Research · Sep 3, 2026
[CSGP] CoStar Group Thesis 2026: Homes.com Surge Extends Multi-Year Double-Digit Growth Streak
CoStar Group, Inc. FY25 revenue $3.25B (+19%); op income -$72M (reflecting Homes.com investment cycle + Matterport integration); NI $7M; EPS $0.02 (basically zero, GAAP impacted by reinvestment + acquisitions). FCF $41M (vs -$245M FY24, capex peak rolling off). Capex $-389M (-39% from $638M FY24). Q3 revenue $834M (+20% YoY); Adj EBITDA $115M (+51% YoY); 58th consecutive quarter of double-digit revenue growth. Q3 segment performance — Commercial Information + Marketplace: 47% profit margin. Residential portals (Apartments.com + Homes.com): Q3 revenue $411M annualizing $1.644B; +22.7% QoQ / +31.3% YoY. Apartments.com Q3 $303M (+11% YoY) with >$1.2B annual run rate. LoopNet Q3 +10% revenue growth. Matterport Q3 $44M revenue (+12% above expectations). CoStar products Q3 +8% revenue growth. Homes.com fastest-growing revenue product ever launched in CoStar history; 50% of software development costs allocated to AI features. Domain acquisition (Australian residential) contributing. Zillow facing multiple lawsuits — competitive dynamic. Total debt $1.14B (+10%); buyback $575M FY25 (+1,849% from $30M FY24); dividend $0. FY25 raised guide (per Q3): revenue $3.23-$3.24B (excluding Domain); CoStar product +7% FY; Residential revenue more than double to $210-$215M; LoopNet +10-11% FY; Q4 CoStar product +8-9%; Q4 Residential $100-$105M. Risks: residential search competition (Zillow, Redfin, Realtor.com, Trulia), commercial real estate cycle, Homes.com investment cycle, Matterport integration, Domain integration, AI competitive landscape, FX, capital allocation discipline.