CoStar Group (CSGP -1.03%), a provider of real estate information and analytics, released its fourth quarter 2024 earnings on Feb. 18, 2025. The company reported revenue of $709 million, exceeding the analyst estimate of $701 million and reaching the upper limit of its own guidance range of $693 million to $703 million. Despite strong revenue performance, the company fell short in earnings per share, posting $0.15 against the expected $0.22. Overall, the quarter was a mixed outcome with solid revenue growth but unmet earnings expectations.
| Metric | Q4 2024 | Q4 Estimate | Q4 2023 | Y/Y Change |
|---|---|---|---|---|
| EPS (Diluted) | $0.15 | $0.22 | $0.24 | -37.5% |
| Revenue | $709M | $701M | $640M | +10.8% |
| Net Income | $60M | N/A | $96.4M | -37.8% |
| Adjusted EBITDA | $111.9M | N/A | $130.1M | -14.0% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in 2024-10-22 earnings report.
Business Overview
CoStar Group provides online real estate marketplaces, data, and analytics services. It stands out with a comprehensive proprietary database that includes property, leasing, sales, and tenant information, all supported by robust research and technology. A major focus of CoStar has been the expansion of its market presence in the residential real estate segment with standout platforms like Apartments.com and a rapidly growing Homes.com network. Critical success factors include continuously updating its database, strategic acquisitions to expand offerings, and investing in technological advancements.
Recently, CoStar has concentrated on scaling real estate platforms and enhancing its research and database capabilities. A key focus area is maintaining its brand and market position, supported by a comprehensive database.
Quarter in Review
During the quarter, CoStar's Q4 revenue of $709 million represented a 10.8% increase year-over-year, driven by remarkable performances in key segments. Apartments.com saw a 17% revenue increase, bringing its total to $1.07 billion for 2024.
On the other hand, the Homes.com network has emerged as the second-largest residential real estate marketplace in the U.S. with 110 million unique visitors monthly. Despite these strengths, CoStar faced challenges -- increased costs and macroeconomic pressures impacted net income, which fell 37.8% year-over-year to $60 million.
Adjusted EBITDA for the quarter reached $111.9 million, surpassing management's expectations and indicating better efficiency despite an overall 14% decline from the prior year.
Looking Ahead
Management's outlook projects 2025 revenue between $2.985 billion and $3.015 billion. For Q1 2025, revenue is expected to land between $711 million and $716 million, up approximately 9% year-over-year.
The adjusted EBITDA forecast for 2025 is set in the range of $375 million to $405 million. Moving forward, investors should watch for ongoing advancements in CoStar's strategic segments like the Homes.com expansion.
