CoStar Group Third Quarter 2023 Revenue Increased 12% Year-over-Year Marking 50 Straight Quarters of Double-Digit Revenue Growth

CoStar Group, Inc. (NASDAQ: CSGP), a leading provider of online real estate marketplaces, information and analytics in the property markets, announced today that revenue for the quarter ended September 30, 2023 was $625 million, up 12% over revenue of $557 million for the quarter ended September 30, 2022. Net income was $91 million in the third quarter, an increase of 25% over the prior year.

“CoStar Group delivered strong results this quarter on our two principal fronts,” said Andy Florance, Founder and CEO of CoStar Group. “First, our commercial information and marketplace businesses are fortress strong in a turbulent market with revenue growing 14% year-over-year and margins approaching 40%. As we move into the fourth quarter, our adjusted EBITDA, for our commercial information and marketplace businesses, is approaching $1,000,000,000 annualized. We continue to generate strong net new bookings with $65 million of net new bookings in the third quarter. On the second front, we are investing aggressively, but prudently, in Homes.com with the goal of unlocking the enormous potential of becoming the leading, successful U.S. residential real estate portal. In September we celebrated a major milestone on that road to success with 100 million unique visitors to Homes.com.”

“Unique visitors to Homes.com in September grew 1,290% year over year, significantly outperforming our competitors’ traffic, the largest of which were relatively flat or declining. We believe that the competitive balance in the industry is shifting in our favor,” continued Florance. “Our key competitors' sites combine rentals and resale homes, so when we likewise combine our Homes.com and Apartments networks we had 140 million unique visitors in September, according to Google Analytics. In the past year we have quickly grown to become the second most heavily trafficked residential network by a wide margin, with monthly unique visitors 35% higher than Realtor.com and 90% higher than Redfin in September, according to ComScore. We continue to build out the full potential of Homes.com and are focused on continuing to grow traffic and beginning monetization in second quarter of 2024.”

“Last week, we announced our offer to acquire OnTheMarket, one of the top three residential property portals in the United Kingdom. Having operated successfully in the United Kingdom for two decades, we believe that we can grow competitive traffic share in the U.K. just as we have done so many times before in the U.S. and that our significant software investments into Homes.com will give us technology scale advantage in the U.K.”

Year 2022-2023 Quarterly Results - Unaudited

(in millions, except per share data)

 

2022

 

2023

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

 

 

 

 

 

 

 

 

 

Revenues

$516

$536

$557

$573

 

$584

$606

$625

Net income

89

83

72

124

 

87

101

91

Net income per share - diluted

0.23

0.21

0.18

0.31

 

0.21

0.25

0.22

Weighted average outstanding shares - diluted

394

394

396

406

 

406

407

407

 

 

 

 

 

 

 

 

 

EBITDA

158

140

129

155

 

98

105

89

Adjusted EBITDA

178

159

153

182

 

123

127

112

Non-GAAP net income

123

112

118

153

 

118

127

120

Non-GAAP net income per share - diluted

0.31

0.28

0.30

0.38

 

0.29

0.31

0.30

2023 Outlook

The Company expects revenue in the range of $2.445 billion to $2.450 billion for the full year of 2023, representing year-over-year growth of approximately 12% at the midpoint of the range. The Company expects revenue for the fourth quarter of 2023 in the range of $630 million to $635 million, representing revenue growth of approximately 10% year-over-year at the midpoint of the range.

“Against one of the worst property markets in decades, we continue to demonstrate that our commercial information and marketplace businesses can deliver strong, double-digit revenue growth regardless of market cycles,” said Scott Wheeler, CFO of CoStar Group. “Our commercial information and marketplace business is expected to deliver 12% year-over-year revenue growth in the fourth quarter of 2023, and 14% revenue growth for the full year of 2023. Our Homes.com strategy is proving to be very successful and has moved us into second place in the U.S. We are wisely accelerating our investment in our residential marketplace in the second half of 2023. We now expect adjusted EBITDA for the full year of 2023 in the range of $485 million to $490 million. For the fourth quarter of 2023, we expect adjusted EBITDA in the range of $123 million to $128 million.”

The Company expects full year 2023 non-GAAP net income per diluted share in a range of $1.21 to $1.22 based on 407 million shares. For the fourth quarter of 2023, the Company expects non-GAAP net income per diluted share in a range of $0.31 to $0.32 based on 407 million shares. These ranges include an estimated non-GAAP tax rate of 26% for the full year and the fourth quarter of 2023.

The preceding forward-looking statements reflect CoStar Group’s expectations as of October 24, 2023, 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. 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 2023, the Company is assuming a 26% tax rate in order to approximate its statutory corporate tax rate excluding the impact of discrete items.

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

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.

Earnings Conference Call

Management will conduct a conference call to discuss the third quarter 2023 results and the Company’s outlook at 5:00 PM ET on Tuesday, October 24, 2023. 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 thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

2022

 

2023

 

2022

Revenues

 

$

624,669

 

$

556,921

 

$

1,814,941

 

$

1,609,054

 

Cost of revenues

 

 

123,666

 

 

108,364

 

 

355,224

 

 

304,814

 

Gross profit

 

 

501,003

 

 

448,557

 

 

1,459,717

 

 

1,304,240

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing (excluding customer base amortization)

 

 

266,893

 

 

185,395

 

 

743,153

 

 

510,736

 

Software development

 

 

67,891

 

 

56,912

 

 

197,850

 

 

162,520

 

General and administrative

 

 

94,371

 

 

91,270

 

 

274,442

 

 

246,576

 

Customer base amortization

 

 

10,254

 

 

29,651

 

 

31,311

 

 

60,621

 

 

 

 

439,409

 

 

363,228

 

 

1,246,756

 

 

980,453

 

Income from operations

 

 

61,594

 

 

85,329

 

 

212,961

 

 

323,787

 

Interest income (expense), net

 

 

58,422

 

 

10,656

 

 

153,881

 

 

(461

)

Other income, net

 

 

465

 

 

1,389

 

 

1,655

 

 

3,596

 

Income before income taxes

 

 

120,481

 

 

97,374

 

 

368,497

 

 

326,922

 

Income tax expense

 

 

29,907

 

 

25,084

 

 

90,272

 

 

81,841

 

Net income

 

$

90,574

 

$

72,290

 

$

278,225

 

$

245,081

 

 

 

 

 

 

 

 

 

 

Net income per share - basic

 

$

0.22

 

$

0.18

 

$

0.69

 

$

0.62

 

Net income per share - diluted

 

$

0.22

 

$

0.18

 

$

0.68

 

$

0.62

 

 

 

 

 

 

 

 

 

 

Weighted-average outstanding shares - basic

 

 

405,649

 

 

394,712

 

 

405,190

 

 

393,650

 

Weighted-average outstanding shares - diluted

 

 

407,229

 

 

396,209

 

 

406,713

 

394,973

 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures - Unaudited

(in thousands, except per share data)

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

2022

 

2023

 

2022

Net income

 

$

90,574

 

 

$

72,290

 

 

$

278,225

 

 

$

245,081

 

Income tax expense

 

 

29,907

 

 

 

25,084

 

 

 

90,272

 

 

 

81,841

 

Income before income taxes

 

 

120,481

 

 

 

97,374

 

 

 

368,497

 

 

 

326,922

 

Amortization of acquired intangible assets

 

 

18,707

 

 

 

36,596

 

 

 

54,364

 

 

 

82,601

 

Stock-based compensation expense

 

 

21,899

 

 

 

18,138

 

 

 

63,770

 

 

 

54,097

 

Acquisition and integration related costs

 

 

796

 

 

 

1,095

 

 

 

2,272

 

 

 

3,238

 

Restructuring and related costs

 

 

509

 

 

 

191

 

 

 

3,880

 

 

 

191

 

Settlements and impairments

 

 

 

 

 

4,100

 

 

 

(107

)

 

 

4,100

 

Other expense, net

 

 

 

 

 

2,063

 

 

 

 

 

 

6,162

 

Non-GAAP income before income taxes

 

 

162,392

 

 

 

159,557

 

 

 

492,676

 

 

 

477,311

 

Assumed rate for income tax expense(1)

 

 

26

%

 

 

26

%

 

 

26

%

 

 

26

%

Assumed provision for income tax expense

 

 

(42,222

)

 

 

(41,485

)

 

 

(128,096

)

 

 

(124,101

)

Non-GAAP net income

 

$

120,170

 

 

$

118,072

 

 

$

364,580

 

 

$

353,210

 

 

 

 

 

 

 

 

 

 

Net income per share - diluted

 

$

0.22

 

 

$

0.18

 

 

$

0.68

 

 

$

0.62

 

Non-GAAP net income per share - diluted

 

$

0.30

 

 

$

0.30

 

 

$

0.90

 

 

$

0.89

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

 

405,649

 

 

 

394,712

 

 

 

405,190

 

 

 

393,650

 

Weighted average outstanding shares - diluted

 

 

407,229

 

 

 

396,209

 

 

 

406,713

 

 

 

394,973

 

__________________________

 

 

 

 

 

 

 

 

(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

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

2022

 

2023

 

2022

Net income

 

$

90,574

 

 

$

72,290

 

 

$

278,225

 

 

$

245,081

 

Amortization of acquired intangible assets in cost of revenues

 

 

8,453

 

 

 

6,945

 

 

 

23,053

 

 

 

21,980

 

Amortization of acquired intangible assets in operating expenses

 

 

10,254

 

 

 

29,651

 

 

 

31,311

 

 

 

60,621

 

Depreciation and other amortization

 

 

8,418

 

 

 

7,224

 

 

 

24,451

 

 

 

21,199

 

Interest (income) expense, net

 

 

(58,422

)

 

 

(10,656

)

 

 

(153,881

)

 

 

461

 

Other income, net

 

 

(465

)

 

 

(1,389

)

 

 

(1,655

)

 

 

(3,596

)

Income tax expense

 

 

29,907

 

 

 

25,084

 

 

 

90,272

 

 

 

81,841

 

EBITDA

 

$

88,719

 

 

$

129,149

 

 

$

291,776

 

 

$

427,587

 

Stock-based compensation expense

 

 

21,899

 

 

 

18,138

 

 

 

63,770

 

 

 

54,097

 

Acquisition and integration related costs

 

 

796

 

 

 

1,095

 

 

 

2,272

 

 

 

3,238

 

Restructuring and related costs

 

 

509

 

 

 

191

 

 

 

3,880

 

 

 

191

 

Settlements and impairments

 

 

 

 

 

4,100

 

 

 

(107

)

 

 

4,100

 

Adjusted EBITDA

 

$

111,923

 

 

$

152,673

 

 

$

361,591

$

489,213

CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)

 

 

 

 

 

 

 

September 30,

2023

 

December 31,

2022

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

5,229,880

 

 

$

4,967,970

 

Accounts receivable

 

 

213,742

 

 

 

166,140

 

Less: Allowance for credit losses

 

 

(20,911

)

 

 

(12,195

)

Accounts receivable, net

 

 

192,831

 

 

 

153,945

 

Prepaid expenses and other current assets

 

 

76,013

 

 

 

63,952

 

Total current assets

 

 

5,498,724

 

 

 

5,185,867

 

 

 

 

 

 

Deferred income taxes, net

 

 

9,722

 

 

 

9,722

 

Property and equipment, net

 

 

403,195

 

 

 

321,250

 

Lease right-of-use assets

 

 

85,758

 

 

 

80,392

 

Goodwill

 

 

2,315,313

 

 

 

2,314,759

 

Intangible assets, net

 

 

275,095

 

 

 

329,306

 

Deferred commission costs, net

 

 

165,846

 

 

 

142,482

 

Deposits and other assets

 

 

15,997

 

 

 

16,687

 

Income tax receivable

 

 

2,005

 

 

 

2,005

 

Total assets

 

$

8,771,655

 

 

$

8,402,470

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

25,866

 

 

$

28,460

 

Accrued wages and commissions

 

 

91,357

 

 

 

104,988

 

Accrued expenses

 

 

156,009

 

 

 

89,113

 

Income taxes payable

 

 

2,061

 

 

 

10,438

 

Lease liabilities

 

 

40,187

 

 

 

36,049

 

Deferred revenue

 

 

97,583

 

 

 

103,567

 

Total current liabilities

 

 

413,063

 

 

 

372,615

 

 

 

 

 

 

Long-term debt, net

 

 

990,185

 

 

 

989,210

 

Deferred income taxes, net

 

 

63,203

 

 

 

76,202

 

Income taxes payable

 

 

17,542

 

 

 

14,001

 

Lease and other long-term liabilities

 

 

77,500

 

 

 

80,321

 

Total liabilities

 

$

1,561,493

 

 

$

1,532,349

 

 

 

 

 

 

Total stockholders' equity

 

 

7,210,162

 

 

 

6,870,121

 

Total liabilities and stockholders' equity

 

$

8,771,655

 

 

$

8,402,470

 

CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)

 

 

 

Nine Months Ended

September 30,

 

2023

 

2022

Operating activities:

 

 

 

Net income

$

278,225

 

 

$

245,081

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

78,815

 

 

 

109,983

 

Amortization of deferred commissions costs

 

69,811

 

 

 

55,373

 

Amortization of Senior Notes discount and issuance costs

 

1,799

 

 

 

1,771

 

Non-cash lease expense

 

22,092

 

 

 

23,108

 

Stock-based compensation expense

 

63,770

 

 

 

54,097

 

Deferred income taxes, net

 

(12,949

)

 

 

(21,676

)

Credit loss expense

 

25,664

 

 

 

13,468

 

Other operating activities, net

 

324

 

 

 

(1,774

)

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(64,595

)

 

 

(36,177

)

Prepaid expenses and other current assets

 

(20,745

)

 

 

(17,235

)

Deferred commissions

 

(93,147

)

 

 

(83,875

)

Accounts payable and other liabilities

 

21,067

 

 

 

2,131

 

Lease liabilities

 

(26,807

)

 

 

(27,615

)

Income taxes payable, net

 

4,444

 

 

 

(29,051

)

Deferred revenue

 

(6,045

)

 

 

4,488

 

Other assets

 

(738

)

 

 

1,492

 

Net cash provided by operating activities

 

340,985

 

 

 

293,589

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from sale of property and equipment and other assets

 

 

 

 

5,034

 

Purchase of Richmond assets

 

(61,811

)

 

 

(31,530

)

Purchases of property and equipment and other assets

 

(14,141

)

 

 

(43,659

)

Cash paid for acquisitions, net of cash acquired

 

 

 

 

(6,331

)

Net cash used in investing activities

 

(75,952

)

 

 

(76,486

)

 

 

 

 

Financing activities:

 

 

 

Repayments of long-term debt assumed in acquisition

 

 

 

 

(2,155

)

Repurchase of restricted stock to satisfy tax withholding obligations

 

(23,409

)

 

 

(20,259

)

Proceeds from equity offering, net of transaction costs

 

 

 

 

746,170

 

Proceeds from exercise of stock options and employee stock purchase plan

 

20,435

 

 

 

10,777

 

Net cash (used in) provided by financing activities

 

(2,974

)

 

 

734,533

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

(149

)

 

 

(4,297

)

Net increase in cash and cash equivalents

 

261,910

 

 

 

947,339

 

Cash and cash equivalents at the beginning of period

 

4,967,970

 

 

 

3,827,126

Cash and cash equivalents at the end of period

$

5,229,880

$

4,774,465

CoStar Group, Inc.

Disaggregated Revenues - Unaudited

(in thousands)

 

 

 

Three Months Ended September 30,

 

2023

 

2022

 

North America

 

International

 

Total

 

North America

 

International

 

Total

CoStar

$

223,348

 

$

10,012

 

$

233,360

 

$

203,657

 

$

9,033

 

$

212,690

Information Services

 

35,163

 

 

9,473

 

 

44,636

 

 

32,524

 

 

8,489

 

 

41,013

Multifamily

 

235,343

 

 

 

 

235,343

 

 

189,536

 

 

 

 

189,536

LoopNet

 

65,041

 

 

2,440

 

 

67,481

 

 

57,126

 

 

1,775

 

 

58,901

Residential

 

10,293

 

 

 

 

10,293

 

 

19,351

 

 

 

 

19,351

Other Marketplaces

 

33,556

 

 

 

 

33,556

 

 

35,430

 

 

 

 

35,430

Total revenues

$

602,744

 

$

21,925

 

$

624,669

 

$

537,624

 

$

19,297

 

$

556,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

2023

 

2022

 

North America

 

International

 

Total

 

North America

 

International

 

Total

CoStar

$

658,734

 

$

28,808

 

$

687,542

 

$

590,141

 

$

27,764

 

$

617,905

Information Services

 

99,476

 

 

28,710

 

 

128,186

 

 

93,306

 

 

23,424

 

 

116,730

Multifamily

 

670,331

 

 

 

 

670,331

 

 

547,372

 

 

 

 

547,372

LoopNet

 

189,488

 

 

6,793

 

 

196,281

 

 

164,417

 

 

5,228

 

 

169,645

Residential

 

36,154

 

 

 

 

36,154

 

 

57,565

 

 

 

 

57,565

Other Marketplaces

 

96,447

 

 

 

 

96,447

 

 

99,837

 

 

 

 

99,837

Total revenues

$

1,750,630

 

$

64,311

 

$

1,814,941

 

$

1,552,638

 

$

56,416

 

$

1,609,054

 

 

 

 

 

 

 

 

 

 

CoStar Group, Inc.

Results of Segments - Unaudited

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2023

 

2022

 

2023

 

2022

EBITDA

 

 

 

 

 

 

 

North America

$

88,910

 

 

$

127,965

 

$

290,180

 

$

422,454

International

 

(191

)

 

 

1,184

 

 

1,596

 

 

5,133

Total EBITDA

$

88,719

 

 

$

129,149

 

$

291,776

 

$

427,587

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

Net income

 

$89.3

$83.5

$72.3

$124.4

 

$87.1

$100.5

$90.6

Income tax expense

 

32.1

24.7

25.1

35.2

 

29.2

31.1

29.9

Income before income taxes

 

121.4

108.1

97.4

159.5

 

116.4

131.7

120.5

Amortization of acquired intangible assets

 

23.2

22.8

36.6

20.0

 

17.7

18.0

18.7

Stock-based compensation expense

 

17.8

18.1

18.1

21.1

 

20.0

21.8

21.9

Acquisition and integration related costs

 

1.6

0.5

1.1

2.2

 

1.7

(0.2)

0.8

Restructuring and related costs

 

0.2

2.0

 

3.4

(0.1)

0.5

Settlements and impairments

 

4.1

2.0

 

(0.1)

Other expense, net

 

2.0

2.1

2.1

 

Non-GAAP income before income taxes(1)

 

166.1

151.6

159.6

206.7

 

159.1

171.2

162.4

Assumed rate for income tax expense (2)

 

26%

26%

26%

26%

 

26%

26%

26%

Assumed provision for income tax expense

 

(43.2)

(39.4)

(41.5)

(53.8)

 

(41.4)

(44.5)

(42.2)

Non-GAAP net income(1)

 

$122.9

$112.2

$118.1

$153.0

 

$117.7

$126.7

$120.2

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share - diluted

 

$0.31

$0.28

$0.30

$0.38

 

$0.29

$0.31

$0.30

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

392.9

393.3

394.7

404.2

 

404.5

405.4

405.6

Weighted average outstanding shares - diluted

 

394.2

394.5

396.2

406.1

 

406.2

406.8

407.2

__________________________

 

 

 

 

 

 

 

 

 

(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

Net income

 

$89.3

$83.5

$72.3

$124.4

 

$87.1

$100.5

$90.6

Amortization of acquired intangible assets

 

23.2

22.8

36.6

20.0

 

17.7

18.0

18.7

Depreciation and other amortization

 

7.0

7.0

7.2

7.9

 

7.9

8.1

8.4

Interest expense (income), net

 

7.7

3.4

(10.7)

(32.6)

 

(43.5)

(51.9)

(58.4)

Other (income) expense, net

 

(0.9)

(1.3)

(1.4)

0.2

 

(0.6)

(0.6)

(0.5)

Income tax expense

 

32.1

24.7

25.1

35.2

 

29.2

31.1

29.9

EBITDA(1)

 

$158.4

$140.0

$129.1

$155.1

 

$97.8

$105.2

$88.7

Stock-based compensation expense

 

17.8

18.1

18.1

21.1

 

20.0

21.8

21.9

Acquisition and integration related costs

 

1.6

0.5

1.1

2.2

 

1.7

(0.2)

0.8

Restructuring and related costs

 

0.2

2.0

 

3.4

(0.1)

0.5

Settlements and impairments

 

4.1

2.0

 

(0.1)

Adjusted EBITDA(1)

 

$177.9

$158.6

$152.7

$182.3

 

$122.9

$126.8

$111.9

__________________________

 

 

 

 

 

 

 

 

 

(1) Totals may not foot due to rounding.

CoStar Group, Inc.

Reconciliation of Forward-Looking Guidance - Unaudited

(in thousands, 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 December 31, 2023

 

December 31, 2023

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

Net income

$

97,000

 

 

$

101,000

 

 

$

376,000

 

 

$

380,000

 

Income tax expense

 

33,000

 

 

 

34,000

 

 

 

123,000

 

 

 

124,000

 

Income before income taxes

 

130,000

 

 

 

135,000

 

 

 

499,000

 

 

 

504,000

 

Amortization of acquired intangible assets

 

18,000

 

 

 

18,000

 

 

 

73,000

 

 

 

73,000

 

Stock-based compensation expense

 

22,000

 

 

 

22,000

 

 

 

86,000

 

 

 

86,000

 

Acquisition and integration related costs

 

1,000

 

 

 

1,000

 

 

 

3,000

 

 

 

3,000

 

Restructuring and related costs

 

 

 

 

 

 

 

4,000

 

 

 

4,000

 

Non-GAAP income before income taxes

 

171,000

 

 

 

176,000

 

 

 

665,000

 

 

 

670,000

 

Assumed rate for income tax expense(1)

 

26

%

 

 

26

%

 

 

26

%

 

 

26

%

Assumed provision for income tax expense

 

(44,500

)

 

 

(45,800

)

 

 

(172,900

)

 

 

(174,200

)

Non-GAAP net income

$

126,500

 

 

$

130,200

 

 

$

492,100

 

 

$

495,800

 

 

 

 

 

 

 

 

 

Net income per share - diluted

$

0.24

 

 

$

0.25

 

 

$

0.92

 

 

$

0.93

 

Non-GAAP net income per share - diluted

$

0.31

 

 

$

0.32

 

 

$

1.21

 

 

$

1.22

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - diluted

 

407,400

 

 

 

407,400

 

 

 

406,800

 

 

 

406,800

 

__________________________

 

 

 

 

 

 

 

(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 December 31, 2023

 

December 31, 2023

 

Low

 

High

 

Low

 

High

Net income

$

97,000

 

 

$

101,000

 

 

$

376,000

 

 

$

380,000

 

Amortization of acquired intangible assets

 

18,000

 

 

 

18,000

 

 

 

73,000

 

 

 

73,000

 

Depreciation and other amortization

 

10,000

 

 

 

10,000

 

 

 

34,000

 

 

 

34,000

 

Interest income, net

 

(58,000

)

 

 

(58,000

)

 

 

(212,000

)

 

 

(212,000

)

Other income, net

 

 

 

 

 

 

 

(2,000

)

 

 

(2,000

)

Income tax expense

 

33,000

 

 

 

34,000

 

 

 

123,000

 

 

 

124,000

 

Stock-based compensation expense

 

22,000

 

 

 

22,000

 

 

 

86,000

 

 

 

86,000

 

Acquisition and integration related costs

 

1,000

 

 

 

1,000

 

 

 

3,000

 

 

 

3,000

 

Restructuring and related costs

 

 

 

 

 

 

 

4,000

 

 

 

4,000

 

Adjusted EBITDA

$

123,000

 

 

$

128,000

 

 

$

485,000

 

 

$

490,000

 

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. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attract over 100 million unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.

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 fourth quarter and full year 2023 will not be as stated in this press release; the risk that net income for the fourth quarter and full year 2023 will not be as stated in this press release; the risk that EBITDA for the fourth quarter and full year 2023 will not be as stated in this press release; the risk that adjusted EBITDA for the fourth quarter and full year 2023 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 fourth quarter and full year 2023 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.

CoStar Group Third Quarter 2023 Revenue Increased 12% Year-over-Year Marking 50 Straight Quarters of Double-Digit Revenue Growth

Contacts

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

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