CoStar Group Earnings Call Highlights Growth and Profit

CoStar Group ((CSGP)) has held its Q1 earnings call. Read on for the main highlights of the call.

CoStar Group’s latest earnings call struck an upbeat tone, with management highlighting strong revenue growth, surging profitability, and rapid traction in its residential platforms. While executives acknowledged near-term headwinds from salesforce ramp-up, seasonality, and some still-loss-making operations, the overall message was one of accelerating momentum and rising confidence in 2026 targets.

Strong Top-Line Growth

CoStar reported Q1 2026 revenue of $897 million, up 23% year over year and near the high end of guidance. Management emphasized that organic revenue growth reached 10%, signaling that the underlying business is expanding solidly even without acquisitions.

Adjusted EBITDA Outperformance

Adjusted EBITDA reached $132 million in Q1, doubling from a year ago and beating the high end of guidance by $17 million. That performance was described as 26% above the midpoint of earlier guidance, prompting management to lift full-year adjusted EBITDA to a range of $780 million to $820 million.

EPS Upgrade and Share Buybacks

CoStar raised its full-year adjusted EPS forecast to $1.32 to $1.39, an increase of $0.09 at the midpoint compared with prior guidance. The company also repurchased 11.4 million shares for $505 million in the quarter and plans to complete $700 million of buybacks across 2026, signaling confidence in long-term value.

Residential Segment Momentum

The residential segment delivered about $425 million in Q1 revenue, up roughly 32% year over year as the business continues to scale. Adjusted EBITDA in residential improved by $56 million and management expects the segment to cross into profitability in the second quarter of 2026.

Homes.com Rapid Growth and ROI

Homes.com posted Q1 revenue of $26 million, rising 58% year over year as the platform gains share in residential listings. The site added 4,300 members in the quarter, reached 35,175 paying agents, and company analysis shows the average subscriber earned about $36,400 in incremental commissions in the first year, implying an 11x return on the typical subscription.

Net New Bookings Acceleration

Net new bookings came in at $67 million in Q1, up 20% from the prior year and building on what management called a record 2025. Leaders stressed that 2026 is off to an even stronger start in terms of contracted business, though they cautioned that quarterly bookings can still be noisy.

Commercial Business Strength

Commercial revenue reached $472 million in Q1, up 15% from a year earlier, and generated a 34% adjusted EBITDA margin, or $161 million of profit. CoStar-branded product revenue rose 9% to $331 million, with user counts expanding 22% to 317,000, underscoring the franchise’s entrenched position in commercial real estate data.

LoopNet and Marketplace Execution

LoopNet delivered Q1 revenue of $85 million, growing 16% year over year with 11% organic growth as digital marketplaces remain a key engine. Paid listings rose 10% in the U.S., 35% in Canada, and 63% in the U.K., while European unique visitors more than doubled to over 900,000 per month, supporting the international expansion story.

Matterport Integration and Engagement

Matterport subscription revenue climbed 19% year over year as 3D tours become more widely adopted across real estate verticals. CoStar is integrating Matterport across Apartments.com, Homes.com, LoopNet, and other platforms, and early data show listings with Matterport drive 46% more time spent on-page and much higher tour-request activity.

Apartments.com Engagement and Innovation

Apartments.com generated $312 million of revenue in Q1, with management citing 10% growth alongside heavy renter engagement, including 220 million visits, 370,000 tours, and 300,000 applications. The platform maintained a 99% monthly renewal rate and an NPS of 89, while new features like Smart Search and an upcoming Apartments AI engine are designed to deepen user stickiness.

International Expansion Gains Traction

Internationally, CoStar U.K. revenue increased 25% and net new bookings jumped 44%, while Canada posted 22% revenue growth. Domain Australia reported Q1 revenue of $68 million with users up 47% and listings up 28%, and CoStar plans to launch CoStar and LoopNet in Australia later this year alongside a CoStar France rollout in the second quarter.

Product and AI-Driven Progress

Management spotlighted a wave of AI features, including Homes AI, where users reportedly spend four times longer and generate seven times more leads. The company is also deploying AI lease abstraction in Real Estate Manager, expanding hotel profitability benchmarking via STR, and building AI tools for commercial real estate debt analytics and loan-origination workflows.

Sales Productivity and Bookings Variability

Analysts pressed management on three straight quarters of sequential net bookings decline, despite year-over-year growth. Executives pointed to a recently expanded salesforce, especially at Homes.com, noting that new sales hires need time to ramp and that this ramp creates variability across cohorts and quarters.

Residential Profitability Still a Work in Progress

Residential adjusted EBITDA was still negative $29 million in the quarter, even though losses narrowed significantly. Management reiterated that residential should reach breakeven or better in Q2, but investors were reminded that near-term profitability remains a headwind as the company continues heavy growth investment.

Rooftop Mix and ARPU Pressure

CoStar noted that it onboarded rooftops migrating from Rent.com that skew smaller and lower priced. This shift in property mix pressured average revenue per rooftop and contributed to some revenue headwinds, even as overall unit counts and customer relationships expand.

Market Demand Softness

Management cited external data showing that rental search activity remains soft, reflecting broader market and macro headwinds. Competitive platforms have also seen weaker traffic, with one major rival reporting a decline in unique visitors, which CoStar framed as evidence of cyclical softness rather than company-specific issues.

Domain Australia Seasonality and Mix Shifts

Domain’s business in Australia experienced typical seasonal softness, with Q1 described as a weaker period sequentially despite year-on-year growth. The unit also discontinued certain advertising formats to improve profitability, which weighed on short-term revenue but is expected to support healthier margins over time.

Lack of Bookings Guidance

The company declined to issue bookings guidance for the second quarter, a decision that analysts said makes forecasting more challenging. Management argued that bookings can be uneven quarter to quarter and that focusing investors on revenue and profit targets better reflects underlying business health.

Homes.com Pricing and Monetization Risk

CoStar plans a price increase for new Homes.com subscribers, with potential measured hikes for renewals later, citing the strong ROI already delivered to agents. Still, executives acknowledged that higher pricing always carries execution risk around adoption, churn, and the pace of adding new paying members.

Seasonality and Timing Effects

Executives highlighted normal seasonality patterns, with Q1 usually lighter and Q2 typically the strongest quarter for activity. They also noted that the timing of new sales hires creates a lag between headcount growth and revenue, which can temporarily distort bookings and growth momentum on a quarterly basis.

Guidance and Outlook

For Q2 2026, CoStar guided revenue to $922 million to $932 million, implying 18% to 19% growth and roughly 10% organic expansion at the midpoint, along with adjusted EBITDA of $160 million to $180 million and EPS of $0.27 to $0.30. For the full year, the company reaffirmed revenue of $3.78 billion to $3.82 billion, raised adjusted EBITDA to $780 million to $820 million, nudged EPS guidance higher, and reiterated plans for significant share repurchases.

CoStar’s call painted a picture of a company leaning into growth, especially in residential and AI-powered products, while steadily lifting profitability and returning capital to shareholders. Investors will be watching whether Homes.com can sustain its rapid expansion and whether the enlarged salesforce converts into durable bookings growth, but management’s higher guidance suggests confidence that the strategy is working.