CoStar Group 2022 Revenue Increased 12% Year-over-Year and Full Year Net New Bookings Grew 41% to a Record $305 Million

WASHINGTON – February 21, 2023 - CoStar Group, Inc. (NASDAQ: CSGP), a leading provider of online real estate marketplaces, information and analytics in the property markets, announced today that revenue for the year ended December 31, 2022 was $2.18 billion, an increase of 12% over revenue of $1.94 billion for the full year of 2021. Revenue for the fourth quarter of 2022 was $573 million, an increase of 13% over revenue of $507 million for the fourth quarter of 2021.

Net income for the year ended December 31, 2022, was $369 million, an increase of 26% compared to net income of $293 million for the full year of 2021. Net income for the fourth quarter of 2022 was $124 million, or $0.31 per diluted share, an increase of 34% compared to net income of $93 million for the fourth quarter of 2021. Adjusted EBITDA was $672 million for the full year and $182 million for the fourth quarter of 2022.

“2022 was an outstanding year for CoStar Group,” said Andy Florance, Founder and Chief Executive Officer of CoStar Group. “We delivered 12% year over year revenue growth while setting a record for full year net new sales bookings of $305 million, an increase of 41% over 2021. Our two largest product platforms, CoStar and Apartments.com, delivered revenue growth of 15% and 16%, respectively, in the fourth quarter, while LoopNet revenue grew 12% to end the year. I believe our efforts to expand our sales team in 2022 are starting to pay off,” continued Florance.

“I’m particularly pleased with the revenue growth acceleration in Apartments.com, which began the year with 6% year-over-year revenue growth in the first quarter and ended the year with 16% year-over-year revenue growth in the fourth quarter,” stated Florance, “Net new bookings for Apartments.com in the fourth quarter were the highest ever, increasing 177% compared to the same period in 2021. This performance is expected to return Apartments.com to 20% or higher revenue growth during 2023,” continued Florance.

“We've made great progress on our residential strategy in 2022,” stated Florance. “Traffic to our Homes.com network has passed 20 million unique monthly visitors and has doubled in the last few months. Our new product received an incredible response from agents at the National Association of Realtors trade show recently, while our “your listing, your lead” strategy is delivering hundreds of thousands of valuable consumer leads directly to listing agents. Given the strong momentum of Homes.com, we plan to increase our residential investments in the year ahead,” continued Florance.

(1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

The Company expects revenue in the range of $2.46 billion to $2.48 billion for the full year of 2023, representing growth of approximately 13% year-over-year at the midpoint of the range. The Company expects revenue for the first quarter of 2023 in the range of $575 million to $580 million, representing revenue growth of approximately 12% year-over-year at the midpoint of the range.

The Company expects adjusted EBITDA in the range of $500 million to $520 million for the full year of 2023. For the first quarter of 2023, the Company expects adjusted EBITDA in the range of $111 million to $116 million.

The Company expects full year 2023 non-GAAP net income per diluted share in a range of $1.06 to $1.09 based on 408 million shares. For the first quarter of 2023, the Company expects non-GAAP net income per diluted share in a range of $0.25 to $0.26 based on 407 million shares. These ranges include an estimated non-GAAP tax rate of 26% for the full year and the first quarter of 2023.

The preceding forward-looking statements reflect CoStar Group’s expectations as of February 21, 2023, 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.

Reconciliation of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share to their GAAP basis results 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.

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 (expense) income and other (expense) income, loss on debt extinguishment, income taxes, depreciation and amortization.

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 normal 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 normal 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 2023, 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.

Net new bookings is calculated based on the annualized amount of change in the Company's sales bookings resulting from new subscription-based contracts and changes to existing 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.

Management will conduct a conference call to discuss the fourth quarter and full year 2022 results and the Company’s outlook at 5:00 PM EST on Tuesday, February 21, 2023. 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.
Reconciliation of Forward-Looking Guidance - Unaudited
(in thousands, except per share data)
Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income
			Guidance Range												Guidance Range
			For the Three Months												For the Year Ending
			Ending March 31, 2023												December 31, 2023
			Low						High						Low						High
Net income			$	71,000					$	75,000					$	314,000					$	329,000
Income tax expense			25,000						26,000						110,000						115,000
Income before income taxes			96,000						101,000						424,000						444,000
Amortization of acquired intangible assets			18,000						18,000						69,000						69,000
Stock-based compensation expense			21,000						21,000						88,000						88,000
Acquisition and integration related costs			1,000						1,000						1,000						1,000
Settlements and impairments			—						—						—						—
Other expense, net			—						—						—						—
Non-GAAP income before income taxes			136,000						141,000						582,000						602,000
Assumed rate for income tax expense(1)			26		%				26		%				26		%				26		%
Assumed provision for income tax expense			(35,400)						(36,700)						(151,300)						(156,500)
Non-GAAP net income			$	100,600					$	104,300					$	430,700					$	445,500
Net income per share - diluted			$	0.17					$	0.18					$	0.77					$	0.81
Non-GAAP net income per share - diluted			$	0.25					$	0.26					$	1.06					$	1.09
Weighted average outstanding shares - diluted			406,600						406,600						407,700						407,700
__________________________
(1) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period.
Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA
			Guidance Range												Guidance Range
			For the Three Months												For the Year Ending
			Ending March 31, 2023												December 31, 2023
			Low						High						Low						High
Net income			$	71,000					$	75,000					$	314,000					$	329,000
Amortization of acquired intangible assets			18,000						18,000						69,000						69,000
Depreciation and other amortization			8,000						8,000						34,000						34,000
Interest (income), net			(33,000)						(33,000)						(116,000)						(116,000)
Other expense, net			—						—						—						—
Income tax expense			25,000						26,000						110,000						115,000
Stock-based compensation expense			21,000						21,000						88,000						88,000
Acquisition and integration related costs			1,000						1,000						1,000						1,000
Settlements and impairments			—						—						—						—
Adjusted EBITDA			$	111,000					$	116,000					$	500,000					$	520,000

    

Cyndi Eakin
Senior Vice President
CoStar Group Investor Relations
(202) 346-6784

ceakin@costar.com

Matthew Blocher

Vice President

CoStar Group Corporate Marketing & Communications

(202) 346-6775

mblocher@costar.com

CoStar Group, Inc. (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information and analytics. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our portfolio of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homes.com offers real estate professionals advertising and marketing services for residential properties. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada and Asia. From time-to-time we plan to utilize our corporate website, www.costargroup.com, as a channel of distribution for material company information.

This news release and the Company’s earnings conference call contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about CoStar Group's plans, objectives, expectations, beliefs and intentions and other statements including words such as “hope,” “anticipate,” “may,” “believe,” “expect,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology. Such statements are based upon the current beliefs and expectations of management of CoStar Group and are subject to many risks and uncertainties. Actual results may differ materially from the results anticipated in the forward-looking statements and the assumptions and estimates used as a basis for the forward-looking statements. The following factors, among others, could cause or contribute to such differences: the risk that the trends stated or implied by this release or in the earnings conference call cannot or will not be sustained at the current pace or may increase or decrease, including trends and expectations related to revenue, revenue growth, net income, non-GAAP net income, EBITDA, adjusted EBITDA, adjusted EBITDA margin, sales, net new bookings, site traffic and visitors, leads, and renewal rates; the risk that the Company is unable to sustain current Company-wide, CoStar, Apartments or LoopNet net new bookings; the risk that revenues for the first quarter and full year 2023 will not be as stated in this press release; the risk that net income for the first quarter and full year 2023 will not be as stated in this press release; the risk that EBITDA for the first quarter and full year 2023 will not be as stated in this press release; the risk that adjusted EBITDA for the first quarter and full year 2023 will not be as stated in this press release; the risk that non-GAAP net income and non-GAAP net income per diluted share for the first quarter and full year 2023 will not be as stated in this press release; the risk that we may not successfully integrate acquired businesses or assets and may not achieve anticipated benefits of an acquisition, including expected synergies; the risk that the tax rate estimates stated in this press release may change and the risk that we may experience declines in our revenues, revenue growth rates and profitability due to the impact of economic conditions on the real estate industry and our core customer base. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar Group’s filings from time to time with the Securities and Exchange Commission, including in CoStar Group’s Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Report on Forms 10-Q for the quarters ended March 31, 2022; June 30, 2022 and September 30, 2022, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar Group’s other filings with the SEC (including Current Reports on Form 8-K) available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar Group on the date hereof, and CoStar Group assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.