DEF: CoStar Group Reports Strong 2024 Results, Focuses on Growth and Strategic Investments

CoStar Group announces impressive 2024 financial results, driven by double-digit revenue growth and strategic acquisitions, while expanding its presence in the residential real estate market.

Summary

• CoStar Group had an excellent year in 2024, demonstrating global leadership in the digital transformation of the real estate industry.
• The company made strategic investments to expand its business and position itself for the future, while delivering profitable revenue growth.
• CoStar Group achieved its 55th consecutive quarter of double-digit revenue growth.
• The company generated positive net income for the ninth straight year, with commercial information and marketplace businesses delivering a 43% profit margin.
• Annual revenue reached $2.74 billion, an increase of 11% over 2023.
• Traffic to CoStar Group sites reached 134 million average monthly unique visitors in the fourth quarter, up 17% year-over-year.
• Apartments.com achieved $1.1 billion in revenue, representing growth of 17% year-over-year.
• CoStar generated $1 billion in revenue with 10% growth compared to 2023.
• Homes.com has become the second largest and fastest growing residential real estate marketplace in the United States.
• In the fourth quarter, the Homes.com Network reached an audience of 110 million average monthly unique visitors.
• Unaided brand awareness for Homes.com rose from 4% to 33%, and the platform achieved annualized net new bookings of $59 million in its first full year of operation.
• CoStar Group acquired Matterport, Inc. in February 2025, a global leader in immersive 3D digital twins and artificial intelligence for the real estate industry.
• In November 2024, CoStar Group acquired Visual Lease, integrating it into the CoStar Real Estate Manager platform.
• The company has a team of over 6,800 global employees.
• In 2024, 1,040 employees grew into new roles within the company, including 826 promotions.
• The average monthly retention rate was 99%, with an average tenure of 4.4 years.
• CoStar Group moved into its new global headquarters in Arlington, Virginia, in the first quarter of 2025.
• Construction of the one million square-foot campus development in Richmond, Virginia, is underway and expected to be complete in May 2026, accommodating approximately 3,500 employees.
• The company has continued to make progress on climate-related disclosures and received validation from the Science-Based Targeting Initiative.
• CoStar Group announced a share buyback program of $500 million.

Sentiment

Score: 9

Explanation: The document expresses a highly positive sentiment due to strong financial results, strategic acquisitions, and successful expansion into new markets. The company's leadership expresses confidence in future growth and value creation.

Positives

• CoStar Group achieved double-digit revenue growth for the 55th consecutive quarter.
• The company's commercial information and marketplace businesses delivered a strong 43% profit margin.
• Apartments.com and CoStar each became billion-dollar businesses in 2024.
• Homes.com has rapidly grown to become the second-largest residential real estate marketplace in the U.S.
• The company has a high employee retention rate of 99%.

Risks

• The document mentions macroeconomic risks, such as inflation, economic downturns, or recession.
• The document mentions business-specific risks related to the company's strategic position, operations, financial structure, legal and regulatory compliance, cybersecurity and corporate governance.
• The document mentions event-specific risks, such as natural disasters, pandemics or wars.

Future Outlook

The entire CoStar Group team remains committed to several efforts that support our continued attention to corporate social responsibility and thoughtful governance. We have continued to make progress on climate-related disclosures, as well as having received validation from the Science-Based Targeting Initiative. We look forward to reporting our progress against them in the future.

Management Comments

• Andrew Florance, Founder & Chief Executive Officer, President and Director: '2024 was an excellent year for CoStar Group, as we continue to demonstrate our global leadership in the digital transformation of the $300+ trillion real estate industry.'
• Louise Sams, Board Chair, CoStar Group, Inc.: 'We are in the midst of another transformative growth phase as Costar Group continues to develop our marketplaces from commercial and multi-family to residential, while also driving international expansion.'

Industry Context

CoStar Group is expanding its presence in the residential real estate market with Homes.com, competing with established players like Realtor.com and Redfin. The acquisition of Matterport positions CoStar Group to leverage 3D technology and AI in the real estate industry.

Comparison to Industry Standards

• Homes.com is the second largest and fastest growing residential real estate marketplace in the United States, with traffic reaching 110 million average monthly unique visitors in the fourth quarter of 2024, according to Google Analytics.
• Realtor.coms average monthly unique users were 62 million for the quarter ended December 31, 2024, as reported in News Corps press release on February 5, 2025.
• Redfins monthly average visitors were 42.68 million for the quarter ended December 31, 2024, according to Google Analytics, as reported in Redfins Annual Report on Form 10-K filed on February 27, 2025.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: The company's strong performance and share buyback program are expected to deliver value to shareholders.
• Employees: The company's growth and internal promotions provide opportunities for employee advancement.
• Customers: The company's investments in technology and new platforms are expected to improve customer experience and provide better insights.
• Communities: The company's corporate social responsibility initiatives are expected to benefit the communities in which it operates.

Next Steps

• Elect eight nominees named in the attached proxy statement to serve on our Board of Directors for a one-year term expiring at the 2026 Annual Meeting of Stockholders.
• Ratify the appointment of Ernst & Young LLP as the Companys independent registered public accounting firm for 2025.
• Approve, on an advisory basis, the Companys executive compensation.
• Approve the CoStar Group, Inc. 2025 Stock Incentive Plan.
• Vote on a stockholder proposal, if properly presented, regarding support for transparency in political spending.

Key Dates

Keywords

real estate, revenue growth, strategic investments, digital transformation, marketplace, Homes.com, Apartments.com, CoStar, Matterport, Visual Lease, share buyback, corporate social responsibility, corporate governance, executive compensation, proxy statement