8-K: CoStar Group Reports Strong 2025 Adjusted Growth, Affirms 2026 Outlook

CoStar Group announced robust adjusted financial and operating results for 2025, driven by double-digit revenue growth and surging Adjusted EBITDA, while affirming its positive 2026 guidance.

Summary

• Full year 2025 revenue reached $3.2 billion, a 19% increase over 2024's $2.7 billion.
• Fourth quarter 2025 revenue was $900 million, up 27% from $709 million in Q4 2024.
• Net income for the full year 2025 was $7 million, impacted by acquisition costs from Matterport and Domain.
• Adjusted Net Income for full year 2025 increased 23% to $364 million.
• Adjusted EBITDA for full year 2025 surged 83% to $442 million.
• Record net new bookings of $308 million were achieved in 2025.
• The company completed a $500 million share repurchase program in Q4 2025 and plans to repurchase an additional $700 million in 2026.
• The Homes.com Network is now the second largest and fastest-growing residential portal network in the U.S., with over 2.1 billion views and 108 million average monthly unique visitors in 2025.
• Homes.com has over 31,000 agent subscribers, 76% on annual contracts, generating nearly $100 million in annual run rate revenue.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong report, highlighting significant adjusted financial growth and strategic advancements like Homes AI and Homes.com's market penetration, despite the temporary impact of acquisition costs on GAAP net income.

Positives

• Achieved 59th consecutive quarter of double-digit revenue growth, with full year 2025 revenue up 19% to $3.2 billion and Q4 2025 revenue up 27% to $900 million.
• Adjusted EBITDA for full year 2025 surged 83% to $442 million, indicating significant earnings acceleration.
• Reported record net new bookings of $308 million, demonstrating strong sales performance.
• Successfully launched Homes AI, described as the most sophisticated vertical AI application in real estate, expected to create competitive distance.
• Homes.com Network has rapidly grown to become the second largest and fastest-growing residential portal network in the U.S., with 108 million average monthly unique visitors in 2025.
• Secured over 31,000 agent subscribers for Homes.com, with 76% on annual contracts, contributing nearly $100 million in annual run rate revenue.
• Completed a $500 million share repurchase program in Q4 2025 and authorized an additional $700 million repurchase in 2026, signaling confidence and returning value to shareholders.
• Affirmed strong 2026 full year guidance, projecting revenue growth of approximately 17% and Adjusted EBITDA between $740 million and $800 million.

Negatives

• Net income for the full year 2025 was significantly impacted by acquisition costs from the Matterport and Domain acquisitions, resulting in only $7 million in net income compared to $139 million in 2024.
• Earnings per diluted share for the full year 2025 were low at $0.02.

Risks

• Risks related to artificial intelligence products such as Homes AI.
• Inability to attract and retain new clients.
• Inability to successfully develop and introduce new or updated online marketplace services, information, and analytics.
• Inability to compete successfully against existing or future competitors in attracting advertisers and in general.
• Effects of fluctuations and market cyclicality.
• Effects of global economic uncertainties and downturns or a downturn or consolidation in the real estate industry.
• Inability to hire qualified persons for, or retain and continue to develop the sales force, or unproductivity of the sales force.
• Inability to retain and attract highly capable management and operating personnel.
• Downward pressure that internal and external investments may place on operating margins.
• Inability to increase brand awareness.
• Inability to maintain or increase internet traffic to marketplaces, and the risk that methods used to measure unique visitors may misstate actual numbers or differ from competitors' methods.
• Inability to attract new advertisers.
• Inability to successfully identify, finance, integrate, and/or manage costs related to acquisitions.
• Inability to complete certain strategic transactions if subject to regulatory review or approval.
• Inability to realize the benefits of the acquisition of Matterport.
• Effects of cyberattacks and security vulnerabilities, and technical problems or disruptions.
• Significant costs associated with undertaking a large infrastructure project to build out the campus in Richmond, Virginia.
• Inability to generate increased revenues from current or future geographic expansion plans.
• Risks related to acceptance of credit cards and debit cards and facilitation of other customer payments.
• Effects of climate related events and other events beyond control.
• Effects related to attention to climate-related risks and opportunities.
• Inability to obtain and maintain accurate, comprehensive, or reliable data.
• Inability to obtain and maintain stable data feeds, or disruption of data feeds.
• Inability to enforce or defend ownership and use of intellectual property.
• Effects of use of new and evolving technologies, including artificial intelligence, on the ability to protect data and intellectual property from misappropriation by third parties.
• Inability to defend against potential legal liability for collecting, displaying, or distributing information.
• Inability to obtain or retain listings from real estate brokers, agents, property owners, and apartment property managers.
• Inability to maintain or establish relationships with third-party listing providers.
• Inability to comply with the rules and compliance requirements of Multiple Listing Services.
• Risks related to international operations and effects of foreign currency exchange rate fluctuations.
• Indebtedness.
• Effects of a lowering or withdrawal of the ratings assigned to debt securities by rating agencies.
• Effects of any actual or perceived failure to comply with privacy laws and standards.
• Effects of changes in tax laws, regulations, or fiscal and tax policies.
• Effects of third-party claims, litigation, regulatory proceedings, or government investigations.
• Risks related to return on investment.
• Inability of third-party suppliers upon which Matterport relies to fulfill its needs.
• Risks associated with the ability to integrate Domain Holdings Australia Limited and realize the benefits of the Domain Transaction.
• Risks related to open source software.
• Risks related to the specific timing, price, and size of repurchases under the Stock Repurchase Program, including that the program may be suspended or discontinued at any time.

Future Outlook

CoStar Group is affirming its full year 2026 guidance, expecting revenue in the range of $3.78 billion to $3.82 billion, representing approximately 17% year-over-year growth at the midpoint. Adjusted EBITDA is projected to range from $740 million to $800 million, with a 20% margin at the midpoint. Full year 2026 Adjusted EPS is anticipated to be between $1.22 and $1.33. The company expects Adjusted EBITDA margins to increase throughout 2026 due to marketing spend timing and Domain's revenue seasonality.

Management Comments

• "With our 59th consecutive quarter of double-digit revenue growth and Adjusted EBITDA surging 83% year-over-year, CoStar Group is entering a period of significant earnings acceleration." Andy Florance, Founder and Chief Executive Officer.
• "The heavy lifting of the Homes.com national brand launch is behind us, and the launch of Homes AI – the most sophisticated vertical AI application in real estate – marks the beginning of a new era for our business. We intend to deploy this transformative capability across every platform in our portfolio, and I believe it will create lasting competitive distance between us and everyone else in the industry." Andy Florance, Founder and Chief Executive Officer.
• "In just two years, the Homes.com Network has become the second largest and is the fastest growing residential portal network in the U.S, with over 2.1 billion views and 108 million average monthly unique visitors in 2025. We now have over 31,000 agent subscribers, 76% on annual contracts, generating nearly $100 million in annual run rate revenue." Andy Florance, Founder and Chief Executive Officer.
• "Our Adjusted EBITDA margins are expected to increase throughout the year based on the timing of our marketing spend and the seasonality of revenue for Domain." Chris Lown, CFO of CoStar Group.

Industry Context

StockSavvy.ai notes that CoStar Group's continued double-digit revenue growth and significant Adjusted EBITDA expansion position it strongly within the competitive real estate technology sector. The strategic focus on AI with 'Homes AI' and the rapid ascent of Homes.com to become the second-largest residential portal network underscore a proactive approach to market leadership. This aggressive expansion, particularly in the residential segment, directly challenges established players like Zillow Group and Realtor.com, indicating a dynamic shift in market share and technological innovation within the industry.

Comparison to Industry Standards

• Homes.com Network (including Homes.com, Apartments Network, and Land Network) reported 108 million average monthly unique visitors for the year ended December 31, 2025, according to Google Analytics.
• Realtor.com reported 62 million average monthly unique users for the quarter ended December 31, 2025, according to internal data as reported by News Corp.
• Zillow Group reported 235 million average monthly unique users for the year ended December 31, 2025, as reported in their Annual Report on Form 10-K.

Corporate Governance

Legal Proceedings

• The balance sheet includes a litigation accrual of $99 million as of December 31, 2025.
• Risks include the effects of third-party claims, litigation, regulatory proceedings, or government investigations.

Stakeholder Impact

• Shareholders: Benefit from strong adjusted financial performance, positive future outlook, and a significant share repurchase program, indicating management's confidence and commitment to returning capital.
• Employees: Continued growth and strategic initiatives like Homes AI may create new opportunities, but risks related to sales force productivity and retaining key personnel are noted.
• Customers: Introduction of Homes AI and the growth of Homes.com Network aim to enhance service offerings and user experience in both commercial and residential real estate.
• Suppliers: Matterport's reliance on third-party suppliers is noted as a risk, indicating potential dependencies.
• Creditors: The company's indebtedness and the effects of potential rating changes are identified as risks.

Next Steps

• Deploy Homes AI across every platform in the company's portfolio.
• Repurchase $700 million shares of Common Stock in 2026 under the previously authorized $1.5 billion share repurchase program.
• Continue to increase Adjusted EBITDA margins throughout 2026, influenced by marketing spend timing and Domain's revenue seasonality.
• Management will conduct a conference call to discuss the results and outlook at 5:00 PM ET on February 24, 2026.

Key Dates

Recommendation

CoStar Group's strong adjusted financial performance, including an 83% surge in Adjusted EBITDA and record net new bookings, coupled with a positive 2026 outlook and strategic advancements like Homes AI and the rapid growth of Homes.com, indicate robust underlying business momentum. The significant share repurchase program further signals management's confidence and commitment to shareholder value. While GAAP net income was impacted by acquisition costs, this is a temporary effect, and the focus on high-growth adjusted metrics and strategic innovation makes the stock attractive for long-term investors seeking exposure to a leading real estate technology platform.

Keywords

CoStar Group, CSGP, Financial Results, Earnings, Adjusted EBITDA, Revenue Growth, Homes.com, Homes AI, Real Estate Technology, Online Marketplaces, Share Repurchase, Acquisitions, Matterport, Domain, Commercial Real Estate, Residential Real Estate