CoStar Group, Inc. (CSGP) Q1 2021 Earnings Call Transcript

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CoStar Group, Inc. (CSGP -0.81%)
Q1 2021 Earnings Call
Apr 27, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q1 2021 CoStar Group Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mr. Bill Warmington, Vice President, Investor Relations. Please go ahead.

Bill Warmington -- Vice President, Investor Relations

Thank you, Gabriel. Good evening and thank you all for joining us to discuss the first quarter 2021 results of CoStar Group. Before I turn the call over to Andy Florance, CoStar's CEO and Founder and Scott Wheeler, our CFO, I would like to review our Safe Harbor statement.

Certain portions of the discussion today may contain forward-looking statements including the company's outlook and expectations for the second quarter and full year 2021. Forward-looking statements involve many risks, uncertainties, assumptions, estimates and other factors that can cause actual results to differ materially from such statements. Important factors that can cause actual results to differ include, but are not limited to those stated in CoStar's press release issued earlier today and in our filings with the SEC including our most recent Annual Report on Form 10-K under the heading Risk Factors. All forward-looking statements are based on information available to CoStar on the date of this call. CoStar assumes no obligation to update these statements, whether as a result of new information, future events or otherwise. Reconciliation to the most directly comparable GAAP measures of the non-GAAP financial measures discussed on this call, including EBITDA, adjusted EBITDA, non-GAAP net income and forward-looking non-GAAP guidance are shown in detail in our press release issued today, along with definitions for those terms. The press release is available on our website located at costargroup.com under Press Room. As a reminder, today's conference call is being webcast and the link is also available on our website under Investors. Please refer to today's press release on how to access the replay of this call.

And with that, I would like to turn the call over to our Founder and CEO, Andy Florance.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Thank you, Bill. Good evening, everyone, and thank you for joining us for CoStar Group's first quarter 2021 earnings call. We had a strong start to 2021 with both revenue and profit ahead of forecast. CoStar Suite had its best sales quarter since 2019 and is positioned for accelerating revenue growth into 2022 Apartments.com delivered its seventh sequential quarter of revenue growth above 20% year-over-year. Our Q1 marketing campaigns for LoopNet and Ten-X are hitting the ground running with both businesses showing good traction. In residential, Homesnap's first quarter pro forma revenue grew over 40% year-over-year as paid subscribers more than doubled and subscription revenue grew 68%. Two weeks ago, we announced our agreement to acquire Homes.com, the next incremental step in building out our differentiated residential strategy. Overall, we remain highly confident in our ability to continue to deliver double-digit organic growth revenue for many, many years to come.

Total revenue for the first quarter of 2021 was $458 million, which is a 17% year-over-year growth rate and $3 million ahead of the high end of our guidance range given in February. Quarterly sales bookings were a solid $52 million. Our profit performance was equally strong with adjusted EBITDA of $160 million, an increase of 29% year-over-year and $15 million above the high end of our February guidance. As a result, we are modestly rising -- raising our full-year 2021 revenue, adjusted EBITDA and adjusted EPS guidance, but you'll hear more about that interesting news from our CFO, Scott Wheeler. CoStar Suite had its best net new sales quarter since 2019 and we appear to be moving past the pandemic disruption. We believe the combination of renewals returning to the high pre-pandemic levels, new product introductions with CMBS, STR, international and lender, and the global CoStar upselling effort position CoStar Suite for accelerating revenue growth into 2022. Three CoStar Suite product enhancements both improve the utility of the product for all users and expand the universe of potential users. New users often sign up because of a specific feature or use case, but they often renew because of the power of the overall platform. By the end of this week, we will have loaded into CoStar information over $1 trillion of outstanding commercial loans made to over 100,000 properties.

Since we began including CMBS data in CoStar Suite, the supporting marketing campaign has reached the target audience with 45 million impressions and 1.3 million views of the CoStar CMBS product video. The CMBS data has helped open the doors to prospects and land multiple new accounts. The inclusion of STR's hotel data in CoStar Suite is following a similar pattern. Before STR, CoStar Suite had minimal data on hotels. Beginning on April 1, CoStar Suite subscribers received access to highly detailed data on 90,000 new and enhanced hotel properties. Since then, the STR data has been generating about 8,000 views per day. The sales force began marketing the STR data to existing clients on April 12 and successfully adding new CoStar suites. The next wave of sales activity will focus on targeting non-clients beginning later in Q2.

Major capital flows are regularly cross border and one of our goals at CoStar is to align information flow with capital flow. Our strategy with International is to start a milewide in terms of geographic coverage and several inches deep in terms of data and then continuously and consistently add depth over time. On April 22, all subscribers to our highest CoStar Suite subscription level with national coverage received access to information on 500,000 additional international properties in over 200 countries. Our plan is to steadily grow our international coverage at a measured pace over the years to come. We plan to launch CoStar Suite in Montreal in Francais this summer and CoStar Suite in Madrid in Espanol later in this year. In 2022, we are planning to establish deeper research coverage in additional European markets, including such as Berlin, Frankfurt, Munich, Paris, Rome and Milan. If travel access to overseas markets open sooner, we may accelerate the expansion pace incrementally.

In the second half of this year, we also plan to launch full global coverage of hospitality in CoStar Suite. Our goal is to track every significant commercial real estate property, listing, transaction, and participant possible around the world, while providing customers with the best local market experience or a cross-border global access based on their needs. Over the past 30 years, we've sold CoStar subscriptions on a modular basis with a wide range of geographical coverage options. Customers have subscribed to our property information module, a light version of our property module or a comparable sale module or a tenant module or a suite of all the modules. 10,000 firms subscribed to just the city they operate in with thousands subscribing to just the state and only a few thousands subscribing to full national coverage. We believe that as we continue to expand our geographic coverage and functionality, we can better serve our customers and create more value by offering one comprehensive global solution with all the modules included to all of our customers.

Over the course of the next 18 months, we are commencing a focused effort to upsell and migrate our clients to this global suite product. The standardization of options should reduce support costs, simplify the selling process, facilitate pricing discipline, eliminate technical debt. We also believe that providing more comprehensive value, we can also increase our renewal rates. Today, only 17% of our clients subscribed to our most comprehensive offering, so the upselling effort can create an opportunity for tens of millions of dollars in incremental subscription revenue. Decades ago, we went through a similar successful streamlining process as we moved from being a small regional company to being a national company. And as we move into a more global footprint, we're again streamlining to facilitate growth. This strategy is similar to Bloomberg's successful comprehensive non-module offering strategy. We believe that as we offer readily accessible and accurate information on more and more segments of real estate covering more and more geographies, our clients have consistently expanded their business into the incremental revenue opportunities we presented by giving them these broader information solutions.

Through the years, I have observed many brokers who once transacted one property type in one or two neighborhoods grow their business into covering multiple segments across multiple cities. Previously, brokers would have simply referred deals to other brokers, if it was not in their geography, but by upgrading their CoStar Suite subscription from a single market to national and international, they can now pursue these deals themselves. Once their business grows into these new broader opportunities, we've become an even more important partner in their success.

In early 2022, we plan to launch a powerful new CoStar product for the banking sector. CoStar Lender, an all-in-one suite for loan underwriting, surveillance, risk management and regulatory reporting tool. There are over 10,000 banks and credit unions in the US with CRE exposure and we currently do business with less than 10% of them. We believe Lender has the potential to generate over $300 million in incremental annual revenue. Lender will enable banks to link the collateral behind their loans to CoStar property and our independent market information. The product is being designed with input from US regulators and includes a built-in version of the CoStar Compass credit default model that enables banks to forecast expected loss and probability of default for easy current expected credit loss or CECL reporting. The combination of increasing renewal rates, a robust new product pipeline and a simplification and standardization of the product options all position CoStar Suite for really strong accelerating revenue growth into 2022.

When we acquired Apartments.com in 2014, it had less than $80 million in annual revenue and was growing at approximately 10% per year. In this first quarter of 2021, Apartments.com grew revenue 21% year-over-year, its seventh quarter in a row of growth at or above 20%. With the current run rate of over $660 million, I'm proud to say that Apartments.com is on track to overtake CoStar Suite as the largest component of our business in 2021. This strength is particularly impressive given two challenges created by the pandemic. The first is that the apartment owners and managers continue to operate under the budget occupancy and cash flow restrictions of an eviction moratorium currently scheduled to expire at the end of June. And the second is that we had to suspend the buildout of our promising middle-market sales team that was successfully selling into and penetrating the massive lower end of the rental market.

We have launched Apartments.com most -- Apartments.com's most comprehensive marketing plan ever with Jeff Goldblum returning as Brad Bellflower, our iconic spokesman and the inventor of the Apartminternet. Hopefully, many of you enjoyed our commercial Sunday night during the Oscars. Mr. Goldblum's character demonstrates the limitless lengths to which Apartments.com will go to ensure we have the most listings so that every renter can find their perfect new home. Sunday night's focus on friendly apartments is an awesome spot and a really quality piece of creative work. This year's campaign will feature seven new TV spots and over 20,000 commercials on top prime time shows, premieres, and finales, as well as major sporting events including premiere placement on the Olympics this summer. Let's hope that all goes well without a hitch.

We estimate the campaign will deliver over 10 billion media impressions, including twice the video on demand, millions of ads on streaming audio and podcast stations including Pandora, iHeartMedia and Amazon, and hundreds of millions of social media and digital ads on Facebook, TikTok, Vox and Cargill, as well as entering new outlets like Esports and Livestream on Twitch. I really believe that this is Jeff and our agency's best creative work yet and the distribution is most powerful we've ever deployed. I believe our Apartments.com marketing effort is operating at 214.2%. The Apartments.com network continues to make tremendous traffic gains as consumers view our advertising and experience our site. During the first quarter 2021, the Apartments.com network according to Comscore had 25 million average monthly unique visitors to our websites, up 4 million uniques or 21% from the same period last year. During the same period, RentPath had 9.8 million average monthly uniques to its -- for its network of sites, up only 400,000 uniques from the first quarter of last year. In other words, we have over 2.5 times RentPath's traffic and then grew our uniques by 10 times the number they grew their uniques. They continue to fall further and further behind. Zillow interestingly actually lost over 2 million average monthly uniques visitors quarter-over-quarter. We are now ahead of the Zillow by over 5 million average monthly uniques for the quarter.

In the month of March in the back of our new marketing campaign, the Apartments.com network had 26 million visitors, up 40% year-over-year and set an all-time record for visits at a month -- in a month at 78 million visits, up 45% year-over-year. As we head into the part peak -- as we head into the peak apartment leasing season, there are more people looking online to rent an apartment than ever before and our share of that traffic is higher than ever before. We are continuing to see good progress in our penetration of the under 100-unit multifamily properties, both through our small mid-market sales team based in Richmond, Virginia and our self-service e-commerce offerings to our independent owners. We defined independent owners as folks who own one or more one to five-unit properties. The revenue growth rate for buildings with five to 100 units has been accelerating from the low 20% range in the first quarter 2020 to the mid to upper 30% range in the first quarter of this year.

We are excited that a portion of our 2021 marketing campaign will specifically target the massive, but under-penetrated independent owners marketplace for the first time. Our current offering of rental tools, including applications screening, leases, and payments is proving to be extremely valuable to these people. In the first quarter, over 80,000 applications were submitted on Apartments.com with credit checks resulting in over 27,000 new leases, a 14,000% increase over the same period last year. Apartments.com processed $891 million in rental payments in the first quarter, up 27% from the first quarter last year. As our marketing for these features accelerates, we look forward to expanded sales opportunities. With the now widespread availability of safe and effective vaccines, we're better positioned to restart the hiring and effective face-to-face training of new mid-market sales team members. The normalization of business use of Zoom creates much better opportunities to couple the benefits of a centralized sales force with the effectiveness of virtual face-to-face client presentations. We are still only single-digit penetrated into the vast lower end of this rental marketplace, so we are -- we believe very strongly that we have decades of high growth runway ahead here.

In the same way that Apartments.com revenue over to CoStar Suite in seven years, I believe Homes.com revenue could overtake Apartments.com revenue in the next seven years. And that's not because we're expecting any slowdown in Apartments.com growth. Quite the contrary. It's because the opportunity in residential is so large our strategy is so differentiated and our assets have so much potential. We believe there is a huge gap today between how the leading portals currently leverage the digital real estate marketplace opportunity and an optimal way to leverage digital marketplaces to more effectively sell homes online. We think the current online players are overly focused on capturing agents fees, but in contrast, we believe there is a bigger and lower risk opportunity to facilitate selling homes faster and with greater certainty by digitally empowering the established and entrenched channels.

We recognize and account for the fact that our initial market position is in fact modest today. Two weeks ago, we announced our agreement to acquire Homes.com from Dominion Enterprises. Back in 2018, Dominion sold us ForRent, thank you, Rusty. Members the ForRent team became key members of our Apartments.com team that help build that business. Homes.com will similarly bring with it a talented team of managers and an excellent intuitive URL with an existing base of residential traffic. We believe that our plans to combine Homes.com, Houses.com and the agent marketing and workflow tools of Homesnap and even CoStar will create the foundation of a differentiated solution to offer a much better alternative to the old first generation real estate web portal models. Not sure where to put in the call, but somewhere you have to admire, at least appreciate the branding benefit of how Homes.com meets or fits with Apartments.com. Apartments.com-Homes.com, Homes.com-Apartments.com, there is some serious marketing then there at Hill's.

I'm very pleased to report that LoopNet is crossing the $200 million revenue run rate milestone right now and continues to enjoy robust traffic growth with 34% quarter-over-quarter growth in unique visitors to the site. The site reached their record 10 million unique monthly visitors in March. LoopNet sales continue to show strength in an adverse commercial real estate market in the first quarter with revenue growing 14% over Q1 2020. The year-over-year growth number was negatively impacted by the depressed subscription sales for LoopNet last year during the chaos of the first couple of months of the pandemic. However, during the first quarter of 2021, we saw significant growth in our higher-tier advertising solutions with Diamond, Platinum and Gold ads growing 50% over the same period a year ago. Demand for prominent placement with these higher-tier ads on LoopNet is strong as average listing prices for these ads grew to $984 a month averaging Q1 2021, up from just $710 a month Q1 2020. The year-over-year revenue growth for our high-volume, lower-tier Silver ads was only 6%, which is how we like to manage volume ads to avoid saturation and internal competition with CoStar.

We ended the quarter on a strong note in the month of March with our third highest monthly net bookings result. Pandemic restrictions this past year have made it difficult to effectively onboard and train additional sales resources to sell LoopNet. If you have any children learning from home during the pandemic, you know what I mean and you can appreciate how ineffective Zoom-based school can be. Fortunately, with the ability to return to the office and travel, we plan to start adding sales resources later this quarter to accelerate LoopNet growth further. Even before that, we were still able to achieve an outstanding sales result in March by cross-commissioning and incentivizing our large experienced general commercial real estate sales force to sell LoopNet. Mark and Drew did a good job making that happen. We are seeing more and more of these sales professionals put up impressive sales results in both LoopNet and CoStar simultaneously.

We continue to make significant enhancements to LoopNet's e-commerce sales channel. The e-commerce LoopNet sales contribution is growing and increased 24% Q1 '21 over Q1 '20. With the pandemic's negative impact on commercial office leasing, the availability rate for office space has jumped 400 basis points over the pre-pandemic availability rate. The availability rate of the percentage of office space being actively marketed for lease is the highest level we've ever recorded. We believe that makes LoopNet's reach to millions of tenants searching for commercial real estate more valuable than ever to owners who need to find tenants to fill their vacancies. It couldn't be more important. As such, we're maintaining our plans for increased investments in marketing LoopNet to owners, brokers, investors and tenants.

The 'Are you in the loop?' campaign we ran from February through March of this year targeted brokers and owners in an effort to elevate the LoopNet brand to top of their mind. That campaign generated 58 million impressions of high impact creative across a variety of direct media partners, social media channels, as well as programmatic video and display partners. The initial campaign served as a teaser to our broader $20 million campaign launching this may called 'Space for dreams', which targets tenants and reinforces LoopNet as the most popular place to find the space.

We're working with this on RPA, the agency we used to produce the excellent Apartments.com work to produce this upcoming campaign. They've have tapped Niall O'Brien as director, an accomplished director and fine arts photographer who captures the pride of ownership inherent within buildings and showcases the breadth of buildings on the LoopNet marketplace. Niall has the ability to capture buildings in their best moment and bring the design intent of the architects to life. He creates an excitement around the properties and the opportunity they represent. The intention of this campaign running through the rest of the year across broad-based media is to continue to elevate the LoopNet brand and increase brand awareness. While the campaign targets tenants, we're really actually targeting owners and brokers as a pass-through audience. We believe the striking high-end architectural imagery will resonate with the owners of ultra high-value properties and position LoopNet as a brand appropriate channel for a high-end, high-dollar property advertising. All this, so I can tell Scott that our ASP per ad is going up.

We -- we have put in place many foundational elements for LoopNet to succeed this year and in the years to come. We can clearly see the enormous scale of this opportunity. Though we're crossing a $200 million revenue run rate milestone, our penetration rate is still only a low single-digit number. There are tens of thousands of very high-value opportunities out there for us and hundreds of thousands of valuable opportunities overall, and we're focused on winning those opportunities in growing this business.

Ten-X delivered another solid quarter and continues to benefit from the CoStar and LoopNet driving potential buyers to Ten-X. Ten-X unique monthly visitors rose 45% quarter-over-quarter. On a year-over-year basis, overall account creations increased 61% with CoStar, LoopNet source creations up over 1,000% from 330 to 3,700. Average registered bidders per property rose from 5 to 13, a 160% increase, and average live bidders per property increased from 2.5 to 4, a 68% increase. The growth in the number of bidders is key because when there are three or more bidders in the auction, there is an 85% probability of transaction -- transacting and that's an excellent number that draws properties to our network. As a result, in March, the trade rate, the percentage of properties that came to auction and sold hit an all-time high of 81%. These strong metrics are excellent proof points of the network effect from combining Ten-X with the CoStar platforms.

During the first quarter of this year, we grew our Ten-X sales teams by 39%, launched a best-in-class six-week sales training program and lead a lead generating training program, and capitalizing on this growing momentum by launching a new national marketing campaign called Ten-X it, starring comedian Keegan-Michael Key, great -- great actor. We believe this campaign will further establish Ten-X as a leading brand for online commercial real estate transactions, drive market awareness that there's no faster or more certain way to exchange commercial real estate and that Ten-X as a part of the CoStar network will become an exponentially better way for buyers and sellers and brokers to exchange commercial real estate. As the campaign says, 'Why just buy it or sell it, when you can Ten-X it.'

The successful vaccine rollout across the US combined with fiscal stimulus, high household savings rates, relaxed COVID restrictions and warmer weather have boosted consumer sentiment and spending, helping the labor markets retail sales, restaurant, service industries and travel. The office sector struggled in Q1 setting a record for the largest single quarter of negative net absorption. Overall leasing activity remains depressed. Many companies are still evaluating their workplace strategies, but in-person tours are restarting, I'm doing one first thing in the morning, and vaccinated workers are gradually returning to in-person environments. For multifamily, the defining trend of 2020 was weak demand in the densely populated urban centers and strength out in the suburbs. While the first quarter couldn't be described as a reversal of that trend, demand has recovered to normal levels in urban centers while staying strong in the suburbs.

Record search activity on Apartments.com reflects continued strong multifamily side demand. Fiscal stimulus and improving health conditions are helping the retail sector, especially the service sector tenants that have struggled with lower foot traffic over the past year. Hotel occupancies -- I'm sorry, hotel occupancies continue to improve by leisure travel and are hurt by continued weak business travel. The industrial sector continues to outperform and set new quarterly leasing volume records, driven by the double-digit acceleration of e-commerce. Despite the wave of new construction in the industrial sector, vacancies there ticked down in Q1 and remain near all-time lows. The capital markets have rebounded on the back of strong portfolio of trading activity and a return of large national buyers. With record levels of dry powder, investors are on the lookout for distressed opportunities, so far concentrated on hotels with expectation for distressed resell -- retail assets to follow. We just need to make sure they Ten-X those opportunities instead of just buying them.

Last March, as you know, we quickly evacuated all of our offices and our staff moved to safely work from home. Our team did an outstanding job and though it was difficult, they all made it work for our clients, our shareholders and one another. With safe and effective vaccines now widely available and with the help of a number of CoStar Group organized vaccine clinics on site, more and more of our staff are now vaccinated, I believe is the majority. Employees are now safely returning to our offices by the hundreds. While it's early days, it feels like we're moving toward a more normal and productive 3D, real, face-to-face collaborative workplace we used to enjoy. I believe that companies with teams that are able to work together face to face will always outcompete remote, disbursed teams. Our offices feel like a return to a college campus after a long, long summer break. I see thrilled colleagues smiling behind their masks when they run into close colleagues they've not seen in ages. It's really quite nice to see.

At this point, I'm going to hand the call over to my face-to-face, real, 3D, present, sitting right here next to me, at-work colleague, our CFO, Scott Wheeler.

Scott Wheeler -- Chief Financial Officer

Thank you, Andy. I'll be using my 3D voice today, so hopefully you'll notice the difference all of you who are listening.

Andy Florance -- Founder, Director, President & Chief Executive Officer

2D is like family for them.

Scott Wheeler -- Chief Financial Officer

Last year, I used my 2D voice. But yes, I think that last part is the best news of all of everything you talked about, going back to our offices, rolling out vaccines to protect our teams and their families and getting to welcome our friends and our team members back to our offices every day. It really is super fun. And we had a great first quarter financially, I'll call it, hitting for the cycle with double-digit growth in sales bookings, revenue, adjusted EBITDA and non-GAAP EPS. We included Homesnap, currently in their rookie season with CoStar in our financial results for the first time this quarter and they were great. And we also signed up a strategically important prospect in the online residential spaces, Homes.com.

So onto the results. Revenue in the first quarter 2021 increased 17% over the first quarter of 2020, which is above the high end of our guidance range. The organic revenue growth in the first quarter, which excludes Homesnap and Ten-X was a strong 11% year-over-year as we come around to one year after the start of the pandemic. Going forward, we expect organic revenue growth to improve to approximately 12% to 13% for the second quarter and for the remainder of the year. CoStar Suite revenue grew 4% in the first quarter of 2021 versus first quarter 2020 at the high end of our expectations. As we begin to lap the low sales months that began in March 2020 as a result of the pandemic, we expect to see CoStar Suite revenue growth improve sequentially, CoStar Suite sales in the first quarter of 2021 along with contract renewal rates return to pre-pandemic levels. So this is certainly very encouraging and is the much faster recovery than what occurred in the last recession for CoStar Suite. We expect CoStar Suite revenue growth in the 5% to 6% range for the second quarter of 2021. Our outlook for the full year has improved to approximately 6% with 7% to 8% growth rates expected in the second half of the year for CoStar Suite.

Revenue in information Services grew 7% year-over-year in the first quarter of 2021 to $35 million. Also Real Estate Manager and STR turned in strong double-digit subscription revenue growth in the first quarter with Real Estate Manager subscription revenue up 19% and STR subscription revenue up 15% compared to the first quarter of 2020. The strong subscription revenue growth was moderated somewhat by that drop in transaction revenue, which is a one-time revenue in STR, that drop which occurred at the first part of the pandemic in the first quarter of last year. Overall, we expect revenue growth from information services to improve sequentially to a rate of 12% to 14% in the second quarter of 2021 and we continue to expect growth of 10% to 12% for the full year.

Multifamily revenue growth for the first quarter remained strong at 21% compared to the first quarter of 2020, which is at the high end of our expectations. The number of properties advertising with us was up 10% in the first quarter, with growth in the average rate per property also up around 10% as properties continue to upgrade their advertising packages and increase our exposure. And mid-market revenue growth rate was up over 35% in the first quarter, as Andy mentioned, with growth balanced pretty evenly between the growth in number of paying properties and growth in the revenue per property. We expect revenue from multifamily to grow at the rate of approximately 18% to 19% in the second quarter of 2021 compared to the second quarter of 2020.

Commercial property and land revenue grew 48% year-over-year in the first quarter in line with our expectation. This includes the impact of the Ten-X and Homesnap acquisitions. Organic growth was 11% year-over-year in the first quarter. We expect to report a commercial property and land revenue growth rate to be approximately 55% to 60% for the second quarter of 2021. Organically, we expect growth of approximately 18% to 20% for the second quarter with improved growth across all of the marketplaces in this sector as we lap the initial pandemic impact from last year.

Within commercial property and land, LoopNet revenue showed solid growth in the first quarter, increasing 14% compared to the first quarter of 2020, just a touch below our expected range of 15% to 16%, as it's been difficult to effectively onboard and train additional sales resources to sell LoopNet during the pandemic, as Andy referenced. We expect LoopNet revenue growth to improve sequentially and grow approximately 19% to 20% in the second quarter. Our gross margin came in at 81% in the first quarter of 2021 in line with our expectations and we expect gross margins to continue at that level in the second quarter with gradual improvement throughout the end of the year. Our profitability was strong in the first quarter with net income, adjusted EBITDA, and non-GAAP EPS results all ahead of the guidance we issued in February.

Net income was $74 million in the first quarter with an effective tax rate of 20% for this quarter. Now, the first quarter effective tax rate was higher this year compared to the first quarter of last year and that's due to fluctuations in the amount and the timing of share-based payment deductions. Those wacky share-based payment deductions, you just never know what they're going to do. First quarter adjusted EBITDA was $160 million, up 29% from the first quarter of last year and came in approximately $15 million above the high end of our guidance range. The improved adjusted EBITDA was primarily the result of higher revenue, lower personnel expenses, and timing variances in the number of operating expense categories across the P&L. The operating expense favorability is primarily timing and we expect to incur some of those expenses later in the year. The resulting adjusted EBITDA margin of 35% in the first quarter was 320 basis points above the first quarter of last year.

Now, we'll talk about some of the performance metrics for the quarter. At the end of first quarter, our sales force totaled approximately 835 people, which is lower than the sales force number we reported at the end of 2020 by approximately 65. Part of this reduction is actually a modification of how we count direct sales. So a little bit of a restatement, if you would. We moved approximately 25 positions out of the sales account in the first quarter, positions that are focused on account management or managerial responsibilities that don't really directly impact sales. So the remaining decline in sales headcount sequentially around 40 people is from first quarter attrition in the CoStar and LoopNet sales teams primarily, which from a timing perspective, was not replaced in the first quarter, given the difficulty of hiring and training new sales resources, while we work remotely. We expect to not only replace but increase the size of both the CoStar and LoopNet sales teams this year.

The renewal rate on annual contracts for the first quarter 2021 was 90%, unchanged from the fourth quarter of 2020. And the renewal rate for the quarter for customers who've been subscribers for five years or longer was 96%, a slight improvement from the renewal rate of 95% in the fourth quarter of 2020. Subscription revenue on annual contracts accounts for 78% of our revenue in the first quarter, which was in line with the last quarter.

Before I talk about the second quarter and our revised outlook, let me state a few comments about the pending Homes.com acquisition, which we have not included in our outlook for 2021. Today, Homes.com generates approximately $10 million in revenue per quarter and it's not profitable. Subject to the deal closing, which we expect to happen by the end of the second quarter of this year, we intend to evaluate existing product revenues and discontinue certain services that are inconsistent with our strategy. As we wind down these services and record typical acquisition accounting adjustments, we expect to record approximately $5 million to $10 million in revenue for Homes.com in the second half of this year. We're too early in the process to providing specific guidance on the profit impact to our business, but at a high level, I would expect the transaction to be just modestly dilutive to earnings in the second half of the year as we work through integration.

I'll now talk through our outlook for the full year and the second quarter of 2021. We expect full-year revenue in the range of $1.930 billion to $1.945 billion for 2021, which implies an annual growth rate of 17% at the midpoint for the year. On an organic basis, excluding the impact of the Homesnap and Ten-X acquisitions, we expect growth of approximately 12% to 13% for the full year 2021. For the second quarter, we expect revenue in the range of $465 million to $470 million representing revenue growth of 18% year-over-year at the midpoint of the range. For the full-year 2021, we are raising our outlook for adjusted EBITDA to the range of $645 million to $655 million, which implies an adjusted EBITDA margin of 33.5% at the midpoint of the range. We expect adjusted EBITDA of approximately $130 million to $135 million in the second quarter of 2021 for an adjusted EBITDA margin of between 28% and 29%. Our marketing campaigns for Apartments.com, LoopNet and Ten-X all accelerate in the second quarter which results in the lower sequential margins, which isn't the case in most years. Our marketing spend in the third quarter is expected to remain at or near second quarter levels before dropping back down into the fourth quarter.

So overall, it was a great start to the year. And even better, I'm fully vaccinated. Andy is fully vaccinated. We're very excited to see 3D people here in our office. Now, Bill here, he's still in 2D.

Bill Warmington -- Vice President, Investor Relations

Like Stanley.

Scott Wheeler -- Chief Financial Officer

We're going to call him flat Billy. All right. Billy, back to you. We're going to let you open it up for questions from the flat analysts on the call.

Bill Warmington -- Vice President, Investor Relations

Well, thank you very much, Scott. So for everyone out there, one question per participant, please. So make it an exceptionally insightful one, but not a multipart one. Gabriel, would you please assemble the questioners for the queue.

Questions and Answers:

Operator

Absolutely. [Operator Instructions] Your first question will come from Andrew Jeffrey of Truist Securities. Please go ahead.

Andrew Jeffrey -- Truist Securities -- Analyst

Thank you very much. I guess, I'm going to have to accepting 2D for now.

Scott Wheeler -- Chief Financial Officer

Thanks, Andrew.

Andrew Jeffrey -- Truist Securities -- Analyst

Andy, residential obviously has grabbed a lot of attention, right, this last quarter or two what was CoreLogic. Could you elaborate, I guess, a little bit beyond the relatively small deals you've done, albeit some important, in terms of how you intend to build that out? Do you need to buy data? Do you need to buy a database? You're going to build the database, just trying to think about how you get from point A to point B in that big TAM?

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes. So we already have a -- Homesnap already gives us a very solid seat at the table. It connects us with hundreds of thousands of important players, also leaders in the industry who can set up the access we need. We already subscribe to a wide array of residential information sources, but we think we can work with Homesnap and Homes and put together a very interesting strategy. And we think we'll get a lot of support from market participants for that strategy. So the first generation models operate at scale for an extended period of time, and they never really ever produced any meaningful profits. We think there is the ability to actually build much more profitable lower-risk models by adopting a different business model, not trying to take the agent fees, but actually facilitating the power of the Internet and the reach of the Internet to find buyers with greater certainty and greater speed. So we're going to develop that plan a bit over the months to come. We're beginning to do retreats around that and build out that business plan and we'll be rolling that out later in the year.

I'm -- there is not a specific additional company we need to buy today to execute that strategy. I'm sure that things will come up that will help and support our strategy. We are -- I think we are -- we're comfortable with what we're doing without any involvement in the -- for the CoreLogic acquisition. And I don't want you to worry that if that deal were on the table that gave the -- CoreLogic shareholders will be getting $101, we're not reinstituting that. There's nothing happening there. We're happy with the strategy we have with a very affordable Homes.com. So we didn't overpay for Rusty. That's a joke. That's just to the guy, the seller negotiating at an all-time -- it's tough to negotiate with.

Operator

Our next question will come from Sterling Auty of JPMorgan. Please go ahead.

Sterling Auty -- J.P. Morgan -- Analyst

Yes, thanks. Hi, guys.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Hi. How are you doing?

Sterling Auty -- J.P. Morgan -- Analyst

Andy, you outlined -- I'm well.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Good.

Sterling Auty -- J.P. Morgan -- Analyst

You outlined a lot of growth initiatives in your prepared remarks and I guess what I need to better understand is or help me better understand how do each of those ramp in the timing? Because it seems like there's a lot of opportunity where I think investors are going to wonder are you going to accelerate that organic growth into [Indecipherable] what timeframe?

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes. So, a lot of the stuff is somewhat dependent. I know you have kids. Some are probably are -- been home schooling for a while, not as effective as actual in-person schooling, especially not when you're starting a new school. It's been hard to build sales forces effectively during this whole thing. And as we start to get back to a little bit more normal, I'm very much looking forward to being able to effectively build some of these sales forces. So the opportunity to accelerate growth in Apartments has been there. We've got the marketing engine that's just cranking. We have the opportunity at the middle and lower end that's really proving effective and just it needs some more sales resources behind it. The LoopNet product is proving effective and it needs -- just needs -- and it can accelerate growth with more resources. It's already accelerating growth, but it can accelerate more with some more sales resources. I'm very excited about -- this sort of centralized, advanced, virtual selling opportunities, technology -- what we can do with technology, so, some of that's going to be pretty cool. The CMBS launch is out there. The global launch is going to start hitting next quarter, meaningfully next quarter. The Apartment launch is out there, I mean, the hospitality launch is out there. Ten-X is also -- we nailed the demand side. We're seeing what we want to see there. We're getting those 13 registered bidders, up from 5 or -- 4 or 5 whatever it was, we're getting the flow there. And now, we need to just bring more supply; that's where the more revenue comes from.

We've begun to train the researchers on generating those leads and we've got an excellent training program in place and we're going to build out the sales force there, which should bring acceleration to that one. So it's all sort of coming together here as we come to the middle of the year. And I love Pfizer, I love Moderna, I love J&J, just getting back to actually growing the teams to support this effort. So Scott, is there anything that's like I'm missing in terms of when these -- I mean I think that -- the one thing that is not this year is CoStar Lender, an excellent product there. Excellent product potential, great product team there. John Vecchione is running that group. That'll be a great product. In the script, it said fourth quarter of 2021 -- I bumped it to first quarter of 2022. It's a complicated product, but it's pretty cool. I think it will be very compelling. So that one is more of a 2022.

Operator

Our next question will come from George Tong with Goldman Sachs. Please go ahead.

George Tong -- Goldman Sachs -- Analyst

Hi, thanks. Good afternoon.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Hi, George.

George Tong -- Goldman Sachs -- Analyst

CoStar's had its best -- hi, suite had its sales quarter since 2019 that was helped by new product enhancements. Can you talk about what the sales strength reflects in terms of whether it's new institutional customers that are being brought on versus penetration among brokers versus increases in pricing that's coming back?

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes, so there is -- I don't believe there's any material impact of pricing increases. There are no pricing increases occurring right now. Going forward, later into the year, I think there will be not price increases, but there will be average purchasing amount increases, so people, I believe, will step up from one module to three modules as they go the global suite, so that's effectively more revenue per customer. But so far what it is, is higher renewal rates. People aren't -- the cancellation rate coming down has a big impact as people feel more secure about their businesses and they see light at the end of the tunnel. And then, the -- and then it is I think more seats from some existing institutional owner players. The CMBS data is now really valuable in our product. The STR data is extremely popular with anybody who is doing work in hospitality. Our rationale for acquiring STR was, we could see it was a great product valued by the actual operators of hospitality, investors in hospitality, but we could see that STR did not have a distribution channel into those people appraising and brokering hotel sales and developing hotels. And we could bring that to -- we could bring their product to market quickly and that's been a big benefit to us, bringing STR data in there. Would you want to add anything to that?

Scott Wheeler -- Chief Financial Officer

Yes, I think, George, when you look at the stats on CoStar usage right now as far as subscriber numbers, this is the first quarter we went over 160,000 subscribers. So certainly after the dip in the second quarter last year, it's been coming back well. And as Andy said, clients are adding seats and adding users, particularly to take advantage of some of the new information. When you look at the number of sites that are using CoStar, that's also at a high level now that we hadn't had before, over 38,000 -- 171 sites. It's a right up at the top of where we've been. And then when you look at the number of new subscribing firms coming on, this quarter was as big as it was right after we did Xceligent.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Which is amazing.

Scott Wheeler -- Chief Financial Officer

File their bankruptcy, it's like the second part of 2018 after that first peak, we had some pretty high levels, but now we're adding again at those levels at average contract sizes are probably 30% higher than what they were back then. So you just kind of look at whether it's sites, whether it's subscribers or whether it's users, all of them are rising across these different customer sets.

Operator

Our next question will come from Pete Christiansen of Citi. Please go ahead.

Pete Christiansen -- Citi -- Analyst

Good evening, guys. Thanks for the question, and really nice trends here. Andy, I really appreciated the Homes.com Apartments.com comparison. I thought that was pretty interesting. But certainly looking back to that era, the Apartments.com required a ton of marketing investment, I think it was $150 million in its first year. Should we expect that type of aggressiveness in scaling Homes.com at some point?

Andy Florance -- Founder, Director, President & Chief Executive Officer

I -- we are not at a place today where we have any sort of specific plan of that nature. There's nothing on Scott Wheeler's desk that analyzes those sorts of investments. We obviously are exploring the broad opportunity. I'll tell you that looking at the residential opportunity for me feels an awful lot like rinse and repeat. We've got a bunch of these information back-ends that support a front-end marketplace in real estate. And we've been doing this for a number of years. And as LoopNet crosses over 200 million, as Apartments becomes the biggest segment of our business, it is sort of like what we've been doing for a while here. And as you do that, you do make investments in marketing. So right now, if you watch squat bikes, you might see Ten-X ads. Shortly thereafter, you see a LoopNet ad. That evening switchover to Peacock, you might see Apartments.com. I think that's part of our formula and you do usually invest in the marketing -- you do invest in the marketing ahead of revenue. So, as we go after an opportunity, which I believe could generate over time billions of dollars of incremental additional EBITDA. It does take our shareholders' capital to open up that wonderful opportunity. So, it's possible we might use the weapons our shareholders have given us some day. But it's a multi-year effort and the first component is generally software, which doesn't really show up as anything terribly visible to the analysts or shareholders.

Operator

Our next question will come from David Chu of Bank of America. Please go ahead.

David Chu -- Bank of America -- Analyst

Hi. Thanks, guys. So, you mentioned that signature ads were up about 50% in the quarter. I think that was about similar to 2020. So do you expect the new marketing campaign and the step-up in the sales force to accelerate growth this year? And I'm just wondering besides the marketing campaign and the sales force additions, what are the other key levers to accelerate this?

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes. So, we do expect that LoopNet year-over-year sales number to start moving around the 20% zone again pretty quickly. And if we're more successful with adding salespeople that know how to do it and if the trend with the existing large CRE sales force, they keep on selling both CoStar and LoopNet, yes, we'll get some good acceleration. I think that we are getting real buying from the high-end folks. They used to view LoopNet as being something that were people predominantly marketed lower end properties, suburban properties, industrial properties for sale. These marketing campaigns really don't leave those smaller properties behind, but really sort of focus on branding super high-end billion-dollar properties. And I think that will open up a lot of opportunities at the high end, which is really where we're trying to go. Because if I take our high target prospects, 50-some cows and high-target prospects who are multi-thousand a month opportunities, we're only 3.8% penetrated into that segment. And moving that number up to 20% on some sales force growth and some -- and marketing that talks to that audience I think would have a huge impact on revenue acceleration. So we have a winner that's just sort of tuning the different components.

Operator

Our next question will come from Mayank Tandon of Needham & Co. Please go ahead.

Mayank Tandon -- Needham & Company -- Analyst

[Indecipherable] margins, given the investment priorities and the growth initiatives, what are some of the levers you have to increase margins and get that 40% targeted goal by 2023, as you're thinking change in terms of that target and how you're going to get there, given the change in the cost structure in the midst of the pandemic?

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes. So as we go forward to 2023, we've got organic growth coming back up primarily with CoStar hitting it's low quarter, first quarter, and then rising for the rest of the year. So organic revenue growth would increase, will continue to add revenue in modest places as we have with acquisitions. And then our cost profile right now is pretty well a decision -- an investment decision profile every year. So we can still grow our costs 8%, 10% or a little more percent over the next couple of years. And that revenue growth will just bring that margin up. So it's all about the fixed cost leverage, maintaining that organic and increasing that organic revenue growth, which is -- the investments we put in place over the last year and then in this year that are creating these opportunities. So we've got the right fuel in there to get that revenue growth up. And then, it's a matter of monitoring that cost growth again between the 8% to 12% range over the next couple of years and we'll hit that 40%. So -- which is nice, we've been able to increase this year big ad campaigns for Ten-X and LoopNet.

Last year, we did it for Apartments, but still even with big increases in marketing every year, we can still grow our margins. So that scale of business and the leverage profile of the business now is really helping us do things that in the current and future environment, years ago would be scary and take a lot of our profit. Now they don't impact it nearly as much and it gives us a lot of firepower in all these sectors we're in.

Operator

Your next question will come from Ryan Tomasello of KBW. Please go ahead.

Ryan Tomasello -- KBW -- Analyst

Thanks for taking my questions. Just in terms of M&A, it's hard to ignore the cash balance in the balance sheet. So you've said publicly in the -- recently that you intend to focus on acquisitions in areas which CoStar does not directly compete meaningfully today. And it's clear that residential is going to be a part of that playbook, but maybe you can elaborate on other areas of the business that you see as potentially being synergistic with the broader CoStar portfolio? For example, I believe in the past you've referenced areas like workflow and facilities management software as examples.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Sure. So, I guess we are three deals into this year, roughly? Yes, so we've done three. And I anticipate we'll continue to like we are constantly evaluating deals that are out there and they do come from a range of different sectors. Facilities, sure, that's a zone we look at. We're looking at a range of different things in residential. Most of them are domestic. Emporis was a small exception to that. And these things are generally sort of tough to discuss specifics before they happen. And lately, they've been relatively smaller deals. So, there are things out there that we're currently -- I think we're probably talking about 20 deals at any given moment. There are 20 things on the radar screen at any given moment. But just the last couple we've done have been small. There was one you may have noticed that was potentially massive, but we're resetting and focusing a lot of opportunities. So there is zero chance that CoStar won't continue what it's done consistently for 30 years. It is just -- and there'll be similar we've done before, which is closely related to what we're already doing, but generally strategically additive to some broader theme we're trying to pursue. And as you go into residential, that's a pretty big theme with a lot of opportunities. I have to tell you that the flow of deals is absurd at this point. I think I probably have three in my LinkedIn a day. So, but -- more of the same, more measured, continued flow there. Do you want to add anything to that, not really?

Scott Wheeler -- Chief Financial Officer

No. As you say, the residential pipeline is throwing everything at us right now.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes.

Scott Wheeler -- Chief Financial Officer

We still see things coming in the apartments sector quite frequently

Andy Florance -- Founder, Director, President & Chief Executive Officer

And commercial real estate.

Scott Wheeler -- Chief Financial Officer

And commercial real estate and small information play. There will still be others internationally that are coming at us. So all the things we've talked about before are still very active, but residential has just added another dimension and higher volumes walked us just through.

Operator

And our next question will come from Mario Cortellacci of Jefferies. Please go ahead.

Mario Cortellacci -- Jefferies -- Analyst

Hi, guys. Thanks for the time.

Andy Florance -- Founder, Director, President & Chief Executive Officer

No worries.

Mario Cortellacci -- Jefferies -- Analyst

I wanted to talk about -- right, I want to talk about the new salespeople you're adding in. Maybe you can just talk about the timing to productivity for these new salespeople. You're building out the middle-market team, then LoopNet team, Ten-X. I mean we've heard other companies within the information services space talk about say a three-year timeline and so they hit their max productivity. Do you guys have an idea of what that looks like for these new hires? And then also because of what we're seeing in the labor market with the government support and stimulus, there has been commentary from a lot of other companies saying that it's been hard to hire, basically competing against the government. Is that a concern of yours at all and does that create any type of wage inflation or an increased labor expense or comp expense for you?

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes, well, your observation on competition with the government for employees is accurate. That tends to be a little bit more on the restaurant industry and some of the service industries where, yes, I hear about folks who can't hire, because they earn more working for -- not working for the government. But whatever. There's definitely -- so in terms of hiring, I am definitely focused on particular -- I'm focused on the centralized sales effort. We have a great field sales team with Apartments. We have a great field sales team with CoStar, the CRE team there. For Ten-X effort and for the mid-market Apartments effort and for the LoopNet effort, I am looking at a centralized effort. I have been able to recruit some very experienced trainers and leaders to essential -- to Richmond where we think that we have the ability to compete aggressively for talent there. And our training -- we're investing a little bit more in our training programs than ever before. So we are looking at 6 and 12-week training programs, but with a -- expecting a much higher success rate of deployment.

On LoopNet, we believe that people can get on the boards and start selling within three months. With Ten-X, it might be six months. With Apartments, we think it's three months. And then in terms of peak efficiency, they probably start to get up to -- I think that LoopNet Apartments probably we would expect them to climb up at about 18 months to sort of full production level and Ten-X might be 24 months. But if we can get them on the boards in the first three to six months, we have a good idea of what that ROI looks like for those salespeople and it's strong. And the situation we have here is this is a -- we have the prospects in our database. We know what their economic need for marketing is. There are many, many, many of them, there are more of them than we can reach with the existing team we have. So we have the benefit of and there's not a lot of competition for what we're selling. So our offering is highly differentiated. Our intelligence on who to sell to is excellent. And so, yes, I think that answers that. But I would -- I do look forward to the time when there is less competition from the government to the sales force.

Mario Cortellacci -- Jefferies -- Analyst

Okay. Thank you.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes.

Operator

Your next question will come from Stephen Sheldon at William Blair. Please go ahead.

Stephen Sheldon -- William Blair -- Analyst

Hi. Thanks. On the CoStar Suite, the global platform, I guess what percentage of your CoStar Suite subscriber base do you think could be interested in this? And what could the revenue uplift potentially look like over the next few years if you're able to drive meaningful adoption?

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes, so there is two things happening there. There's three things happening there. One is for the first time really focusing on module upsells. So someone buying just information in the property is getting the tenant that comps and more functionality overall for the city they're already operating in. That is thousands and thousands of upsell opportunities. The next one is someone operating, getting the data, the most common thing is someone just getting the data for the city they operate in. At this point, the way commercial real estate works that's kind of silly, because 30%, 40% of your clients are coming in from out of town. You really should know what they're doing outside your market. That one is pretty straightforward. Going up to -- when you go to global, that's going to move more into private equity firms, institutions, and investors who are cross-border. So if I'm looking at a New York or a London, if I look at institutional properties, 50% plus of the capital for those bigger and higher-end properties are crossing borders. We think we will be able to offer that group a unique offering. So it's like from the small all the way up to the gigantic.

And I think, it also is something -- so it's hundreds of millions of potential revenue, but it's also a transformational positioning of CoStar Group where today, if I am a commercial real estate professional in London or Toronto or Madrid, I sort of look at these, our current solutions as being a London solution. I might even get a London solution as opposed to even a UK solution. I'm just used to thinking of it as how we service our local needs. I don't think it will be that hard for us to build out a fairly robust pan-European product. And I think that pan-European product will change the game as to how people view our product in at the local level. And I think it will be pretty -- I think that'll be pretty powerful. If I think about -- if I go back 10 year, 20 years, and I think about how -- 20 years ago how people viewed CoStar when we were really just servicing a handful of US cities, our value proposition might have been a 50 on a scale 100. Once we were serving all the major US markets, we went to 100. There was an exponential value growth to the consumer, the professional to user when we cover their entire investment footprint, which is generally multinational.

So, we're focusing heavily on investment sales tools, selling tools, comparable sales tools, news on international and I think that will change the way we're viewed and how we're positioned. So I don't know if I answered your question at all, but I threw out a random stream of consciousness on international and Suite upsell, which is exciting. It's pretty cool.

Operator

Our next question will come from Jeff Meuler at Baird. Please go ahead.

Jeff Meuler -- Baird -- Analyst

Yes, thanks. It sounds like a lot of the consolidated net bookings growth was in Suite. I caught a lot of metrics on Apartments traffic and lead quality and revenue, but I don't think I caught a Apartments net bookings trend. So would love some detail on that. Or if not, maybe just a random stream of consciousness on something else.

Andy Florance -- Founder, Director, President & Chief Executive Officer

All right. I am sorry. Do you want to do a random stream of consciousness, Scott?

Scott Wheeler -- Chief Financial Officer

Yes, it's my turn to do -- yes, we didn't talk specifically about apartment sales. But I mean, you can do the math on our total sales numbers and kind of assume if CoStar goes up quite a bit, we're going to have other sectors that will come down a bit. Yes, LoopNet stayed strong, information services stayed strong. And I'll say the volatility in Apartments is within the range of volatility it does every quarter, so it happened to be down a bit this quarter. But if you look back over the last 10 quarters of apartment sales, which appreciate, Jeff, we don't give these numbers, because of this fact because they are volatile, the Apartments net bookings move up and down on an average $5 million between each quarter. So you will see this kind of up and down in the pattern, but over time, the growth obviously is there because we're still pushing the thing at 20% revenue growth. So we had such good quarters mid to late 2020 in Apartments. I think property owners had used a lot of budget then. They trimmed them back a little bit in the first quarter, waiting for the second quarter season mostly.

And then, seeing where they're going to be positioned when we come back to these moratoriums, the eviction moratorium. So you saw a little hesitancy I think in property owners in the first quarter, which moderated the apartment side a bit.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes.

Scott Wheeler -- Chief Financial Officer

But CoStar picked up the slack. And --

Andy Florance -- Founder, Director, President & Chief Executive Officer

But -- and to be clear, Apartments.com is rocking it. Yes, we have [Indecipherable] like January is not the most exciting time for renting apartments out there, never has been. Historically, it was probably -- before we owned Apartments.com, it was a period in which the revenue actually fell very often.

Scott Wheeler -- Chief Financial Officer

Yes.

Andy Florance -- Founder, Director, President & Chief Executive Officer

But the eviction moratorium is also wet blanket. So we anticipate there'll be enthuse -- much more enthusiasm coming into the spring and summer. And again I think the marketing campaign we've got going right now, we're the only ones really doing it, is just super strong and then spurring up the mid-market. So the fluctuation Scott talks about is there and goes up, goes down, but overall goes up, up, up.

Operator

We have a last question from Joe Goodwin of JMP Securities. Please go ahead.

Joe Goodwin -- JMP Securities -- Analyst

Great. Thank you, guys, for taking the question. On the payments, the rental payments that are occurring through Apartments.com, can you just talk about the economics that CoStar gets from those payments? And then is that a -- will that develop into a large opportunity? Is that more just the tool set that you're offering to these folks? Thank you.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Yes. I'll let-do you want to hit just like credit card we're getting?

Scott Wheeler -- Chief Financial Officer

Yes, we get a few small percentages off of the -- off the cards. We don't get anything off the ACH type payments. So you get a little bit of margin off of the payment tools and it keeps people on the platform month to month, which is what's really important when they filled up their unit. It's not intended to be a primary revenue driver for us, but one of the tools that drives the advertising and the other services.

Andy Florance -- Founder, Director, President & Chief Executive Officer

As it gets up into tens of billions or to $100 billion, it would become much more meaningful. We do offer an ACH acceleration that has a fee on it too, but that's only a portion of the audience takes that. The real value there for us by a mile -- the real value for us is these folks, the owners who are liking our applications and our payment and our renewal tools tend to open up their wallet to purchase a $200, $300 online ad to get higher up in the presentation and that tends to dwarf the credit card or any sort of ACH acceleration piece. So that revenue potential of them buying the overall bundle of all the services we offer, the independent owner is a multi-billion dollar revenue opportunity at high margin. So that's where we're focused, not to dismiss the revenue potential of that significant growing payment, but we're really trying to get them the memberships. The overall membership in our platform going in. And it also feeds content, so the more participation we get in the marketplace, the more robust that marketplace is, which brings more renters in, which brings more advertisers. It's just part of the whole cycle [Phonetic], we need to provide a broad range of services to that independent owner which does not have the scale to really sort of -- to really do it in-house or implement things in-house. So --

Operator

And we have no further questions at this time. I'll turn the call back over to the presenters for closing remarks.

Andy Florance -- Founder, Director, President & Chief Executive Officer

Well, we appreciate you joining us for this first quarter 2021 earnings call. And we look forward to updating you on our progress. We obviously had a lot of stuff going on and I think we may be appearing optimistic. And that is -

Scott Wheeler -- Chief Financial Officer

As we are.

Andy Florance -- Founder, Director, President & Chief Executive Officer

How we are. So thank you very much for joining us. We look forward to talking to you again.

Operator

[Operator Closing Remarks]

Duration: 77 minutes

Call participants:

Bill Warmington -- Vice President, Investor Relations

Andy Florance -- Founder, Director, President & Chief Executive Officer

Scott Wheeler -- Chief Financial Officer

Andrew Jeffrey -- Truist Securities -- Analyst

Sterling Auty -- J.P. Morgan -- Analyst

George Tong -- Goldman Sachs -- Analyst

Pete Christiansen -- Citi -- Analyst

David Chu -- Bank of America -- Analyst

Mayank Tandon -- Needham & Company -- Analyst

Ryan Tomasello -- KBW -- Analyst

Mario Cortellacci -- Jefferies -- Analyst

Stephen Sheldon -- William Blair -- Analyst

Jeff Meuler -- Baird -- Analyst

Joe Goodwin -- JMP Securities -- Analyst

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