CoStar Group (CSGP 0.24%) reported first-quarter results on April 26. The provider of commercial real estate analytics and online marketplaces is enjoying record sales of its subscription services as it expands its online empire.

CoStar Group results: The raw numbers

Metric

Q1 2017

Q1 2016

Year-Over-Year Change

Revenue

$227 million

$200 million

13%

Net income

$22 million

$17 million

32%

Earnings per share

$0.68

$0.52

31%

Data source: CoStar Group Q1 2017 earnings press release.

What happened with CoStar Group this quarter?

CoStar enjoyed record Q1 bookings of $35 million, representing growth of 18% from the prior quarter.

"We had an exceptionally strong first quarter of 2017 as our investments in our sales force, marketing campaigns, technology enhancements and research improvements combined to deliver outstanding sales and revenue results," said CoStar Founder and CEO Andrew Florance in a press release.

CoStar's revenue rose 13% year over year to $227 million, above its guidance range of $223 million to $225 million. Its growth was broad-based, highlighted by a 13% rise in CoStar Suite revenue and a 22% jump in multifamily revenue.

'The first quarter of 2017 was our second best multifamily sales quarter as our newly revamped and vastly improved sales team continues the momentum from last fall," Florance said. "According to comScore, visits and unique visitor traffic in March reached all-time highs for Apartments.com and our multifamily network as we continue to expand our lead over the competition."

EBITDA (earnings before interest, taxes, depreciation, and amortization) -- adjusted to exclude stock-based compensation, acquisition-related costs, and other special items -- increased 11% to $64 million. That was above CoStar's guidance range of $57 million to $60 million. Adjusted (non-GAAP) net income increased 11% year over year to $34 million, or $1.05 per share, which also exceeded CoStar's forecast of $0.92 to $0.97 in non-GAAP EPS.

Rural land

Image source: Getty Images.

Acquisition news

On April 10, 2017, CoStar agreed to buy LandWatch.com from DataSphere Technologies. LandWatch is a leader in rural properties for sale, including farms, ranches, hunting land, and timberland. CoStar believes the deal -- which is expected to close in May -- will nearly double its land marketplace revenue.

"Rural land is a multitrillion-dollar real estate asset class in the United States," Florance said. "The acquisition of LandWatch solidifies our position as the number one online network of marketplaces for rural real estate."

Looking forward

Thanks to its strong first-quarter results and the expected positive impact of its LandWatch.com acquisition, CoStar raised its full-year 2017 revenue and earnings outlook. Revenue is now anticipated to be between $945 million and $955 million, up from prior estimates of $935 million to $945 million. And non-GAAP EPS is projected to be in a range of $4.30 to $4.40, up from a previous forecast of $4.18 to $4.28.

Looking further ahead, CoStar reiterated its goal to achieve $1 billion in revenue and 40% margin in 2018.

"Recent job growth has been strong, which bodes well for commercial leasing activity as well as the apartment household formation that drives the apartment sector, Florance said during a conference call with analysts. "Fortunately, CoStar is an integral part of the leasing and marketing program for building owners and managers. Therefore, the combination of a healthy economy and the need to lease space is a good situation for us."