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CoStar Group Successfully Launches Monetization of Homes.com in First Quarter 2024, with $39 Million of Net New Bookings Accelerating Overall Net New Bookings to a Record $86 Million
"CoStar Group delivered exceptional revenue, sales and marketplace traffic results in the first quarter of 2024, fueled by the launch of our monetization of Homes.com on February 12th of this year," said Andy Florance, Founder and CEO of CoStar Group. "With less than two months of selling in the first quarter, Homes.com membership subscriptions reached nearly $40 million in net new bookings. This is by far the strongest sales launch of any product in the company's history, and we are raising our sales and revenue forecast for Homes.com for the full year 2024. Sales of Homes.com memberships were supported by strong Residential Network(1) traffic which reached a record 156 million monthly unique visitors in March, according to Google Analytics. We believe that Homes.com is now one of two most heavily trafficked residential marketplace portals in the U.S. Our aggressive marketing campaign successfully catapulted our unaided awareness from 4% in the fourth quarter of 2023 to 24% by the end of March 2024," said Florance.
"I'm thrilled to report that our sales team delivered our highest ever quarterly net new bookings of $86 million in the first quarter of 2024," continued Florance. "Overall revenue grew 12% year-over-year, with Apartments.com delivering over 20% revenue growth for the fifth consecutive quarter, and CoStar growing revenue 11% in the first quarter. Both Apartments.com and CoStar crossed $250 million of revenue in the first quarter to become our first and second businesses to reach $1 billion in annualized run rate revenue."
Year 2023-2024 Quarterly Results - Unaudited
(in millions, except per share data)
2023 2023 2024
-------------------- -------------------------------------------------------------------------------------------------------------------------------------------- --------------------
Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
$584 $584 $606 $625 $640 $656
Revenues
87 87 101 91 96 7
Net income
0.21 0.21 0.25 0.22 0.24 0.02
Net income per share - diluted
406 406 407 407 408 407
Weighted average outstanding shares - diluted
98 98 105 89 98 (13)
EBITDA
123 123 127 112 130 12
Adjusted EBITDA
118 118 127 120 133 42
Non-GAAP net income
_____________________________
2024 Outlook
"We are off to a strong start in the first quarter of 2024 and are raising our full year revenue and adjusted EBITDA guidance," said Scott Wheeler, CFO of CoStar Group. The Company now expects revenue in the range of $2.76 billion to $2.77 billion for the full year of 2024, representing revenue growth of approximately 13% year-over-year at the midpoint of the range. The Company expects revenue for the second quarter of 2024 in the range of $674 million to $679 million, representing revenue growth of approximately 12% year-over-year at the midpoint of the range.
"We now expect adjusted EBITDA for the full year of 2024 in the range of $185 million to $205 million, an increase of $15 million at the midpoint of the range from our previous guidance. For the second quarter of 2024, we expect adjusted EBITDA in the range of $5 million to $10 million."
The Company expects full year 2024 non-GAAP net income per diluted share in a range of $0.58 to $0.62 based on 409 million shares. For the second quarter of 2024, the Company expects non-GAAP net income per diluted share in a range of $0.09 to $0.10 based on 409 million shares. These ranges include an estimated non-GAAP tax rate of 26% for the full year and the second quarter of 2024.
The preceding forward-looking statements reflect CoStar Group's expectations as of April 23, 2024, including forward-looking non-GAAP financial measures on a consolidated basis, based on current estimates, expectations, observations, and trends. Given the risk factors, rapidly evolving economic environment, and uncertainties and assumptions discussed in this release and in our quarterly reports on Form 10-Q and annual reports on Form 10-K, actual results may differ materially. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.
Reconciliations of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share to the most directly comparable GAAP measures are shown in detail below, along with definitions for those terms. A reconciliation of forward-looking non-GAAP guidance to the most directly comparable GAAP measure, net income, can be found within the tables included in this release.
Non-GAAP Financial Measures
For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Company's financial condition and results of operations, please refer to the Company's latest periodic report.
EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before interest income or expense, net and other income or expense, net; loss on debt extinguishment; income taxes and depreciation and amortization expense.
Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, and settlements and impairments incurred outside the Company's ordinary course of business. Adjusted EBITDA margin represents adjusted EBITDA divided by revenues for the period.
Non-GAAP net income is a non-GAAP financial measure determined by adjusting GAAP net income attributable to CoStar Group for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside the Company's ordinary course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes. In 2024, the Company is assuming a 26% tax rate in order to approximate its statutory corporate tax rate excluding the impact of discrete items.
Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share. For periods with GAAP net losses and non-GAAP net income, the weighted average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.
Operating Metrics
Net new bookings is calculated based on the annualized amount of change in the Company's sales bookings resulting from new subscription-based contracts, changes to existing subscription-based contracts and cancellations of subscription-based contracts for the period reported. Information regarding net new bookings is not comparable to, nor should it be substituted for, an analysis of the Company's revenues over time.
Earnings Conference Call
Management will conduct a conference call to discuss the first quarter 2024 results and the Company's outlook at 5:00 PM ET on Tuesday, April 23, 2024. A live audio webcast of the conference will be available in listen-only mode through the Investors section of the CoStar Group website: https://investors.costargroup.com. A replay of the webcast audio will also be available in the Investors section of our website for a period of time following the call.
CoStar Group, Inc.
Condensed Consolidated Statements of Operations - Unaudited
(in millions, except per share data)
Three Months Ended
March 31, March 31, March 31,
2024 2023
----------------------------------------------- ------------------------------
$ 656.4 $ 584.4
Revenues
141.2 119.2
Cost of revenues
-------------------- ------- -------------------- -------------------- ----------
515.2 465.2
Gross profit
Operating expenses:
366.1 226.3
Selling and marketing (excluding customer base amortization)
82.4 66.6
Software development
98.5 89.5
General and administrative
11.0 10.6
Customer base amortization
-------------------- ------- -------------------- -------------------- ----------
558.0 393.0
-------------------- ------- -------------------- -------------------- ----------
(42.8 ) 72.2
(Loss) income from operations
56.2 43.5
Interest income, net
(1.9 ) 0.6
Other (expense) income, net
-------------------- ------- -------------------- -------------------- ----------
11.5 116.3
Income before income taxes
4.8 29.2
Income tax expense
-------------------- ------- -------------------- -------------------- ----------
$ 6.7 $ 87.1
Net income
==================== ======= ==================== ==================== ==========
$ 0.02 $ 0.22
Net income per share - basic
==================== ======= ==================== ==================== ==========
$ 0.02 $ 0.21
Net income per share - diluted
==================== ======= ==================== ==================== ==========
405.6 404.5
Weighted-average outstanding shares - basic
CoStar Group, Inc.
Reconciliation of Non-GAAP Financial Measures - Unaudited
(in millions, except per share data)
Reconciliation of Net Income to Non-GAAP Net Income
Three Months Ended
March 31, March 31, March 31,
2024 2023
------------------------------------------------------ ----------------------------------------------------
$ 6.7 $ 87.1
Net income
4.8 29.2
Income tax expense
-------------------- -------------- -------------------- -------------------- ------------ --------------------
11.5 116.3
Income before income taxes
19.8 17.7
Amortization of acquired intangible assets
22.8 20.0
Stock-based compensation expense
2.3 1.7
Acquisition and integration related costs
-- 3.4
Restructuring and related costs
-- (0.1 )
Settlements and impairments
-------------------- -------------- -------------------- -------------------- ------------ --------------------
56.4 159.0
Non-GAAP income before income taxes
-------------------- -------------- -------------------- -------------------- ------------ --------------------
26.0 % 26.0 %
Assumed rate for income tax expense(1)
(14.7 ) (41.3 )
Assumed provision for income tax expense
-------------------- -------------- -------------------- -------------------- ------------ --------------------
$ 41.7 $ 117.7
Non-GAAP net income
==================== ============== ==================== ==================== ============ ====================
$ 0.02 $ 0.21
Net income per share - diluted
==================== ============== ==================== ==================== ============ ====================
$ 0.10 $ 0.29
Non-GAAP net income per share - diluted
==================== ============== ==================== ==================== ============ ====================
405.6 404.5
Weighted average outstanding shares - basic
407.3 406.2
Weighted average outstanding shares - diluted
(1) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Three Months Ended
March 31, March 31, March 31,
2024 2023
------------------------------------------------------ ----------------------------------------------------
$ 6.7 $ 87.1
Net income
8.8 7.1
Amortization of acquired intangible assets in cost of revenues
11.0 10.6
Amortization of acquired intangible assets in operating expenses
10.3 7.9
Depreciation and other amortization
(56.2 ) (43.5 )
Interest income, net
1.9 (0.6 )
Other expense (income), net(1)
4.8 29.2
Income tax expense
-------------------- -------------- -------------------- -------------------- ------------ --------------------
$ (12.7 ) $ 97.8
EBITDA
-------------------- -------------- -------------------- -------------------- ------------ --------------------
22.8 20.0
Stock-based compensation expense
2.3 1.7
Acquisition and integration related costs
-- 3.4
Restructuring and related costs
-- (0.1 )
Settlements and impairments
-------------------- -------------- -------------------- -------------------- ------------ --------------------
$ 12.4 $ 122.8
Adjusted EBITDA
==================== ============== ==================== ==================== ============ ====================
CoStar Group, Inc.
Condensed Consolidated Balance Sheets - Unaudited
(in millions)
March 31, December 31,
2024 2024 2024 2023 2023
--------------------------------------------------- -------------------- ----------------------------------------------- -------------------- -----------------------------------------------
ASSETS
Current assets:
$ 4,951.6 $ 5,215.9
Cash and cash equivalents
218.7 213.2
Accounts receivable
(21.3 ) (23.2 )
Less: Allowance for credit losses
-------------------- ------- -------------------- -------------------- ------- --------------------
197.4 190.0
Accounts receivable, net
67.2 70.2
Prepaid expenses and other current assets
-------------------- ------- -------------------- -------------------- ------- --------------------
5,216.2 5,476.1
Total current assets
4.3 4.3
Deferred income taxes, net
791.1 472.2
Property and equipment, net
74.8 79.8
Lease right-of-use assets
2,383.7 2,386.2
Goodwill
365.0 313.7
Intangible assets, net
179.0 167.7
Deferred commission costs, net
18.4 17.7
Deposits and other assets
2.0 2.0
Income tax receivable
-------------------- ------- -------------------- -------------------- ------- --------------------
$ 9,034.5 $ 8,919.7
Total assets
==================== ======= ==================== ==================== ======= ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
$ 113.6 $ 23.1
Accounts payable
90.7 117.8
Accrued wages and commissions
195.5 163.0
Accrued expenses and other current liabilities
12.9 7.7
Income taxes payable
44.0 40.0
Lease liabilities
117.1 104.2
Deferred revenue
-------------------- ------- -------------------- -------------------- ------- --------------------
573.8 455.8
Total current liabilities
990.8 990.5
Long-term debt, net
33.8 36.7
Deferred income taxes, net
18.4 18.2
Income taxes payable
75.1 79.9
Lease and other long-term liabilities
-------------------- ------- -------------------- -------------------- ------- --------------------
$ 1,691.9 $ 1,581.1
Total liabilities
-------------------- ------- -------------------- -------------------- ------- --------------------
7,342.6 7,338.6
Total stockholders' equity
-------------------- ------- -------------------- -------------------- ------- --------------------
CoStar Group, Inc.
Condensed Consolidated Statements of Cash Flows - Unaudited
(in millions)
Three Months Ended Three Months Ended
March 31, March 31, March 31,
2024 2024 2023
-------------------- ------------------------------------------------------ ------------------------------------------------------
Operating activities:
$ $ 6.7 $ 87.1
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
33.3 25.6
Depreciation and amortization
27.2 21.9
Amortization of deferred commissions costs
0.6 0.6
Amortization of Senior Notes discount and issuance costs
8.3 6.8
Non-cash lease expense
22.8 20.0
Stock-based compensation expense
(2.8 ) (2.9 )
Deferred income taxes, net
7.9 4.7
Credit loss expense
0.1 0.3
Other operating activities, net
Changes in operating assets and liabilities, net of acquisitions:
(15.6 ) (32.2 )
Accounts receivable
2.2 (5.7 )
Prepaid expenses and other current assets
(38.7 ) (32.3 )
Deferred commissions
77.2 (13.7 )
Accounts payable and other liabilities
(8.1 ) (10.0 )
Lease liabilities
5.4 39.6
Income taxes payable, net
13.1 13.8
Deferred revenue
-- (0.4 )
Other assets
-------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
139.6 123.2
Net cash provided by operating activities
Investing activities:
(376.7 ) (15.7 )
Purchases of property, equipment and other assets for new campuses
(3.6 ) (3.9 )
Purchases of property and equipment and other assets
-------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
(380.3 ) (19.6 )
Net cash used in investing activities
Financing activities:
(26.0 ) (21.6 )
Repurchase of restricted stock to satisfy tax withholding obligations
4.6 5.7
Proceeds from exercise of stock options and employee stock purchase plan
(1.1 ) --
Other financing activities
-------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
(22.5 ) (15.9 )
Net cash used in financing activities
(1.1 ) --
Effect of foreign currency exchange rates on cash and cash equivalents
-------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
(264.3 ) 87.7
Net (decrease) increase in cash and cash equivalents
5,215.9 4,968.0
Cash and cash equivalents at the beginning of period
-------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
CoStar Group, Inc.
Disaggregated Revenues - Unaudited
(in millions)
Three Months Ended March 31, Three Months Ended March 31,
---------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2024 2024 2023
---------------------------- ----------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------
North America North America International Total North America International Total
---------------------------- -------------------------- ---------------------------------- ------------------------- -------------------------- ---------------------------------- -------------------------
$ $ 235.7 $ 14.6 $ 250.3 $ 215.8 $ 9.2 $ 225.0
CoStar
27.4 5.6 33.0 32.1 9.5 41.6
Information Services
254.8 -- 254.8 210.7 -- 210.7
Multifamily
66.4 2.7 69.1 61.2 2.1 63.3
LoopNet
8.4 10.2 18.6 13.2 -- 13.2
Residential
30.6 -- 30.6 30.6 -- 30.6
Other Marketplaces
---------------------------- -------------------- ------ -------------------- -------------- -------------------- ----- -------------------- ------ -------------------- -------------- -------------------- -----
$ $ 623.3 $ 33.1 $ 656.4 $ 563.6 $ 20.8 $ 584.4
Total revenues
============================ ==================== ====== ==================== ============== ==================== ===== ==================== ====== ==================== ============== ==================== =====
CoStar Group, Inc.
Results of Segments - Unaudited
(in millions)
Three Months Ended Three Months Ended Three Months Ended
March 31, March 31,
2024 2024 2023
-------------------- ---------------------------------------------- ------------------------------
EBITDA
$ $ 3.2 $ 96.6
North America
(15.9 ) 1.2
International
-------------------- -------------------- ------ -------------------- -------------------- ----------
CoStar Group, Inc.
Reconciliation of Non-GAAP Financial Measures with Quarterly Results - Unaudited
(in millions, except per share data)
Reconciliation of Net Income to Non-GAAP Net Income
2023 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------
Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1
$ 87.1 $ $ 100.5 $ $ 90.6 $ $ 96.4 $ 6.7
Net income
29.2 31.1 29.9 36.3 4.8
Income tax expense
-------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
116.4 131.7 120.5 132.7 11.5
Income before income taxes
17.7 18.0 18.7 19.3 19.8
Amortization of acquired intangible assets
20.0 21.8 21.9 21.2 22.8
Stock-based compensation expense
1.7 (0.2 ) 0.8 10.7 2.3
Acquisition and integration related costs
3.4 (0.1 ) 0.5 0.2 --
Restructuring and related costs
(0.1 ) -- -- -- --
Settlements and impairments
-- -- -- (3.8 ) --
Other income, net
-------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
159.1 171.2 162.4 180.3 56.4
Non-GAAP income before income taxes(1)
26 % 26 % 26 % 26 % 26 %
Assumed rate for income tax expense (2)
(41.4 ) (44.5 ) (42.2 ) (46.9 ) (14.7 )
Assumed provision for income tax expense
-------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 117.7 $ $ 126.7 $ $ 120.2 $ $ 133.4 $ 41.7
Non-GAAP net income(1)
==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ============== ====================
------------------------------------------------------ -------------------- ------------------------------------------------------ -------------------- ------------------------------------------------------ -------------------- ------------------------------------------------------ ------------------------------------------------------
$ 0.29 $ $ 0.31 $ $ 0.30 $ $ 0.33 $ 0.10
Non-GAAP net income per share - diluted
==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ============== ====================
404.5 405.4 405.6 405.8 405.6
Weighted average outstanding shares - basic
406.2 406.8 407.2 407.5 407.3
Weighted average outstanding shares - diluted
(1) Totals may not foot due to rounding.
(2) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
2023 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------
Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1
$ 87.1 $ $ 100.5 $ $ 90.6 $ $ 96.4 $ 6.7
Net income
17.7 18.0 18.7 19.3 19.8
Amortization of acquired intangible assets
7.9 8.1 8.4 9.4 10.3
Depreciation and other amortization
(43.5 ) (51.9 ) (58.4 ) (59.7 ) (56.2 )
Interest income, net
(0.6 ) (0.6 ) (0.5 ) (3.7 ) 1.9
Other (income) expense, net
29.2 31.1 29.9 36.3 4.8
Income tax expense
-------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 97.8 $ $ 105.2 $ $ 88.7 $ $ 98.0 $ (12.7 )
EBITDA(1)
-------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
20.0 21.8 21.9 21.2 22.8
Stock-based compensation expense
1.7 (0.2 ) 0.8 10.7 2.3
Acquisition and integration related costs
3.4 (0.1 ) 0.5 0.2 --
Restructuring and related costs
(0.1 ) -- -- -- --
Settlements and impairments
-------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 122.9 $ $ 126.8 $ $ 111.9 $ $ 130.1 $ 12.4
Adjusted EBITDA(1)
==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ============== ====================
CoStar Group, Inc.
Reconciliation of Forward-Looking Guidance - Unaudited
(in millions, except per share data)
Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income
Guidance Range Guidance Range Guidance Range
For the Three Months For the Three Months For the Year Ending
Ending June 30, 2024 Ending June 30, 2024 December 31, 2024
Low Low High Low High
-------------------- ------------------------------------------------------ ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
$ $ 1.0 $ 5.0 $ 97.0 $ 112.0
Net income
3.0 4.0 52.0 57.0
Income tax expense
-------------------- -------------------- -------------- -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ --------------------
4.0 9.0 149.0 169.0
Income before income taxes
17.0 17.0 71.0 71.0
Amortization of acquired intangible assets
25.0 25.0 98.0 98.0
Stock-based compensation expense