Real estate data provider CoStar Group (NASDAQ: CSGP) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 22.5% year on year to $897 million. The company expects next quarter’s revenue to be around $927 million, close to analysts’ estimates. Its non-GAAP profit of $0.27 per share was 46.5% above analysts’ consensus estimates.

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“CoStar Group produced $67 million in net new bookings in the first quarter of 2026, an increase of 20% year-over-year. We have delivered 60 consecutive quarters of consistent, double-digit revenue growth in a wide range of economic conditions,” said Andy Florance, Founder and Chief Executive Officer of CoStar Group.

Company Overview

With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ: CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $3.41 billion in revenue over the past 12 months, CoStar is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, CoStar’s 14.6% annualized revenue growth over the last five years was exceptional. This shows it had high demand, a useful starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. CoStar’s annualized revenue growth of 16.2% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, CoStar’s year-on-year revenue growth of 22.5% was excellent, and its $897 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 18.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 14.7% over the next 12 months, similar to its two-year rate. Still, this projection is healthy and suggests the market is baking in success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.

CoStar has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average adjusted operating margin of 17%.

Analyzing the trend in its profitability, CoStar’s adjusted operating margin decreased by 20.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q1, CoStar generated an adjusted operating margin profit margin of 5%, down 1.6 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

CoStar’s flat EPS over the last five years was below its 14.6% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of CoStar’s earnings can give us a better understanding of its performance. As we mentioned earlier, CoStar’s adjusted operating margin declined by 20.9 percentage points over the last five years. Its share count also grew by 5.2%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For CoStar, its two-year annual EPS declines of 2.9% show its recent history was to blame for its underperformance over the last five years. These results were bad no matter how you slice the data.

In Q1, CoStar reported adjusted EPS of $0.27, up from $0.15 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects CoStar’s full-year EPS of $0.98 to grow 46.1%.

Key Takeaways from CoStar’s Q1 Results

It was good to see CoStar beat analysts’ EPS expectations this quarter. We were also excited its EPS guidance for next quarter outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter was in line and its full-year revenue guidance was in line with Wall Street’s estimates. Overall, we think this was mixed quarter with some positives and some negatives as well. The market seemed to be hoping for more, and the stock traded down 4.6% to $34.32 immediately after reporting.

So do we think CoStar is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).