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01/11 04:24
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presented positive financial metrics, including significant growth in CoStar subscribers and net new bookings, as well as strong performance in Homes.com. Despite some negative sentiment regarding market listing exemptions, the overall guidance and strategic updates, such as Matterport integration and investment shifts, suggest optimism. The positive guidance and strategic initiatives outweigh concerns, particularly with the large market cap of $34 billion, indicating a likely positive stock price movement in the short term.
Revenue $732,000,000, a 12% increase year over year.
Adjusted EBITDA $66,000,000, a 429% increase over Q1 2024.
Profit Margin 43% profit margin in Q1 2025 for commercial real estate and information marketplace businesses.
Net New Bookings $56,000,000, up 6% sequentially from Q4 2024.
CoStar Revenue $265,000,000, up 6% year over year.
Apartments.com Revenue $282,000,000, an increase of 11% over Q1 2024.
BizVice Sale Revenue $8,700,000, representing a 10% increase year over year.
Average Unique Visitors 130,000,000 average unique visitors to global websites in Q1 2025.
Homes.com Revenue $27,000,000 in Q1 2025.
Net Loss $15,000,000 net loss due primarily to one-time costs from closing the Matterport acquisition.
Net Investment Income $38,500,000 on $3,800,000,000 in cash, yielding 4.1%.
Contract Renewal Rate 89% in Q1 2025, with 94% for customers who have been subscribers for five years or longer.
Subscription Revenue 80% of total revenue for Q1 2025.
Share Repurchase 240,000 shares repurchased for an aggregate cost of $18,500,000.
Matterport Contribution to Revenue $15,900,000 for the quarter.
Matterport Adjusted EBITDA Loss $2,700,000 for the first quarter stub period.
Annualized Net New Bookings for International Businesses Over $5,000,000 ARR in Q1 2025, representing 56% year over year growth.
LoopNet Revenue Growth 5% in Q1 2025.
LoopNet Annualized Net New Bookings Growth 200% year over year.
Average Monthly Unique Visitors for Apartments.com 38,000,000 in Q1 2025.
Average Monthly Unique Visitors for Homes.com 4,000,000 in Q1 2025.
Sales Volume Recovery Sales volume while recovering is about one-third of normal levels.
Average Number of Activities per Subscriber 100,000,000 activities each month.
Sales Team Growth Sales team grew by 56 sales professionals so far this year.
Sales Team Net Promoter Score 94 during the quarter.
Annualized Subscription Revenue Growth for CoStar Real Estate Manager and Visual Lease Nearing double digits.
Land.com Net New Bookings Increased 58%.
STR Net New Bookings Growth Up 17% year over year.
CoStar Subscribers Growth 17% year over year.
CoStar for Lenders Net New Bookings Growth Up 116% year over year.
CoStar's Market Cap $34,000,000,000.
CoStar's Total Addressable Market for Lender Well above $1,000,000,000.
CoStar's Average Unique Visitors for Apartments.com Canada 350% year over year growth.
CoStar's Average Unique Visitors for Homes.com 9 times increase in unaided awareness to 36%.
CoStar's Average Unique Visitors for Homes.com 1 billion visits in the past twelve months.
CoStar's Average Unique Visitors for Homes.com $500 monthly membership fee.
CoStar's Average Unique Visitors for Homes.com $15,000 average value of winning a new listing.
CoStar's Average Unique Visitors for Homes.com $900,000,000 in change originally targeted for the year.
CoStar's Average Unique Visitors for Homes.com $50,000,000 in annualized savings.
CoStar's Average Unique Visitors for Homes.com $1,000,000,000 to $9,000,000,000 of potential EBITDA in the US.
CoStar's Average Unique Visitors for Homes.com $3,000,000,000 annual marketing spend by America’s Homebuilders.
CoStar's Average Unique Visitors for Homes.com $4.43 Australian dollars per share offer for Domain Group.
CoStar's Average Unique Visitors for Homes.com $290,000,000 US dollars for 16.9% of Domain's outstanding shares.
CoStar's Average Unique Visitors for Homes.com $250,000,000 in 2024 annual revenue for Domain.
CoStar's Average Unique Visitors for Homes.com $88,000,000 EBIT for Domain.
CoStar's Average Unique Visitors for Homes.com $70,000,000 expected revenue for second quarter.
CoStar's Average Unique Visitors for Homes.com $135,000,000 to $140,000,000 expected contribution from Matterport.
CoStar's Average Unique Visitors for Homes.com $3,115,000,000 to $3,155,000,000 expected revenue for full year.
CoStar's Average Unique Visitors for Homes.com $355,000,000 to $385,000,000 expected adjusted EBITDA for 2025.
CoStar's Average Unique Visitors for Homes.com $50,000,000 in annualized savings.
CoStar's Average Unique Visitors for Homes.com $1,000,000,000 to $9,000,000,000 of potential EBITDA in the US.
CoStar's Average Unique Visitors for Homes.com $4.43 Australian dollars per share offer for Domain Group.
CoStar's Average Unique Visitors for Homes.com $290,000,000 US dollars for 16.9% of Domain's outstanding shares.
CoStar's Average Unique Visitors for Homes.com $250,000,000 in 2024 annual revenue for Domain.
CoStar's Average Unique Visitors for Homes.com $88,000,000 EBIT for Domain.
CoStar's Average Unique Visitors for Homes.com $70,000,000 expected revenue for second quarter.
CoStar's Average Unique Visitors for Homes.com $135,000,000 to $140,000,000 expected contribution from Matterport.
CoStar's Average Unique Visitors for Homes.com $3,115,000,000 to $3,155,000,000 expected revenue for full year.
CoStar's Average Unique Visitors for Homes.com $355,000,000 to $385,000,000 expected adjusted EBITDA for 2025.
Matterport Integration: Matterport contributed $15,900,000 in revenue for Q1 2025, with plans for deeper integration across CoStar's platforms.
Apartments.com Growth: Apartments.com revenue grew 11% year over year, with a focus on increasing the number of listed properties.
LoopNet Performance: LoopNet achieved its highest net new bookings quarter in nearly three years, with a revenue growth of 5%.
Homes.com Marketing Campaign: Homes.com has seen a ninefold increase in unaided brand awareness to 36% and is now the second most visited US residential portal.
New Product Launch - Boost: A new purchase option called Boost allows agents to market a single listing, enhancing their visibility.
International Expansion: International businesses achieved over $5,000,000 in annual recurring revenue (ARR) in Q1 2025, representing 56% year-over-year growth.
Acquisition of Domain Holdings: CoStar made a nonbinding offer to acquire Domain Holdings, a major Australian real estate portal, to expand its market presence.
Cost Savings Initiatives: Released over $50,000,000 in annualized savings through cost reduction initiatives, particularly in Homes.com.
Sales Force Expansion: Increased sales force by 600% for Homes.com, now totaling 314 sales reps.
Shift in Sales Strategy: LoopNet's sales strategy shifted to focus on broad subscription packages for owners and brokers, enhancing overall sales performance.
Integration of Leadership: Consolidation of leadership and operations across brands to enhance market positioning and operational efficiencies.
Market Conditions: The company is operating in one of the worst commercial real estate environments in decades, with historic high vacancy rates and low asking rents.
Regulatory Issues: The NAR's delayed market listing exemption has received overwhelmingly negative feedback from agents, indicating potential regulatory challenges.
Competitive Pressures: Zillow's aggressive new policy banning homes privately marketed for over 24 hours may create competitive pressures, as agents seek alternatives to lead diversion platforms.
Supply Chain Challenges: The integration of Matterport and other acquisitions may present operational challenges as the company seeks to embed these technologies across its platforms.
Economic Factors: The company anticipates slight headwinds from government contract cancellations expected throughout 2025, which could impact revenue growth.
Cancellations and Renewals: The company experienced a high early cancellation rate of 10% for Homes.com, although this has improved significantly to between 0.25% and 2.5%.
Investment Risks: The company is managing costs and has reduced headcount, which may impact operational capacity and growth potential.
Revenue Growth: Q1 2025 revenue was $732 million, a 12% increase year over year, marking the 56th consecutive quarter of double-digit revenue growth.
Adjusted EBITDA: Adjusted EBITDA for Q1 2025 was $66 million, a 429% increase over Q1 2024, with a 43% profit margin in commercial real estate and information marketplace businesses.
Net New Bookings: Net new bookings were $56 million in Q1 2025, up 6% sequentially from Q4 2024.
International Growth: International businesses achieved over $5 million in annual recurring revenue (ARR) in Q1 2025, representing 56% year-over-year growth.
Apartments.com Growth: Apartments.com revenue grew 11% year over year to $282 million, with a focus on increasing the sales team by 23% to capture a $2.6 billion opportunity.
Homes.com Marketing Campaign: A significant marketing campaign for Homes.com has increased unaided brand awareness to 36% and positioned it as the second most visited US residential portal.
Matterport Integration: Matterport's technology will be integrated across CoStar's platforms, enhancing user experience and expected to drive revenue growth.
Acquisition of Domain Holdings: CoStar made a nonbinding offer to acquire Domain Holdings, a profitable real estate portal in Australia, with potential for significant revenue growth.
2025 Revenue Guidance: Full year 2025 revenue is expected to be between $3.115 billion and $3.155 billion, implying a growth rate of 14% to 15%.
Q2 2025 Revenue Guidance: Q2 2025 revenue is expected to be in the range of $770 million to $775 million, representing 14% year-over-year growth.
2025 Adjusted EBITDA Guidance: 2025 adjusted EBITDA is expected to be in the range of $355 million to $385 million, reflecting an adjusted EBITDA margin of approximately 12%.
Apartments.com Revenue Guidance: Full year 2025 revenue guidance for Apartments.com remains at 11% to 12% growth.
LoopNet Revenue Growth: LoopNet revenue is expected to grow 7% in Q2 2025, with accelerating growth throughout the year.
Share Repurchase Program: In Q1 2025, CoStar Group repurchased 240,000 shares for an aggregate cost of $18,500,000. The company anticipates repurchasing a total of $150,000,000 of shares in 2025.
The earnings report shows strong financial performance, with record high revenue growth, increased EBITDA, and positive net new bookings. The company raised its guidance, signaling confidence in future growth. The Q&A session highlighted positive sentiment from analysts, with no significant concerns raised. The strategic plan includes aggressive expansion and integration efforts, further boosting optimism. Overall, the combination of strong past performance, positive guidance, and strategic initiatives suggests a strong positive stock price reaction over the next two weeks.
The earnings call summary reveals strong financial performance with consistent revenue growth, successful product development, and strategic market expansion. The Q&A session highlights management's confidence in their competitive position, despite some unclear responses. The positive guidance and growth in international bookings, alongside effective marketing strategies, further reinforce a positive outlook. However, the lack of specific details in some areas and timing-related EBITDA guidance adjustments temper the overall sentiment, leading to a positive prediction for the stock price movement over the next two weeks.
The earnings call reveals strong financial performance with a 12% revenue increase and a 429% rise in adjusted EBITDA. Positive guidance with 14-15% revenue growth and a $150 million share repurchase plan further supports a positive outlook. Despite some operational challenges and economic concerns, investor sentiment is likely to remain favorable, predicting a stock price increase of 2% to 8%.
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