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CoStar Group Inc
CoStar Group Inc. has cemented itself as a pivotal force within the commercial real estate landscape, leveraging technology to revolutionize the way real estate professionals access and utilize property information. Founded in 1987 by Andrew Florance, the company has meticulously built a comprehensive database and software suite that serves as an indispensable tool for brokers, investors, and property managers. At its core, CoStar operates as a data powerhouse, amassing vast amounts of information on commercial properties across the globe. This data spans building specifications, tenancy details, ownership information, and historical sales and lease data, among other metrics. By offering a platform that aggregates such detailed insights, CoStar empowers its clientele to make informed decisions, from property valuation and acquisition to market analysis and asset management.
The company primarily generates its revenue through subscription services, providing access to its extensive database and analytics tools. Users, including real estate firms, institutions, and small businesses, pay premium fees for real-time access to CoStar's vast repository of continuously updated information. Additionally, CoStar Group extends its reach beyond mere data provision by supplying advertising solutions through platforms like Apartments.com. Here, landlords and property managers pay to list rental properties, seeking visibility among potential tenants. This additional revenue stream underscores CoStar’s dual role as both a data provider and a marketing channel within the real estate ecosystem. As a result, CoStar Group Inc. has not only carved out a niche for itself but has also become an integral part of the real estate industry's fabric, guiding critical business decisions through precision and innovation.
CoStar Group Inc. has cemented itself as a pivotal force within the commercial real estate landscape, leveraging technology to revolutionize the way real estate professionals access and utilize property information. Founded in 1987 by Andrew Florance, the company has meticulously built a comprehensive database and software suite that serves as an indispensable tool for brokers, investors, and property managers. At its core, CoStar operates as a data powerhouse, amassing vast amounts of information on commercial properties across the globe. This data spans building specifications, tenancy details, ownership information, and historical sales and lease data, among other metrics. By offering a platform that aggregates such detailed insights, CoStar empowers its clientele to make informed decisions, from property valuation and acquisition to market analysis and asset management.
The company primarily generates its revenue through subscription services, providing access to its extensive database and analytics tools. Users, including real estate firms, institutions, and small businesses, pay premium fees for real-time access to CoStar's vast repository of continuously updated information. Additionally, CoStar Group extends its reach beyond mere data provision by supplying advertising solutions through platforms like Apartments.com. Here, landlords and property managers pay to list rental properties, seeking visibility among potential tenants. This additional revenue stream underscores CoStar’s dual role as both a data provider and a marketing channel within the real estate ecosystem. As a result, CoStar Group Inc. has not only carved out a niche for itself but has also become an integral part of the real estate industry's fabric, guiding critical business decisions through precision and innovation.
Revenue Growth: CoStar Group reported third quarter revenue of $834 million, up 20% year-over-year, marking its 58th consecutive quarter of double-digit revenue growth and exceeding the high end of guidance.
Bookings Surge: Net new bookings reached $84 million, a 92% increase year-over-year, with notable momentum from Homes.com and Apartments.com.
Profitability: Adjusted EBITDA rose to $115 million, up 51% from Q3 2024, with a 47% margin in Commercial Information and Marketplaces.
Residential Strength: Residential portal revenues grew 22.7% quarter-over-quarter and 31.3% year-over-year, with strong subscriber growth and accelerating bookings at Homes.com.
AI Investment: CoStar is allocating 50% of Homes.com software development toward AI-driven features, but overall investment spend is expected to stay flat or decrease in 2026.
Guidance Raised: Full-year revenue guidance was increased to a range of $3.23–$3.24 billion, and full-year adjusted EBITDA is now expected at $415–$425 million.
Domain Acquisition: The acquisition of Domain contributed $25 million in Q3 revenue and is expected to further boost residential results in Q4.
Competitive Commentary: Management highlighted legal and regulatory challenges facing Zillow, positioning CoStar's portals as differentiated and well-placed for growth.