Please ensure Javascript is enabled for purposes of website accessibility

CoStar Group, Inc. Bookings Soar 47%

By Joe Tenebruso - Feb 26, 2018 at 7:50AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The real estate information company achieved a $1 billion revenue run rate.

CoStar Group (CSGP 5.84%) reported fourth-quarter results on Feb. 21. The provider of commercial real estate information, analytics, and online marketplaces is enjoying accelerating sales growth as it takes share from its rivals.

CoStar Group results: The raw numbers


Q4 2017

Q4 2016

Year-Over-Year change


$254 million

$218 million


Net income

$44 million

$30 million


Earnings per share




Data source: CoStar Group Q4 2017 earnings press release.

What happened with CoStar Group this quarter?

Companywide net new bookings jumped 47% year over year to $43 million, driven by a 100% surge in CoStar Suite bookings and a 36% leap in bookings.

" amazingly bucked the historically negative seasonality of the winter months and had its best net new bookings quarter ever," founder and CEO Andrew Florance said in a press release.

Florance also noted that CoStar is benefiting from the recent bankruptcy of its No. 1 competitor, Xceligent. CoStar converted nearly 400 of its former rival's clients into customers in December and a total of 1,000 through Jan. 31.

On a chess board, a golden king stands before toppled silver pieces.

CoStar Group's competitors are falling by the wayside. Image source: Getty Images.

In all, CoStar Group revenue rose 16% in the fourth quarter, to $254 million, fueled by a 26% jump in multifamily revenue. For the full year, the company's revenue increased 15%, to $965 million.

"We had an exceptional year and I am delighted that we reached $1 billion in revenue run rate in the fourth quarter of 2017, one full year ahead of our goal we announced in 2014," Florance said.

Moreover, CoStar Group continues to use acquisitions to press its advantage in the multifamily arena, most recently with its purchase of ForRent, a rental property website company.

"I welcome the ForRent team to the best multifamily marketing service in the United States," Florance said. "We continue to deliver unparalleled value to our advertisers and consumer users as a leader in the apartments industry in traffic, visits, leads, leases, and revenue."

All told, adjusted EBITDA -- which excludes stock-based compensation, acquisition-related charges, and certain other items -- grew 4% to $78 million. And adjusted (non-GAAP) net income, which benefited from a lower effective tax rate, increased 8% to $45 million, or $1.25 per share.

Looking forward 

CoStar Group expects first-quarter revenue of $269 million to $272 million, signifying year-over-year growth of 19% at the midpoint of that range. The company also anticipates adjusted EBITDA of $70 million to $74 million and non-GAAP EPS of $1.32 to $1.40.

In addition, CoStar Group issued full-year guidance for 2018, including:

  • Revenue of $1.170 billion to $1.190 billion, representing 22% growth at the midpoint.
  • Adjusted EBITDA of $365 million to $375 million, up from $280 million in 2017.
  • Non-GAAP EPS of $7.01 to $7.21, up from $4.59.

"We believe our exceptional sales performance throughout the year and particularly in the fourth quarter of 2017 positions us well for accelerating revenue growth in 2018," CFO Scott Wheeler said.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

CoStar Group, Inc. Stock Quote
CoStar Group, Inc.
$62.85 (5.84%) $3.47

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.