CoStar Group, Inc.

CSGP · NASDAQ · USD

Analysis

Last 4 earnings calls · through Q2 FY2026

CoStar traded revenue growth for profit: adjusted EBITDA doubled and its residential segment turned profitable, but management cut full-year revenue guidance. The next test is whether AI engagement and a new depth-advertising layer restart the growth its sales reset slowed down. How much of the $100 million expense cut is permanent?

  • The profit turn is real, and it arrived early.

    Adjusted EBITDA more than doubled in Q2 FY2026 and the residential segment, the Homes.com build that had been losing money, posted its first profitable quarter ahead of plan. About $100 million came out of the 2026 expense base. How much of the Homes.com investment is left to spend through 2030?

  • Growth is slowing because management chose margin.

    Management cut its full-year revenue outlook and bookings fell year over year, then named why: a smaller Homes.com sales team, a Ten-X restructuring, and holding Apartments.com prices. Each choice trades sales for profit. How much of the guidance cut came from Ten-X versus Homes.com?

  • Apartments.com, the biggest profit pool, is decelerating.

    Growth there slid to 9% as a stressed rental market, with concessions spreading, met a rival cutting prices to buy share. CoStar is holding price and pointing to leads that convert at 2.5x the next portal, betting quality wins over price.

Bullish
  • Depth advertising becomes a second revenue layer. It would open a revenue pool far bigger than subscriptions, the way extra placement already does for Apartments.com.
  • The cost cuts stay cut rather than being spent again. Rather than funding another launch, each extra dollar of sales drops to profit, and that keeps margins climbing.
  • Field sales settle in and out-sell the inside team. Field reps sell about twice as much per person, so a smaller team can still win the agents its revenue depends on.
Bearish
  • Bookings stay soft, and 2027 growth pays for it. Most revenue is subscriptions sold in advance, so a soft sales year shows up as slower growth a year later, not now.
  • Apartments.com keeps losing price to a discounting rival. More properties paying less each means the biggest profit pool grows more slowly than the customer count suggests.
  • Homes.com subscriber growth stalls while the field team is built. Cutting reps now to rebuild later leaves a hole in sign-ups, and subscriptions are what today's revenue is made of.
PoliticiansInstitutionsInsiders
PoliticianTransactionAmountTradedFiled
Donald Trump
Republican · Executive
Purchase≥$1KJul 24Sep 22
Donald Trump
Republican · Executive
Sale≥$1KJul 8Sep 22
Donald Trump
Republican · Executive
Sale≥$50KJun 24Aug 22
Donald Trump
Republican · Executive
Sale≥$1KJun 23Aug 22
Donald Trump
Republican · Executive
Sale≥$100KJun 18Aug 22

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Product segmentsGeography
FY2024 · USD

How CoStar Group turned $2.7B of revenue into $5.0M of operating income.

Revenue
CoStar Suite$1.0B▲ 10.30% YoY
LoopNet$281.7M▲ 6.38% YoY
Information services$135.9M▼ 20.48% YoY
Online Marketplaces$130.2M▼ 2.69% YoY
Residential$100.6M▲ 118.22% YoY
Total revenue$2.7B
Gross profit$2.2B79.6%
Operating income$5.0M0.2%
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