions charged by competitors such as Zillow and Realtor.com, which positions Homes.com's 'Your Listing, Your Lead' model as an appealing alternative for agents. With a basic membership revenue potential of over $2.5 billion and an overall market opportunity potentially reaching $10 billion, Homes.com could be the most successful launch in the company's history. The platform is gaining traction with agents, targeting an initial 500,000 out of 1.5 million, and growth is only expected to amass as it expands its sales teams and marketing efforts.
The acquisition of OnTheMarket in the UK, combined with an ambitious growth strategy, has seen substantial traffic growth, signaling CoStar Group's potential to reshape the UK residential portal landscape. With a growth in site traffic and leads each by 81%, the company aims to overtake competitors by providing value to agents frustrated with Rightmove's fees. In stark contrast to Rightmove's high-cost strategy, CoStar intends to offer an agent-friendly alternative, already growing the OnTheMarket listing count significantly in just two months and setting its sights on a $17 billion European residential market opportunity.
Apartments.com saw a 23% revenue growth, making it CoStar's first $1 billion revenue run rate business. The platform secured nearly twice as many advertiser communities as the nearest competitor, while CoStar saw an 11% growth in revenues, signaling strong adoption across varied customer segments including owners, lenders, and corporate tenants. A focused expansion into the mid-market and small property sectors presents a massive untapped opportunity, with the latter market alone estimated at nearly $7 billion.
CoStar Group's financial performance in 2023 showcased its resilience and foresight during periods of economic volatility. With a net income increase to $375 million, the company balanced major investment cycles with revenue growth. Their savvy capital management yielded impressive net interest income, aiding in bolstering the company's overall profitability. Moving into 2024, CoStar projects revenue growth of 12% to 13%, with full-year revenue expected in the range of $2.75 billion to $2.77 billion and full-year adjusted EBITDA margins forecasted around 7%. The first quarter of 2024 may see a slight dip into negative adjusted EBITDA due to brand marketing initiatives, but margins are anticipated to recover and grow in the latter part of the year. The peak net investment year for residential in 2024 is positioned to catapult the company into the next phase of profit growth.
Propelled by efforts in Apartments.com, CoStar's commercial business, and their residential initiatives, CoStar Group is forecasting a robust revenue range of $6.25 billion to $6.35 billion for 2024. The growth engine seems to be their residential segment, especially Homes.com, which could be a determining factor in the company's performance. Moreover, the company projects adjusted EBITDA margins to be between 42% to 43% for the year. However, the specific guidance for the first quarter of 2024 has not been detailed, with expectations to be discussed later in the earnings call.
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Discuss the fourth quarter and full year 2023 results of CoStar Group. Before I turn the call over to Andy Florance, CoStar's CEO and Founder; and Scott Wheeler, our CFO, I would like to review our safe harbor statement.
Certain portions of the discussion today may contain forward-looking statements, including the company's outlook and expectations for the first quarter and full year 2024 based on current beliefs and assumptions. Forward-looking statements involve many risks, uncertainties, assumptions, estimates and other factors that can cause actual results to differ materially from such statements.
Important factors that can cause actual results to differ include but are not limited to, those stated in CoStar Group's press release issued earlier today and in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q under the heading Risk Factors.
All forward-looking statements are based on the information available to CoStar on the date of this call. CoStar assumes no obligation to update these statements, whether as a result of new information, future events or otherwise. Reconciliation to the most directly comparable GAAP measure of any non-GAAP financial measure discussed on this call are shown in the detail in our press release issued today, along with the definitions for those terms. The press release is available on our website located at costargroup.com under Press Room.
As a reminder, today's conference call is being webcast, and a link is also available on our website under Investors. Please refer to today's press release on how to access the replay of this call.
And with that, I would like to turn the call over to our Founder and CEO, Andy Florance.
Fantastic job, Cyndi. Thank you. Good evening, everyone, and thank you for joining us for CoStar Group's Fourth Quarter and Year-End 2023 Earnings Call. Total revenue for the full year of '23 was $2.46 billion, a 13% increase over the full year of '22, coming in above the high end of our guidance range and above consensus estimates. Revenue for the fourth quarter of '23 was $640 million or 12% growth year-over-year. This is our 13th year in a row of double-digit revenue growth.
We turned in another very strong year in sales in '23, achieving our second highest net new bookings level ever of $286 million. This performance in the face of higher interest rates and demand shocks that kept property markets distressed in '23 demonstrates the resilience of our business. Our full year '23 adjusted EBITDA was $492 million and $130 million for the fourth quarter, ahead of both the high end of our guidance range and consensus estimates.
I'm proud to say that we achieved a major profit milestone in 2023 in our commercial real estate information and marketplace businesses as we deliver adjusted EBITDA margins of 40% for the full year. For the past 3 years, thousands of our team members have worked with professionalism and committed focus to build the new Homes.com the premier marketplace for buying, selling and renting homes in the United States.
We've conducted dozens of focus groups across the country listening to hundreds of agents, home buyers and home sellers, learning why they were so dissatisfied with the legacy offerings and what they hope for in a better residential portal. We heard loud and clear that brokers, agents, sellers, buyers and investors all dislike real estate portals that use agents listings as bait to draw in homebuyers and then sell them off to other agents as leads with exorbitant commission splits. We learned that home buyers buy a home in a community not in isolation, so they want quality, in-depth information on neighborhood schools, parks, restaurants and local culture.
Our product teams have designed what we believe is clearly the best residential real estate site in the world. The site is clean, powerful, intuitive, appealing and spam-free. Our software developers rose to the challenge and built a lightning-fast, reliable platform that met the design specifications perfectly. Good job, [ Jerry ] and [ Zack ] and crew.
Our content team, comprised of hundreds of photographers, drone pilots, writers, voiceover talent, musicians, geographers and video editors, captured the essence of tens of thousands of U.S. neighborhood schools and parks. Our team drove 2.6 million miles, captured 1.5 million images, shot 3.8 million video clips and conducted over 350,000 drone flights. This investment creates an experience that consumers love, strengthens our SEO traffic position and provides a significant advantage over competitive sites.
Our efforts to grow traffic on Homes.com in 2023 were a big success. Homes.com was the fastest-growing real estate website at the end of '23 with over 600% year-over-year growth in the fourth quarter, according to Google Analytics. Our residential network traffic in the fourth quarter totaled 95 million average monthly unique visitors, growing 94% year-over-year. We were easily in the second place in traffic by this measure, well ahead of the 66 million average monthly unique visitors that Realtor.com reported 2 weeks ago. Our largest competitors, Realtor and Zillow, reported either flat or declining traffic in the fourth quarter of '23. I believe we will be able to report even stronger traffic numbers in the near future.
After building the site and traffic for over 2 years, last week, we launched a massive marketing campaign for Homes.com with 4 commercials during Super Bowl -- during the Super Bowl, an event that was watched by an estimated 123 million viewers. We ran a clever Apartments.com commercial in the first quarter with invading aliens to set Jeff Goldblum up for a memorable cameo in the first Homes.com ad in the second quarter, connecting the 2 brands. In the spots, Dan Levy plays the nephew inheriting is Uncle's business Homes.com and he sets out to reinvent the company and make it better than ever. He is supported by his hesitant sidekick played by SNL's Heidi Gardner. The spots draw attention to the value of our neighbor and school data that we offer home shoppers.
The Super Bowl was only the kickoff. In the week following the Super Bowl, we generated an estimated 560 million impressions across prime broadcast TV, syndicated TV, cable TV, morning shows, late night shows, major streaming audio and video platforms and of course, on Google in various forms. During the course of the year, we will be in the Olympics, the Oscars, the Emmy's, March Madness, the U.S. Open, the Stanley Cup playoffs, Major League Baseball and much more. We believe that we will generate approximately 80 billion impressions for Homes.com and reach 90% of U.S. households with our message in 2024.
We believe that no other competitor is investing close to what we're investing in this effort. We believe we can grow share. We believe that we have a better product and can significantly shift share and create a very attractive ROI for investors. While we have excellent traffic numbers, we do not yet have the unaided awareness we need to sustain the top traffic position and to draw the volume of advertisers we seek. As we did with Apartments.com, our plan is to grow unaided awareness from the low single digits to more than 50%. That process will take time but we believe that will drive brand awareness, SEO, SEM efficiency, traffic, audience, customer demand and revenue.
On Monday, February 12, a day after the Super Bowl, we were ready to begin monetizing Homes.com selling memberships to agents a quarter earlier than we had previously communicated to you. As we did when we launched the new LoopNet, the new -- and the new Apartments.com, we deployed the entire CoStar Group sales force to sell Homes.com. Our goal is to catapult our growth forward and quickly capitalize on the momentum and exposure generated from our marketing campaign.
Our 1,000-plus person sales force gives us instant national reach with experienced salespeople that live in many of the very same neighborhoods as the 1.5 million residential property agents that we intend to reach. We trained the full sales team in January and rolled out very attractive incentive structures that reward our sellers to sell both homes and their primary brands like CoStar or Apartments with -- along with homes. The more they sell of both brands combined the more money they make.
In addition to leveraging the strength of our entire CoStar Group sales team, we are rapidly building a sales force dedicated to selling only Homes.com. We have accrued a vice president, sales managers and 100 sellers to date and intend to have over 300 account sales representatives in place by the end of the year. The response to our sales effort is phenomenal. From a standing start, we sold almost $5.2 million. It was $5 million half an hour ago. $5.2 million annualized subscription revenue in just a little over a week.
From a modest start on Monday, our sales climbed each day. And by Friday, we were selling $1.1 million in memberships in a single day. We sold more than 827 memberships so far, with approximately 90% of the agents selecting 12-month memberships, with the rest choosing a 6-month subscription. We've seen agents with larger portfolios signing up at price points in the thousands of dollars a month, so far topping out at 7,400 a month. We have proposals out at much higher price points.
We also have agents with just a listing or so signing up at price points of only $100 to $200 a month. It doesn't matter if you're an agent with a large portfolio or a small portfolio. Either way, we're charging a small fraction of the serious ridiculously high 30% to 40% of commissions being charged by Zillow and Realtor.com to agents. We have only demoed 0.02% of the agents out there at this point. If we maintain this pace, we could sell around $200 million in annual reoccurring revenue in our first 12 months of selling.
The great news is that agents are definitely willing to spend for advertising exposure and they absolutely love the Homes.com "Your Listing, Your Lead" business model. Our direct field sales team, telephone sales teams and e-commerce sales channels are all producing results. We are initially focused on approximately 500,000 of the 1.5 million agents in the country. The annual revenue potential of this initial pool of agents for a basic Homes.com membership is over $2.5 billion. Knowing that Apartments.com basic silver ads comprise around 25% of all Apartments.com listings, if the same ratio were to apply to Homes.com then the potential opportunity could be as high as $10 billion.
Overall, I'm very proud of what the team has worked so hard to accomplish with Homes.com in only 3 years and believe it will be the most successful product launch in CoStar Group history. This coming year also marks a turning point as we've reached the peak year of our residential investment. With sales and revenue growing in the months ahead, we expect overall company profit levels to increase each quarter throughout the year and for the foreseeable future.
In December, we successfully closed our acquisition of OnTheMarket in United Kingdom for GBP 100 million. We believe that at the time of the acquisition OnTheMarket -- we believe that at the time of the acquisition, OnTheMarket was one of the top 3 residential portals in the U.K. GBP 100 million is 2% of the current leading portal Rightmove's GBP 4.4 billion market cap. Rightmove currently has significantly more traffic than OnTheMarket. So a top priority for us is to grow the appeal of the site for homebuyers and sellers and grow traffic.
Just one month in, we're making huge progress increasing January 2024 site traffic to OnTheMarket by 81% year-over-year, according to Google Analytics. We didn't waste time. We believe that we are now the fastest-growing residential portal in the U.K. As our traffic has grown, our leads have also grown 81% since December of 2023.
Rightmove announced at the recent Investor Day that they plan to grow revenue per agent by 42% to over GBP 2,000 per agent per month over the next 5 years. That is 10x what OnTheMarket charges agents today. Rightmove is also committed to maintaining at least 70% profit margin levels through 2028, leaving them a little room for investing in product and technology. You simply cannot make this stuff up, but you have to love it.
In sharp contrast, we plan to continue CoStar's long-standing strategy of investing and partnering with agents in the industry to generate and attract high-intent leads at a fraction of the cost of other U.K. portals while still achieving an attractive margin. Agents are telling us that they're in search for an alternative to Rightmove's unfriendly agent listing fees and are supportive of OnTheMarket. Since acquisition, we have added over 1,000 agent advertisers and 57,000 listings to the site, again, in a matter of 2 months.
Our long-term intention is to create the #1 property portal in the U.K. by combining CoStar's marketing and traffic generation expertise, the market-leading technology we have developed in Homes.com, CoStar's research and content generation capabilities and the strength of our established commercial real estate platform in the U.K. The European residential market opportunity is estimated to be $17 billion, and we intend to build and expand our share of the residential opportunity in Europe, beginning with OnTheMarket.
Apartments.com had a phenomenal year. Revenue for the year was $914 million or 23% growth over '22. This is almost $170 million of incremental annual revenue, the largest contribution ever for any of our brands. As of January this year, Apartments.com is now not only the largest business by revenue at CoStar, but also officially our first $1 billion revenue run rate business. But here comes CoStar right behind it, and then Homes.
The sales team delivered exceptional results at Apartments.com in '23, with annualized net new bookings growing 34% over '22. We now have almost 71,000 communities advertising their availabilities on Apartments.com, which is 11% above the fourth quarter of '22 and almost twice that of our nearest competitor. Our highly productive sales team conducted over 623,000 quality meetings in '23, which was 37% higher than in 2022 and a new record. Our customers love our sales team, rewarding them with a 94% -- 94 Net Promoter Score rating for the full year of 2023.
We continue to expand our mid-market sales effort by growing our sales team and developing targeted product offerings that suit the needs of midsized communities. Net productivity for our sales team increased by 14% in 2023 as compared to 2022, which resulted in a 44% growth in properties under 50 units advertising on Apartments.com. The opportunity in the small property sector is massive at almost $7 billion, and our penetration in this sector is still below 5%.
Our award-winning marketing campaign featuring the wonderful and very funny Jeff Goldblum as Brad Bellflower, inventor of the Apartminternet, entertained audiences and delivered over 12 billion media impressions and almost 1 billion visits to our websites during the year. We jump-started our 2024 media campaign with a Super Bowl ad. This is year 10 of our brand-building marketing campaign since we launched Apartments.com back in 2015.
This consistent long-term brand marketing strategy continues to prove successful as we finished the year with 52% unaided brand awareness with renters in the fourth quarter, 6 percentage points above our closest competitor. Based on recent study by market research for Market Connections, industry decision-makers representing 15,000 communities named Apartments.com as the most widely used advertising solution at 74%. The research also found that Apartments.com was the most well-known advertising solution, beating our closest competitor by 25%.
The Apartments.com brand is stronger than it's ever been, delivering almost 1 billion visits to our websites and 43 million average monthly unique visitors during 2023 according to Google Analytics. Our customers care about the number of potential renters utilizing our site every month to find a place to live, making unique visitors a key metric. For the past 8 quarters in a row, Apartments.com held the #1 position in terms of monthly average unique visitors when comparing to our traffic to Zillow's publicly disclosed average monthly unique visitors.
Overall economic conditions are expected to remain favorable for rental property advertising. Vacancy rates increased in 2023 for 3- to 5-star properties by 160 basis points to 9.1% and are expected to increase in 2024 as new unit deliveries are expected to remain high in 2024 at approximately 470,000 units. We expect to see Apartments.com generate strong double-digit revenue growth in 2024 somewhere in the high teens or more, which is balanced to some degree by the level of Homes.com sales effort this top-performing advertising juggernaut delivers in 2024.
CoStar delivered another strong quarter with revenues of $925 million and 11% year-over-year growth rate. Fourth quarter revenue grew 8% year-over-year to $238 million. We have never seen this level of positive revenue growth for CoStar while we're at the bottom of a severe property market downturn. The strength of CoStar continues to be our ability to expand the information content and analytic capabilities in the product to diversify into bigger and broader customer sets like owners, lenders and corporate tenants.
In '23, we sold twice as much to the owner, lender and corporate tenant sectors than we did to brokers. Net sales in the fourth quarter to owner, lender and tenant customers grew almost 30% compared to the third quarter of this year. The CoStar lender product had an exceptional year in '23, nearly doubling our customer base and delivering over 5x the revenue that we realized in '22. We now have over 1,000 active users for our lender product. Our opportunity pipeline is large, with over 300 institutions progressing through our sales process.
Our competitive data advantage has helped us win virtually every deal versus the main competitors in this space, including winning 7 of the largest CRE lenders in the industry. Looking ahead, there is significant opportunity to expand the CoStar lender addressable market beyond our initial focus on depository institutions. As regional banks and credit unions tighten up their credit lending requirements, or commercial earning requirements, private lenders are stepping in to fill the void.
We believe the total addressable market for our expanded target customer set is over $600 million. We are currently serving less than 15% of this opportunity and have plans to increase our sales and product teams to accelerate our growth next year. We released our hospitality benchmarking product in the CoStar platform in '23 and are rapidly migrating our STR customer base into the CoStar environment. Over 600 customers are now using the benchmark product in CoStar, with the remaining customers to be migrated in the first half of '24.
More than 18,000 users are now in CoStar, managing their hotel's performance and optimizing the revenue through the reimagined tools and additional analytic capabilities. As a result of the movement of STR benchmarking at CoStar, revenues from our hospitality benchmark subscriptions will now be reported as part of CoStar, similar to our integrated approach of our lender products for financial institutions being CoStar. The transition of STR benchmarking to CoStar in '24 is a major milestone for our road map to build the full suite of STR product capabilities in CoStar. We plan to incorporate forward-booking information, complete P&L benchmarking and international market performance this year and the next.
STR overall had an incredible year. '23 revenue grew 13% over last year, delivering the highest annual ever result since we brought -- since we bought STR in '19. The team had a record sales quarter to end the year, growing 54% over the fourth quarter of last year. Subscription revenue grew 17% and 23% over the prior year and now makes up 81% of the overall revenue, the highest percentage since the acquisition. STR's quarterly renewal rate is now in a very impressive 98%.
With the full capability of CoStar and STR combined, we expect to unlike -- unlock increased value for our customers and grow strong double-digit revenue towards what we believe is a $300 million hospitality market opportunity. Overall, we remain very confident in the strength and value of CoStar's platform and our growth performance in a downturn. Renewal rates for CoStar remain rock solid at 92% and we're seeing early indications of increased leasing and sales activity as we move into the first quarter of 2024. Although it's too early to call a recovery in the property markets, we expect solid mid-single-digit revenue growth from CoStar in '24.
LoopNet revenue was $265 million in '23, up 15% year-over-year and at the high end of our guidance range. Signature Listings -- Signature Ad listings were up 11% in the fourth quarter, delivering more traffic and leads to our customers. International revenue in the fourth quarter was up 33% and net new bookings were up 186% over the fourth quarter of '22. LoopNet continues to be the #1 listing site for commercial properties. Average monthly unique visitors to the global network in the fourth quarter were up 11% year-over-year and was 7x the traffic of the next largest competitor.
In the U.K., LoopNet is now the #1 dedicated commercial property marketplace by traffic after launching only a little over a year ago. We continue to expand internationally given our success to date and the size of the opportunity. We plan to launch LoopNet in France and Spain in 2024. 2023 was a year of growth for the LoopNet sales team. At the end of '22, only 40% of the sales were managed by LoopNet-dedicated sales representatives. And we've now effectively transitioned to 80% of those accounts from CoStar reps to LoopNet reps.
The LoopNet sales team is focused on ramping up activity, face-to-face meetings and NPS scores following the success formula of Apartments.com. As a result, we expect to deliver increased sales productivity and bookings as we move through 2024.
Ten-X continues to demonstrate the value of our digital sales platform for our commercial properties. In the year when sales transactions were down 49%, Ten-X brought $4.5 billion in assets to the platform, which was a modest decline of 9% relative to the market's steeper decline. We delivered a 52% trade rate in '23, nearly double the off-line trade rate, but below the rates we achieved in '22.
Overall, Ten-X revenue finished the year around 20% below prior year levels. Despite this decline, we increased our share of property sales in the $1 million to $10 million asset category during the year, moving more transactions from offline to online. The market outlook for the coming year remains uncertain, although interest rates have stabilized in near term, bid-ask spreads and debt constraints remain a challenge.
Regardless of these uncertainties, in the first 45 days of 2024, our trade rate and number of bidders per asset have increased from the fourth quarter of '23 levels. There are still billions of dollars of transactions occurring each year in the $1 billion to $10 billion asset category, which we continue to pursue as part of what we believe is a $3 billion long-term market opportunity.
The real estate capital markets in the fourth quarter continue to be impacted by higher borrowing costs, tight lending standards and deteriorating real estate fundamentals. In '23, transaction volumes were down 49% and price declines range from 10% to 35% across all sectors. Banks continue to slow their loan growth as property fundamentals decline and delinquencies rise. With interest rates expected to decline later this year, current expectations are for sales volumes to increase compared to last year. We saw some early indications in January, with sales volumes rising 6.4%.
The office sector continues to be the most challenged, with 58 million square feet of negative absorption in '23. Absorption since the pandemic now sits at negative 178 million square feet, office attendance is 60% of what it was before 2020, though that understates demand since hybrid work requires higher peak use. The market sits at a record high, 13.5% vacancy rate. A silver lining is the decline in construction starts, which we predict will eventually result in a shortage of premium office space.
Since our 15-year lease at our Washington, D.C. headquarters location is set to expire in 2025, we assessed more than 25 viable sites in the Greater Washington, D.C. metro area. We ultimately decided to purchase a 5-star trophy LEED Platinum office building located at 1201 Wilson Boulevard in Arlington, Virginia. We were able to purchase the building and the land lease for a significant discount to both recent valuations and current replacement cost. We also received nearly $7 million in both tax and economic incentives.
While past performance does not ensure future performance, you might recall that back in 2010 during the great financial crisis, we acquired our 1331 L Street location for $42 million, a then significant discount to replacement cost, and sold it within 2 years in the sale leaseback for $101 million, more than twice what we bought it for. We are betting that the office market is at a nadir again. We will likely execute a sales leaseback on 1201 Wilson Boulevard at some point in the future.
The industrial sector has also seen a historic wave of new construction push vacancies up from all-time lows. But at 5.7%, industrial vacancies are still at half their peak levels. Industrial demand has remained positive, though, and the rise in vacancy should be mitigated by a pullback in construction starts in the second half of '23. The retail sector continued to be the best performing in the fourth quarter, with both positive absorption and limited new construction. The result was vacancy rates dropping to 4%, an all-time low. Conditions should remain healthy for retail, with under construction at near all-time level lows.
The U.S. hotel sector ended the year with RevPAR growth of 4.9%, outpacing inflation and being driven by ADR growth of 4.3% and occupancy growth of 0.6%. Robust group demand and corporate transient demand were the primary contributors to growth. RevPAR is expected to continue to outpace inflation in '24, with 4.1% growth projected. In the U.S. residential sector, mortgage rates have come down from 7.8% to 6.6%, but rates are still high enough to prevent homeowners from selling, creating low inventory of homes for sale and low levels of homes being sold. But if interest rates continue to drop, affordability will improve, and even a drop to 6% would mean home ownership would become affordable for an additional 37 million Americans.
In the context of a distressed commercial real estate market, CoStar turned in an outstanding performance in '23, growing revenue 13% with record levels of profitability in our CRE business. It is clear that CoStar Group's diversified subscription business is highly resilient in a distressed property cycle. We believe that we will improve profits and margins again in '24 to $1.1 billion in adjusted EBITDA with 42% margins.
Our entire team has worked extraordinarily hard in building the Homes.com platform and business. We believe that we just launched CoStar Group's next transformative billion-dollar business. In the conversations we are having with brokerage leaders and agents, they tell us they are 100% behind our "Your listing, Your Lead" business model, but gets better for brokers, agents, home buyers and home sellers. I am thrilled to see that support with $5.2 million in annualized subscription sales in just the first 6 business days of selling Homes.com. The first half of '24 is the peak investment for Homes.com and we believe profits and margins will start showing significant growth in the second half of '24.
After my brief remarks, I'm going to turn the call over to our Chief Financial Officer, Scott Wheeler. Are you still there, Scott?
Still here, ready to go. Thank you for those brief remarks.
You're welcome.
Okay. So clearly, 2023 was a very strong year for the company, but that sure feels like a long time ago, doesn't it? These last few weeks have really been like turning a page when you get into the launch of Homes.com, the advertising brand campaign, the selling efforts. I think 2024 is going to be a great year, I can already tell.
But first, let's wrap up on 2023. The full year revenue growth was an impressive 13% versus prior year, which was ahead of our guidance and forecast. What I found interesting was that 2023 was the 13th consecutive year of double-digit growth, and we grew 13%. Did you know that? And last year, when our 12th consecutive year of double-digit revenue growth, we grew 12%. I wonder what that means this year. We'll see. Let's not get ahead of ourselves, but we actually turned in a great revenue performance in 2023.
Profit results also came in above expectations, with full year adjusted EBITDA at $492 million and 20% margin, exceeding the high end of our guidance range. What I think most is impressive is that you can still see our core CoStar business delivering 40% profit margins and a record high 45% in the fourth quarter before you consider the investments we're making moving into the residential sector. I think it's important we keep an eye on the underlying strength of this business portfolio as we exit the investment phase of Homes.com particularly, and we'll expect profitability to increase, as Andy mentioned, once again as we move through 2024.
So looking at our revenue by our different businesses, Apartments.com grew 23% in the fourth quarter and the full year, in line with our expectations. Apartments.com added twice the amount of revenue in '23 than its nearest competitor and increased revenue in the fourth quarter of 23% sequentially over the third quarter, which demonstrates both the strength of our product platform and our 97% subscription model in Apartments.com.
Our competitors are still in the game of chasing transaction revenue, which is why their revenue cycle is up in the middle of the year and then drops back in the fourth quarter. These transactions sure feel good during an upswing in market demand, but will leave you weak and unable to invest in a cyclical downturn. We expect Apartments.com revenue growth rate somewhere in the 17% to 18% range for the full year of 2024 and we're estimating 20% revenue growth for the first quarter. We expect our renewal pricing levels to moderate this coming year as inflation in the economy has come down.
Also, we continue to grow aggressively in the smaller property space, which carries lower price points relative to institutional scale communities. We're going to see increased levels of productivity in 2024 for our large and more experienced sales force in Apartments. Now the question is, will this increased output benefit Apartments or Homes.com? So far, this sales team is proving very effective at selling both.
CoStar revenue grew 8% in the fourth quarter and 11% for the full year of 2023, at the top end of our full year guidance range. As Andy mentioned, in 2024, we will report STR benchmarking revenue in CoStar as the STR product is now fully integrated into the CoStar platform and customer migrations will be complete this year. Including our benchmarking revenue, we expect full year and first quarter CoStar revenue growth in the range of 11% to 12%. So in 2024, CoStar will become our second brand business producing over $1 billion in revenue. On a pro forma basis, adjusting for the STR revenue shift, we expect CoStar revenue growth of between 7% to 8%, consistent with what we indicated in our third quarter earnings call back in October.
LoopNet revenue grew 12% in the fourth quarter, exceeding our 11% guidance. Revenue for the full year was $265 million or 15% increase over prior year, at the top end of our guidance range of 14% to 15%. We expect to see first quarter LoopNet revenue growth in the range of 8% to 9% as the sales results for LoopNet in the fourth quarter were lower than earlier in the year following the full account transitions from CoStar to LoopNet. We expect our LoopNet sales team to make meaningful contributions to selling both LoopNet and Homes.com in 2024. So accordingly, our LoopNet 2024 forecast range assumes revenue growth in the mid-single-digit range.
Revenue from Information Services grew 9% for the full year as expected. As a reminder, Information Services includes STR, Real Estate Manager, our original lender products and a few smaller information-related products, Thomas Daily and Business Immo in Europe. In 2024, a big piece of this revenue, the STR benchmarking, will move up into CoStar. Also, as we continue to grow our integrated CoStar lender product, more and more of the original lender products residing in Information Services are also moving into CoStar.
This is good news, of course, as we are executing on our strategy to integrate all of the Information Services products inside the CoStar platform. When the dust settles on all this, we expect Information Services revenue for 2024 in the range of approximately $130 million to $135 million, with $33 million of revenue in the first quarter. Our Real Estate Manager business is now the largest single component of Information Services, which we expect to grow in the mid- to high single digits in 2024 for Real Estate Manager.
Other Marketplace revenue was $134 million for the full year of 2023, ahead of our expectations for the fourth quarter, with modestly higher transaction revenues from Ten-X. Our subscription marketplace businesses, lands and business for sale contributed solid double-digit growth as they do year in and year out. We expect similar outcomes in 2024, with revenue relatively flat to the 2023 overall and first quarter revenue a little below $30 million.
Our 2024 revenue outlook includes double-digit revenue growth in the subscription marketplace businesses and a rather conservative view, I must say, of Ten-X transaction revenue. We've not built any transaction market recovery assumption into 2024. So if a recovery does materialize in the months ahead, then we should benefit.
Residential revenue, I saved the best for last. I can finally talk about forward growth expectations for Homes.com. First, to round off on 2023, our residential revenue was $10 million in the fourth quarter and $44 million for the full year of 2023, in line with our expectations for the legacy Homesnap revenue and inclusive of a small amount of revenue from the OnTheMarket acquisition. Our 2024 residential revenue outlook includes 3 components, these are: Homes.com; OnTheMarket; and the legacy residential products formerly known as Homesnap.
Homes.com is generating revenue. I've been waiting 3 years to say that. I'm just going to have to say it again: Homes.com is generating revenue. I think it definitely felt better the second time. So it was exciting to see our first Homes.com membership product putting points on the sales board this year. We have every brand sales team in every city across the country competing to sell Homes.com, and this is certainly going to be fun to watch.
I think the CoStar team is a little bit salty still from having Apartments reach $1 billion in revenue first, and they are currently leading the Homes.com top-selling contest ahead of Apartments. What's fun is that every sales team, no matter how big or small, has a shot at victory. Pound for pound, I'm seeing Lands.com sales team is ahead of everyone in terms of net sales per person of Homes.com and their team is 1/10 the size of Apartments. Momentum is certainly building and all 9 of our brand sales teams have contributed net new sales for Homes.com.
Of course, it's very early in the year and with every salesperson in CoStar incentivized to sell both their core brand products as well as Homes.com, it's a bit challenging, as you might imagine, to pin down the sales and revenue outlook by brand this year. Will we sell more Homes.com or will we sell more of our commercial brand products? It's really too early to tell, but I believe we are going to sell a whole lot of both. It's a great problem to have and regardless of the specific mix of products we sell, we believe that 2024 will be the best net sales year in the company's history by a wide margin.
Well, let's look at what happened the last time we took this approach, which was back in February 2015 when we appointed the entire sales force at the launch of Apartments.com. As we came into 2015, our total net sales bookings for the company were growing around 15% year-over-year. In 2015, with everyone selling our new Apartments.com ad products in addition to their core-branded products, our net new bookings increased almost 80%, with sales of all brands growing year-over-year.
Now to parrot Mr. Florance a few moments ago, we all know that past performance is not indicative of future results. However, there are a number of factors working in our favor with Homes.com. We know the size of the residential market opportunity is multiple times bigger than multifamily. We just launched the biggest marketing campaign in real estate history, 4x the size of our Apartments.com initial marketing campaign. And nobody else in the industry is competing with a "Your Listing, Your Lead" business model that doesn't try to take agent commissions, but lets them buy advertising exposure to sell their listings. I think these are all very positive relative to our Apartments.com experience back in 2015.
So taking our best educated guess, our 2024 forecast assumes revenue contribution from Homes.com memberships in the $50 million to $60 million range in 2024, starting from 0 in the first quarter and exiting the year with an approximate $100 million quarterly run rate. Now you might think my forecast looks a bit wimpy as you keep hearing Andy talk about updating our sales efforts every minute over here. But one step at a time, we're just getting started.
We expect OnTheMarket, our new U.K. residential business, to deliver approximately $40 million in revenue in 2024. First quarter revenue is expected to be in the $10 million range. The results of OnTheMarket were insignificant to our overall financial results in 2023 as the acquisition closed in the middle of December. We expect legacy residential products to continue to decline in 2024 as we sell customers Homes.com memberships. We expect full year 2024 revenue of around $20 million from the legacy products.
So combining all the components of our residential business, our forecast assumes revenue in the range of $110 million to $120 million in 2024, starting the year with a little over $15 million in the first quarter and growing to over $40 million in the fourth quarter of 2024. Year-over-year total revenue growth is expected to be 150%, and year-over-year organic revenue growth in residential is around 70% in 2024.
So to wrap up on 2023, net income was $96 million for the fourth quarter and $375 million for all of 2023, an increase of around $5 million compared to 2022. It's nice to see net income improve while we are in a major investment cycle, and that's thanks to our net interest income, which was an impressive $220 million in 2023. We earned roughly 5% on around a $4.2 billion net cash balance for the year.
Let's talk about a few of our performance metrics. First, with our sales force, which totaled approximately 1,160 people at the end of the year, with modest increases in 2023 focused on our marketplace businesses of Apartments.com and LoopNet. Sales force expansion in 2024 will be primarily concentrated in our Homes.com residential business. Contract renewal rates were 90% in the fourth quarter of 2023. And these remain strong at 95% for customers who have been subscribers for 5 years or longer. Subscription revenue on annual contracts was 81% for the fourth quarter of 2022, up from 80% in the prior year.
Looking ahead to 2024, we expect full year revenue to range from $2.75 billion to $2.77 billion, implying an annual growth rate of between 12% and 13%. First quarter 2024 revenue is expected to range from $645 million to $650 million, representing revenue growth of 11% year-over-year at the midpoint. 2024 adjusted EBITDA is expected in the range of $170 million to $190 million, reflecting an adjusted EBITDA margin rate of around 7% for the entire year.
First quarter 2024 adjusted EBITDA is expected to dip slightly into negative territory as we launch our brand marketing campaign ahead of the revenue growth in Homes.com. We expect to see positive margins return after the first quarter and grow for the remainder of the year, with adjusted EBITDA margins in the 12% to 13% range in the second half of 2024 and exiting much higher than that.
Our financial strategy for 2024 is to once again drive operating leverage and profit generation in our commercial businesses while we fund our residential marketplace strategy. We expect to increase profit margins in our commercial portfolio, which should be generating approximately $1.1 billion of profit before investments in Homes.com and OnTheMarket in 2024.
We're off to a strong start with Homes.com sales this year, with plans to increase our total residential investment levels in 2024 to support the brand launch and build our sales capabilities. 2024 will be the peak net investment year for residential, which includes our full marketing campaign, OnTheMarket in the U.K. and our teams reaching full strength in content, technology and sales.
Our level of capital expenditures is expected to increase in 2024 from around $150 million in 2023 to around $800 million in 2024 as we enter the big construction years for our Richmond campus and at our new headquarters building in Arlington, Virginia. The operating capital apart from the building projects is expected in the $40 million to $45 million range in 2024, which is consistent with the same spending levels in 2023. Our forecast for net income -- net interest income is around $200 million for 2024, which takes into account our increased capital spend and the possible interest rate reductions in the years ahead.
In summary, I'm very proud of the exceptional results we delivered in 2023 during a year complicated by high interest rates, inflation and continued economic uncertainties. We remain focused on our strategic investment in residential markets while producing record profit levels in our established commercial businesses. With monetization of Homes.com this year, we are adding another strong double-digit growth revenue stream to our brand portfolio and moving past the peak of the residential investment cycle, and onto the next phase of profit growth and profitability improvement for the company.
Overall, we're making great progress towards our long-term revenue and profit objectives and remain confident in our ability to grow Homes.com to become yet another high-margin, billion dollar revenue business for CoStar.
Having said all that, I think it's time to turn the call back over to our operator for the question-and-answer session.
[Operator Instructions] Our first question comes from Pete Christiansen with Citi.
Andy, I guess, top of mind here, I appreciate the sales blitz as you're dedicating the whole team here to get Homes.com onto a great footing. What are you looking towards, I guess, throughout the year to start migrating all the sales activity back to a dedicated sales force? And how are you thinking about cost of acquisition, ongoing cost to serve from a marketing perspective here as you attract new agents to the platform?
Well, thank you for the question, Pete. I just wanted to update you since we came in here and began the call. We're now at $5.3 million. We've sold 58 more accounts.
You need to stop looking at that.
Yes, I think I'm addicted to that meter. So the -- yes. So we will engage the entire sales force throughout '24 on selling the product. To be honest with you, the whole sales force, I believe, wants to participate in selling the product, and I think it works best. So nothing sounds better than when you listen to a salesperson talking to a prospect and saying I'm a couple of blocks away. I just got another -- it doesn't look real.
So the -- it really is effective when someone -- when we can sign these 500,000 accounts to people right in their own neighborhoods. The salesperson can say, "Well, I'm 3 blocks away from your office. I'd come by tomorrow. That it works really well." So it will take us a full year to build up a dedicated Homes.com sales team. I do not believe that this has dramatically more -- I think it will be similar to any other product in terms of service and support.
It is like Apartments.com. You do have to touch base with the customers, make sure that they're well taken care of and that they understand the performance of their membership.
But I would say that in '25, you would begin to see the shifting back to the general group. But right now, we want speed of sales.
Our next question comes from Heather Balsky with Bank of America.
I appreciate it. So I realize it's a big year. You're excited by the launch. I'm excited to hear the next update on the bookings for Homes.com. But can you help us better understand the spend from here? You talked about this being the year of peak spending. So what should we expect kind of as we move out into '25, '26, '27? And the targets that you laid out for 2027, what are your thoughts on them today now that you've officially started to monetize Homes.com?
Thanks for the question, Heather. I'll give you just some context there. Like I mentioned, the peak net investment this year. As we finalize resource growth, obviously, in sales, you'll see some of those costs annualized forward into 2025 off 2024. But the rest of the cost base is now in 2024 doesn't really move much in the years ahead. So that's really how we're thinking about it, and we think we have plenty of investment here to now be growing the Homes.com business for a long, long time at really strong rates.
The update that you're looking forward to next quarter is going to be a fun one because we all want to start drawing those lines around the revenue growth for Homes and how that will perform, which obviously sets us on the track towards those 2027 goals. So I think we'll talk more about that next quarter, but we are still seeing traction towards 2027, and we're committed to still reaching those levels. Too early to tell yet on the revenue leverage rates for Homes.com, which make a big difference as you would expect.
With over a week of experience.
With only a week of experience. More to come, but thanks for the question.
Our next question comes from George Tong with Goldman Sachs.
You're investing approximately $1 billion in residential this year, which is nearly double the amount of spend from 2023. Can you discuss where the residential investments are going? And then from a margin perspective, we talked about how margins should improve in the back half. Could you give us a little bit more clarity on the margin cadence by quarter as you move through the year?
Sure, George. Let me take the margin cadence question. I mentioned that we'll be in the 12% to 13% in the second half. I think exiting the year, we'll be over 15%, probably 16% going out of the year. And then in the first quarter, we mentioned the minus $8 million to $12 million there, and then we'll take a step between first and third quarter and the second. So you see a steady sequential increase in the margin profile overall for the company.
When you look at where the investment going for residential, we've added OnTheMarket. And as you watched the announcements around what we're doing there, we committed to putting in around $50 million of marketing that right now has us moving up rather quickly with both listings, traffic and inching up closer towards the #2 position. So that's proving to be very valuable right now.
And then the rest of the investment is, as you would expect, it's in the Homes.com U.S. business, which is the biggest part is going to be our marketing investments and then followed by the teams that run our content research and technology. So those have been the biggest pieces all along. They'll continue to be the biggest pieces probably in that order as we go forward.
And we don't anticipate those growing in the out years. We anticipate them moderating. So we've probably been a bit more aggressive. We have been more aggressive in year 1 than we were with Apartments.com. Apartments.com took 2, 3 years to build up; this time, we went right at it.
Our next question comes from Alexei Gogolev with JPMorgan.
Just to clarify the previous comment, Andy. So do you feel like you are front-loading some of the investments that may have initially been planned for 2025 and 2026, you are front-loading it into 2024 in resi?
Well, given the fact that more than half of the investment is marketing between the United Kingdom and the United States, I think that's fair to say. So when you look back, I believe, in year 1, we spent $40 million in marketing on Apartments...
For branding. Yes.
For branding. So I think we're a touch more aggressive this time around, and that's an understatement. But we are doing that with, I think, a pretty sober eye on the ROI and what we hope to achieve. And I think that it's only a week of sales. It gives you an idea that there's a market there, there's a product there; and we think it will enable us to move faster than any competitor expected us to move.
Understood. Perfect. And Scott, could you help us reconcile the net new bookings figure? I fully recognize that it was a record figure for the year, $286 million. But could you talk a bit more about the dynamic in the fourth quarter and whether there was any cyclicality in there?
Yes. Certainly, we see a little bit in the fourth quarter cyclicality on those numbers. I think the $286 million this year was slightly behind the $300 million or so we made last year. Still as you look at the components, Apartments.com is delivering the strongest performance given the vacancy levels in that industry and what that team is able to do. And then CoStar and LoopNet, relatively softer in the fourth quarter than what we would have seen previously. And that really makes up the bulk of all of our net revenue.
As we get into next year, you'll see less of a drag from the legacy residential products, which also helps us as we add Homes.com to get higher growth in our total company sales next year, which is something that we expect to happen with the sales force and the productivity they can give us right out of the gates here.
Our next question comes from Ryan Tomasello with KBW.
Understanding that the Homes brand campaign is still early innings of seeing how that plays out. But maybe you could elaborate on what flexibility you might maintain around investments this year, depending on how performance evolves. Curious if there are specific milestones or circuit breakers you've built in around agent adoption traffic, et cetera, to inform and revisit those plans as the year plays out, whether that's laying on the gas even more or perhaps pulling it back. Just trying to understand how set in stone the investment plans are this year.
Sure. From what I can see here in February with a relatively early view of traffic and sales, we're at the -- we're very -- I'm very pleased with our initial results and pleased what we think we see in traffic. So it exceeds -- or it meets and exceeds my best expectation for where we'd be at this point and frankly, pretty excited about it.
I don't see a scenario where we accelerate the investment in marketing. I think we went to the -- we put the accelerator to the -- the pedal to the floor and the floor is pretty tough. And I don't think there's anywhere to go from here. 80 billion impressions or 600 impressions per household is pretty aggressive. We think it will pay off.
In terms of circuit breaker going the other way, becoming more conservative, again, we don't see -- early stage, we don't see any indication of a reason to pull back. We're exceeding our expectations right now dramatically. And so we could, and we do have significant flexibility. So if the unlikely were to happen, we could pull back dramatically. But I don't anticipate that being the case. I think the bigger question is, do we moderate the level in '25 or '26 based on what we're achieving?
Our next question comes from John Campbell with Stephens.
So Andy, as much as I want to ask you if the Homes.com bookings meter has moved over the last couple of minutes, I'm going to hold off. I'm guessing we're going to get plenty of updates in the quarters ahead. But bigger picture question here, just on the industry kind of legal backdrop. Obviously, a lot of moving parts there. I think it's clear, at least from where I sit, that things seem to be progressing in the favor of Homes.com as far as the value proposition. But what is your take specifically on dual agency, whether you think that's where the market is heading and how you think Homes.com is uniquely positioned to capitalize on that?
Sure. So obviously, the legal situation is complex and there are going to be lots of angles and views on that. And we -- I will not be the leading expert on that, but certainly, things are in flux. I know the big brokerage firms are pursuing settlements. I know the major brokerage firms don't want to fight and extend a protracted battle on whether or not sellers should be forced to compensate buyer/agents. I would not be surprised if there wasn't an outcome where buyers paid their own agent. They can finance that, I believe.
I do believe that Homes.com is advantaged competitively for sure in that our revenue model is agnostic to whether or not there is a buyer/broker participation rule in place. Our product is generating buyer/agency leads. It's generating seller leads. It's helping people sell homes with more exposure and more lead generation. And this is unlike any of the competing models that rely on the seller agent having a preagreed split with the buyer/agent.
So if that were to -- and again, I don't know what's going to happen. But if it were to shift to the buyer paying the buyer agent, I would think that we would have significant advantage in funding our business moving forward. I think that some of the competitors have tried to begin to migrate their business to a world in which there's not a buyer/broker participation rule, but I believe it requires a level of cannibalization that they haven't yet processed. And what they're doing is sort of half measure at best.
So I think we're going to do well and win whatever happens, but I think it would create tailwinds if the -- if we ended up with a settlement that required buyers to pay their buyer/broker a commission. But people like their buyer/broker. We're helping -- we're sending hundreds of thousands of leads for buyer/brokers -- for buyer/brokerage. But we'll send seller listing leads. We'll send leads for people buying homes. We'll be here generating leads, and we're not on one side, just one side, we're more diversified than the competitors.
Okay. Makes a lot of sense. And then somewhat related to that, you mentioned sending free leads. When you guys refer to the Homes.com revenue model, you often refer to the term membership. I'm hoping if you could maybe unpack what exactly that means, maybe starting off with the base level of spend. And then what other products and services are kind of included in that "membership"?
Sure. Membership is pretty straightforward. It means that you're -- you as an agent, it's sold to the agent, and it is priced based upon the sort of transaction volumes you historically do and the price point you operate in and will eventually be based on the market you're in. But it is very price-competitive with what has been out there historically. When you are a member, your listings sort higher and have more agent branding on them. You have a number of your listing detailed pages, have more agent branding on it as well as your other listings.
When you go to the agent director or the neighborhood page or the school page, the agents who are members sort to the top of those different neighborhood pages, school tenant zone pages, whatnot. We aggressively retarget traffic who are engaging with member listings and agent profiles. So to simplify it, or not simplify it, but you -- a member might receive, on average, 1.3 million impressions a month for their listings and their agent bio. A nonmember, while they get leads for free, gets 5,000. So 5,000 versus 1.3 million impressions. There's a significant advantage in being a member.
And right now, depending upon the firm, we're seeing a 8 to 14x increase in lead flow for members if they're sorting to the top of these pages. And where they're getting the most dramatic increase in lead flow is on the agent bio pages. So homeowners -- homebuyers will tend to go a couple of pages deep looking for the right home. But homebuyers or home sellers are not willing to go past Page 1 or 2 of agents that they might hire. So that's where we see the highest advantage in winning selling listings and winning buyer/agency on our site. But the good news is it's working.
Our last question comes from Ashish Sabadra with RBC Capital Markets.
I just wanted to drill down further on the resi monetization, the commentary around $200 million annual recurring bookings continuing at this pace. I was just wondering, as we think about like the agent within that bookings, how are you thinking -- you talked about a wide range there, from $100, $200 per month to as much as $7,400. Are there certain kinds of agents that you're targeting? Any color there would be helpful.
Sure. So we are -- there's 1.6 million agents. I think we're initially targeting 540,000 agents. I think we set a floor -- I won't get the exact number, but I think $30,000, $40,000 annual earnings is what we -- or higher. So it's a pretty broad swath. Price points are from $100, $200 at the lower end, up to tens of thousands of dollars to $100,000 a month for one of these bigger teams with lots of agents on them.
I've spent the last week monitoring sales calls, listening to the sort of reaction and the dialogue of the discussion. One of the things I'm very pleased with is that, I would say, overall, though the price points are different, the prospects and buyers have been pretty resonant with what we're doing. So I think we've dialed it in correctly and we'll be refining the strategy as we go through the year. Scott, would you add anything on that?
That's the initial population, of course, that we came out with the targets. And what we're seeing is that the inbound lead flow is very strong from all agents. So our sales force is going after their top prospects in the target list, but also responding to all the leads that are coming in as quickly as possible. And then on top of that, we have our e-commerce channel, which agents can go in and sign up with a few clicks and have all their information and they're ready to go. So all of those are performing well, and we'll continue to expand the group we target. But right out of the gate, we've got a lot to cover quickly.
10 more memberships. Another 50,000.
I would now like to turn the conference back to Andy for closing remarks.
Thank you. Appreciate that. So today, I've got more interesting concluding remarks that I normally have. So I have some news to share with you. Scott Wheeler joined us as our CFO 8 years ago or so. During those 8 years, he's done a fantastic job at the helm of our finance department. We've seen our revenues triple in that time period, and we've gone from strength to strength.
I would count Scott more than just a valued colleague. He's become a good friend of mine. As you may know, Scott loves to climb mountains. He was the first father-daughter team to summit the tallest mountain in every U.S. state. It wasn't much of an accomplishment in Florida. It was a much bigger accomplishment in Alaska. Scott has accomplished as much as anyone could wish to professionally. So now he's earned the opportunity to retire and pursue his climbing passion in the golden years ahead.
Golden? That was off.
Scott will remain with the company until June to facilitate a transition, and I will bring back the other 2 former CFOs to help in the transition as well. Scott is our third public company CFO, with each of our prior CFOs also having served exactly 8-year tenure. We'll begin a search for our '24 to 2032 CFO immediately. I would have let Scott announce his own retirement, but the last CFO to retire became verklempt when he announced his retirement so I wanted to avoid that awkwardness today. Scott leaves with no disagreements or issue, he simply wants to enjoy the fruits of his labor. God speed, Scott, and thank you so much.
I would like to thank everyone for joining us for our fourth quarter and year-end '23 earnings call. We look forward to speaking with you again on our first quarter call on April 23, '24. Thank you very much for participating. Thank you, Mr. Scott Wheeler.
Thank you, Andy. I'll cry after the call.
You need a tissue, man?
That was kind of you.
This concludes today's conference call. Thank you for participating. You may now disconnect.