CoStar Group 2025 Q2 Earnings Mixed Performance as Net Income Drops 67.7%

CoStar Group (CSGP) reported its fiscal 2025 Q2 earnings on Jul 22nd, 2025. CoStar Group’s revenue for Q2 2025 of $781.3 million exceeded analyst expectations, marking a robust 15% year-over-year increase. However, the company’s net income fell short of projections, declining to $6.2 million, a 67.7% decrease compared to the previous year. Despite the drop in net income, CoStar Group raised its full-year revenue guidance, expecting a growth of 15% at the midpoint, alongside increased adjusted EBITDA estimates.

Revenue

CoStar Group reported a 15.3% increase in total revenue for Q2 2025, reaching $781.3 million, up from $677.8 million in Q2 2024. Information and analytics generated $310.2 million, while the CoStar segment contributed $270.9 million. Information Services added $39.3 million, and Online Marketplaces brought in $292.3 million. Multifamily also contributed $292.3 million, LoopNet accounted for $75.7 million, Residential added $28.4 million, and Other Revenues totaled $74.7 million.

Earnings/Net Income

CoStar Group's earnings per share (EPS) declined by 80.0% to $0.01 in Q2 2025 from $0.05 in Q2 2024. The net income decreased to $6.2 million, a significant drop of 67.7% from the $19.2 million reported in the previous year. The EPS reflects a challenging quarter for the company.

Price Action

The stock price of CoStar Group edged up 0.16% during the latest trading day, increased 1.27% during the most recent full trading week, and climbed 7.03% month-to-date.

Post-Earnings Price Action Review

The approach of buying CoStar Group shares when earnings exceed expectations and selling after 30 days yielded an 11.64% return, considerably underperforming the benchmark return of 88.32%. Despite the modest returns relative to risk, as indicated by a Sharpe ratio of 0.06, the strategy managed to minimize losses during market downturns, evidenced by a maximum drawdown of 0.00%. While maintaining stability in adverse conditions, the strategy's overall performance suggests the need for refinement to enhance returns in line with broader market achievements.

CEO Commentary

"We had an outstanding Q2 2025 as we delivered our 57th consecutive quarter of double-digit revenue growth with a 15% year-over-year increase in revenue," said Andy Florance, Founder and Chief Executive Officer of CoStar Group. "We achieved our all-time high net new bookings in Q2 of $93 million, a 65% increase from last quarter, powered by Apartments.com’s highest net new bookings quarter in two years. The investments in our sales force, mission critical products, and marketplaces are driving these outstanding results as our commercial information and marketplace brands realized a 43% profit margin for Q2 2025."

Guidance

"We exceeded the top-end of our revenue and adjusted EBITDA guidance in Q2," said Christian Lown, CFO of CoStar Group. The Company now expects revenue for the full year 2025 in the range of $3.135 billion to $3.155 billion, representing approximately 15% year-over-year growth at the midpoint. For Q3 2025, revenue is expected to be in the range of $800 million to $805 million. The Company is increasing its adjusted EBITDA guidance for the full year 2025 to a range of $370 million to $390 million and expects non-GAAP net income per diluted share for the full year to be in a range of $0.76 to $0.80.

Additional News

In recent developments, CoStar Group named Alexa-Maria Rathbone Barker as the Head of CoStar for Europe, reinforcing its commitment to European growth and leadership. Additionally, CoStar Group and Happening Technology resolved their dispute amicably, showcasing the company's focus on maintaining positive industry relationships. Furthermore, CoStar Group experienced a favorable legal outcome, as a Federal Court found rival CREXi guilty of infringing CoStar’s copyrighted images, highlighting CoStar's efforts in protecting its intellectual property.