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CoStar Group CSGP reported non-GAAP earnings of 26 cents per share in fourth-quarter 2024, which surpassed the Zacks Consensus Estimate by 18.18%. The company had registered earnings of 33 cents in the year-ago quarter, decreasing 21.2% year over year.
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Revenues of $709.4 million beat the Zacks Consensus Estimate by 1.20% and increased 10.8% year over year. This represents the company’s 55th consecutive quarter of double-digit revenue growth.
Following the results, CSGP shares fell 4.25% in the after-hours trading on Feb. 18, as the initial reaction reflected concerns over rising expenses.
CoStar Group, Inc. Price, Consensus and EPS Surprise
CoStar Group, Inc. price-consensus-eps-surprise-chart | CoStar Group, Inc. Quote
However, in the fourth quarter, CoStar Group benefited from strong performance across its digital platforms, driven by increased customer engagement, expanded market reach and solid top-line growth, driven by robust performances in key segments, which could drive the stock performance.
CSGP’s Top-Line Details
CoStar’s revenues (36.7% of revenues) of $260.3 million missed the consensus estimate by 0.15% and increased 9.5% year over year.
Apartments.com’s revenues increased 17% year over year. Net new bookings in the fourth quarter amounted to $53 million, up 21% sequentially.
Information Services’ revenues (5.1% of revenues) of $36.5 million beat the consensus mark by 17.04% but declined 14.5% year over year.
Multifamily revenues (39% of revenues) of $276.5 million missed the consensus estimate by 0.29% but increased 13.4% year over year.
LoopNet’s revenues (10.1% of revenues) of $71.9 million exceed the consensus mark by 0.26% and increased 5% year over year.
Fourth-quarter residential revenues (4% of revenues) were $28.1 million, which missed the consensus mark by 1.40% and increased 181% year over year.
In the fourth quarter of 2024, Homes.com became the second-largest residential real estate marketplace in the United States, attracting an average of 110 million unique monthly visitors, marking an 11% year-over-year increase.
Other marketplace revenues (5.1% of revenues) of $36.1 million beat the consensus mark by 12.46% but declined 3.5% year over year.
Per Google Analytics, CoStar’s global websites reached a record 134 million average monthly unique visitors, a 17% year-over-year increase.
CoStar’s Operating Details
In the reported quarter, selling and marketing expenses increased 25.1% year over year to $308.5 million. As a percentage of revenues, selling and marketing expenses were 43.5% compared with 38.5% in the year-ago quarter.
General and administrative expenses, as a percentage of revenues, expanded 90 basis points (bps) on a year-over-year basis to 16.6%.
Software development expenses, as a percentage of revenues, expanded 70 bps, while Customer base amortization expenses rose 10 basis points year over year.
Operating expenses increased 21.6% year over year to $528.5 million. As a percentage of revenues, operating expenses rose 660 bps year over year to 74.5%.
Adjusted EBITDA was $112 million compared with the year-ago quarter’s $130 million. The adjusted EBITDA margin contracted 450 bps to 15.8%.