CoStar Group, Inc.

CSGP · NASDAQ · USD

Can CoStar turn Homes.com into a profitable growth engine and hold pricing power at Apartments.com while total net new bookings have stopped accelerating?

Last 4 earnings calls · through Q2 FY2026

Bull case

  • Homes.com subscriber economics

    The bull case is that Homes.com members earn far more in commissions than they pay in subscription fees, so retention and pricing can rise together.

  • Recurring subscription revenue

    Most revenue is recurring subscriptions on annual contracts with high renewal rates, giving the company a predictable base to fund new products and markets.

  • Residential segment profitability

    Residential operations have crossed into profit and management has laid out a path that reduces its Homes.com spending every year through the end of the decade.

  • Commercial franchise recovery

    CoStar, LoopNet and the newer debt and lease benchmarking products each add a growth layer on top of a commercial property market that is recovering.

Bear case

  • Net new bookings slowdown

    The bear case is that bookings growth has stalled, which shows up later in slower revenue and undercuts the case for the enlarged sales organization.

  • Apartments.com pricing pressure

    Apartment owners are under vacancy stress and a competitor is discounting heavily, so the company must trade away price to defend its share of rooftops.

  • Homes.com sales force reset

    The Homes.com push is being reworked from headcount growth to per-rep productivity, which pushes revenue out and suggests the original plan overshot.

  • Acquisition-driven complexity

    Growth now leans on Domain, Matterport and Zonda, bringing integration, dilution and goodwill risk that is hard to see in the reported segments.

Bull and bear points

Growth & Execution

In short: Homes.com and new data products are growing fast, but bookings have slowed and revenue guidance was cut.

Bull · 2

  • Homes.com subscribers keep compounding

    Management reports more than 36,000 agent subscribers, most on annual contracts, and is raising prices for new members after documenting member returns. A larger, longer-lived subscriber base is what makes the Homes.com investment pay back.

    Q2 FY2026 call

  • Four commercial products launched in one quarter

    Rent Benchmark, CoStar France, U.K. public record search and AI lease abstraction all went live, with CoStar Australia due later this year. Each adds subscription revenue on top of an existing sales force and data set.

    Q2 FY2026 call
Bear · 2

  • Net new bookings barely grew sequentially

    Net new bookings rose just 3% from the first quarter, a pace that does not support the revenue acceleration management has promised. Bookings convert to revenue over subsequent quarters, so a flat trend limits 2027 growth.

    Q2 FY2026 call

  • Full-year revenue guidance was cut

    One quarter ago management reaffirmed its revenue range; it now expects less, citing Ten-X, fewer Homes.com reps and price discipline at Apartments.com. Cutting the top line while holding profit guidance means the growth plan slipped.

    Tone shiftQ1 FY2026 → Q2 FY2026

Profitability & Financial Strength

In short: Profit and cash flow are rising fast as costs are held flat, while Homes.com spending still weighs on margins.

Bull · 2

  • Adjusted EBITDA guidance range moved up

    The full-year adjusted EBITDA range rose to $780 million to $820 million from $740 million to $800 million, and management expects the highest profit in company history. The increase came from personnel and operating cost savings rather than from revenue.

    Tone shiftQ4 FY2025 → Q2 FY2026

  • Operating margin swung positive

    Operating margin reached 8.2% against a loss in the same quarter a year earlier. That swing shows the heavy spending phase of the Homes.com brand launch is behind the company and profit can scale with revenue.

    Filed financials
Bear · 2

  • Diluted share count still above three years ago

    Diluted shares rose 5.8% between fiscal 2022 and fiscal 2025, so per-share gains trailed total profit growth. Buybacks only began in 2025 and must keep running to offset acquisition-related share issuance.

    Filed financials

  • Homes.com still consumes heavy net investment

    Management still guides to a $550 million net investment in Homes.com for 2026 and weights marketing to the first half. Reported margins therefore stay uneven quarter to quarter even as the full-year figure improves.

    Q1 FY2026 call

Market Position

In short: Apartment leads convert better than rivals, but discounting rivals and single-source suppliers are risks.

Bull · 2

  • Lead quality supports holding price

    Third-party analysis finds Apartments.com leads convert to leases at 2.5 times the next closest competitor. That conversion advantage is why management can keep pricing roughly flat while a rival discounts to buy share.

    Q2 FY2026 call

  • Legal pressure sits on the rental rival

    The FTC and several state attorneys general are suing Zillow over its rental advertising agreement. A ruling against the rival could unwind a partnership that CoStar competes against directly in multifamily advertising.

    Q2 FY2026 call
Bear · 2

  • A competitor is discounting to buy share

    Apartment vacancy is elevated and a rival is pricing aggressively, so Apartments.com is accepting slower revenue growth and lower average revenue per property to protect its rate card. That trade limits growth in its most profitable marketplace.

    Q2 FY2026 call

  • Matterport depends on few hardware suppliers

    Matterport relies on a limited number of component suppliers, some in China, for its cameras. Tariffs or a supply interruption would slow hardware sales and the subscriptions that come attached to each camera.

    10-K, filed 2026-02-26