CoStar Group Inc.
CSGPBusiness Overview
ticker: CSGP step: 01 generated: 2026-05-12 source: quick-research
CoStar Group Inc. (CSGP) — Business Overview
Business Description
CoStar Group is the dominant information, analytics, and marketplace platform for commercial and residential real estate in the U.S. and internationally. Founded in 1987 by CEO Andrew Florance, the company has built its moat over 38 years and $5B+ in proprietary data investment across two segments: Commercial (CoStar Suite, LoopNet, STR hospitality data, Matterport 3D digital twins) and Residential (Apartments.com, Homes.com, Domain AU). The company has achieved 59 consecutive quarters of double-digit revenue growth as of Q1 2026.
Revenue Model
CoStar generates ~80% of revenue from annual subscription contracts, creating highly predictable, recurring cash flows. The CoStar Suite provides institutional CRE professionals with comprehensive property data, analytics, and news — sold on a per-seat/enterprise subscription basis. LoopNet monetizes through tiered property listing memberships. Apartments.com and Homes.com generate revenue from landlord/agent listing subscriptions and lead generation. STR charges subscription fees for hospitality benchmarking. Matterport (acquired February 2025) monetizes 3D digital twin creation and hosting. Contract renewal rates are 89% overall and 94% for customers with 5+ years on the platform.
Products & Services
- CoStar Suite — comprehensive CRE database: property records, lease comps, sales comps, analytics
- LoopNet — #1 commercial real estate marketplace (8.5× more searches than nearest competitor)
- Apartments.com — leading multifamily rental marketplace; ~$1.2B annualized revenue run rate
- Homes.com — fast-growing residential for-sale portal; backed by >$2B cumulative investment
- STR — global hospitality data and benchmarking (hotels/short-term rentals)
- Matterport — 3D digital twin platform for physical spaces (acquired Feb 2025)
- Domain (Australia) — leading residential property marketplace
Customer Base & Go-to-Market
CoStar Suite and LoopNet serve institutional CRE buyers: brokers, investors, lenders, appraisers, and corporate real estate teams. Apartments.com serves property managers and landlords at all scales. Homes.com targets residential agents and consumers. STR serves hotels, REITs, and hospitality operators. The company employs a large direct salesforce supplemented by product-led growth on the consumer-facing portals.
Competitive Position
CoStar is effectively a natural monopoly in CRE data — 38 years and $5B+ of field research create a database that competitors cannot replicate. Its 10,000+ daily property updates and proprietary lease/sales comp database are deeply embedded in institutional workflows (Bloomberg-like stickiness). LoopNet dominates CRE marketplace traffic. Apartments.com is the clear #1 in multifamily listings. The weaker competitive position is in residential for-sale (Homes.com), where Zillow and Realtor.com have dominant incumbent positions and massive brand advantages.
Key Facts
- Founded: 1987
- Headquarters: Washington, D.C.
- Employees: ~6,200
- Exchange: NASDAQ
- Sector / Industry: Real Estate / Real Estate Services
- Market Cap: ~$16B
Financial Snapshot
ticker: CSGP step: 04 generated: 2026-05-12 source: quick-research
CoStar Group Inc. (CSGP) — Financial Snapshot
Income Statement Summary
| Metric | FY2022 | FY2023 | FY2024 | YoY |
|---|---|---|---|---|
| Revenue | $2.18B | $2.46B | $2.74B | +11% |
| Gross Margin | ~73% | ~74% | ~72% | -2pp |
| Operating Margin | ~8% | ~7% | ~2% | -5pp |
| Net Income | $369M | $375M | ~$100M | ~-73% |
| EPS (diluted) | $0.93 | $0.92 | ~$0.25 | ~-73% |
Note: Declining net income reflects massive Homes.com investment (~$700M+ annual losses). The core commercial and Apartments.com businesses are highly profitable. FY2025 revenue was $3.2B (+19%) with only $7M net income and $442M Adjusted EBITDA (+83%) — a cleaner proxy for core profitability.
Cash Flow & Balance Sheet (FY2024/2025)
| Metric | Value |
|---|---|
| Operating Cash Flow | ~$150M (FY2024) |
| Free Cash Flow | ~$40M (FY2025E, depressed by Homes.com) |
| FCF (2026E) | ~$490M (post-Homes.com spend reduction) |
| Cash & Equivalents | ~$3.5B net cash |
| Total Debt | Minimal (net cash position of $3.53B) |
Key Ratios (approximate)
- P/E: N/M (earnings near zero) | EV/Sales: ~3.9x | Adj EV/EBITDA: ~28x (FY2025)
- Revenue Growth (FY2024): +11% | Revenue Growth (FY2025): +19%
- Net Margin (FY2025): 0.2% | Adj EBITDA Margin (FY2025): ~14%
Growth Profile
CoStar's topline continues to compound at 11–19% annually on the strength of its core data and marketplace franchises. The fundamental story is that Apartments.com (~$1.2B run rate) and CoStar Suite are highly profitable businesses whose earnings are masked by Homes.com losses of $700M+/year. Management has now cut Homes.com spend by ~$300M in 2026 and ~$100M annually through 2030, which should drive rapid FCF expansion from ~$40M (FY2025) to ~$490M (FY2026E) — a 1,100%+ increase. The Matterport acquisition (Feb 2025) adds a 3D spatial data capability with additional long-term monetization potential.
Forward Estimates
- FY2026E: FCF ~$490M (consensus), Adj EBITDA expansion continuing
- Q1 2026E EPS: $0.16–$0.19 (below $0.23 consensus — margin headwinds more persistent than expected)
- Homes.com projected break-even: 2030 per management guidance
Deeper Financial Analysis
The fundamental tier adds 9 additional research dimensions for $CSGP.