8-K: CoStar Group Reports Strong Q1 2025 Results, Revenue Up 12% Amid Homes.com Growth

CoStar Group announced a 12% year-over-year revenue increase for Q1 2025, driven by strong performance in CoStar, LoopNet, and Apartments.com, alongside the rapid scaling of Homes.com.

Summary

• CoStar Group reported Q1 2025 revenue of $732 million, a 12% increase compared to $656 million in Q1 2024.
• The company experienced a net loss of $15 million, or $0.04 per diluted share, which includes a $31 million negative impact from the Matterport acquisition.
• Adjusted EBITDA for Q1 2025 was $66 million, a 429% increase from Q1 2024.
• CoStar and LoopNet saw strong annualized net new bookings, with CoStar up 68% year-over-year and LoopNet up 200% year-over-year.
• Apartments.com added 4,300 properties in Q1 2025, the most in a quarter since Q1 2016.
• The Homes.com sales force has grown to 370 representatives, with plans to reach 500 by the end of June.
• Homes.com's demo-to-close rate increased to over 50% in April, the highest ever for a CoStar Group sales team.
• The Homes.com Network has become the second largest in the industry with 104 million average monthly unique visitors.
• Unaided consumer awareness of Homes.com grew to 36%, up from 4% before the February 2024 launch.
• Member agents on Homes.com are winning 61% more listings than non-Member agents.
• The company completed the Matterport acquisition in February 2025.
• CoStar Group expects full-year 2025 revenue to be in the range of $3.115 billion to $3.155 billion, representing approximately 15% year-over-year growth.
• The company expects Q2 2025 revenue in the range of $770 million to $775 million, representing approximately 14% year-over-year growth.
• Full-year 2025 adjusted EBITDA is expected to be in the range of $355 million to $385 million, a margin of 12% at the midpoint of the range.
• Q2 2025 adjusted EBITDA is expected to be in the range of $50 million to $60 million.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong revenue growth and adjusted EBITDA performance, despite a net loss due to the Matterport acquisition. The company's guidance for the rest of the year is also positive.

Positives

• CoStar Group achieved its 56th consecutive quarter of double-digit revenue growth.
• Commercial information and marketplace brands delivered a 43% profit margin for Q1 2025.
• Homes.com's Net Promoter Score has risen 85 points since May 2024 to 43 today.
• The company is gaining sales momentum across its various platforms.
• The Homes.com sales force is rapidly expanding.

Negatives

• CoStar Group reported a net loss of $15 million for Q1 2025.
• The net loss includes a $31 million negative impact associated with the Matterport acquisition.

Risks

• The company's forward-looking statements are subject to risks and uncertainties, including economic conditions and competition.
• The company's inability to attract and retain new clients could impact future performance.
• The company's inability to successfully integrate acquisitions, such as Matterport, could impact future performance.
• Cyberattacks and security vulnerabilities could disrupt operations and harm the company's reputation.
• The company's indebtedness could limit its financial flexibility.

Future Outlook

CoStar Group expects revenue in the range of $3.115 billion to $3.155 billion for the full year 2025 and adjusted EBITDA in the range of $355 million to $385 million. For the second quarter of 2025, the company expects revenue in the range of $770 million to $775 million and adjusted EBITDA in the range of $50 million to $60 million.

Management Comments

• Andy Florance, Founder and Chief Executive Officer of CoStar Group, stated that the company delivered strong revenue growth and exceeded the top-end of its Adjusted EBITDA guidance.
• Christian Lown, CFO of CoStar Group, noted the strong revenue and adjusted EBITDA growth and provided the company's outlook for the full year 2025.

Industry Context

CoStar Group is a leading provider of online real estate marketplaces, information, analytics, and 3D digital twin technology. The company's performance reflects the ongoing digitization of the real estate industry and the increasing demand for online real estate services.

Comparison to Industry Standards

• The document references Realtor.com, Zillow, and Redfin as comparables in the Homes.com section.
• Homes.com has become the second largest in the industry with 104 million average monthly unique visitors, compared to Zillow's 204 million, Realtor.com's 62 million, and Redfin's 42.68 million.

Stakeholder Impact

• Shareholders can expect continued growth and profitability, although the net loss in Q1 2025 may be a concern.
• Employees can expect continued investment in the company and potential for career growth.
• Customers can expect continued innovation and improvement in the company's products and services.
• Suppliers can expect continued business with the company.

Next Steps

• Management will conduct a conference call to discuss the first quarter 2025 results and the company's outlook.
• The company plans to continue scaling its Homes.com sales force.
• The company plans to deploy Matterport across CoStar Group and meaningfully expand this unique data set.

Key Dates

Keywords

CoStar Group, revenue, EBITDA, Homes.com, LoopNet, Apartments.com, real estate, Matterport, financial results, earnings