CoStar Group 2025 Q1 Earnings Misses Targets as Net Income Declines 320.9%
Friday, May 2, 2025 3:36 am ET
3min read CoStar Group (CSGP) reported its fiscal 2025 Q1 earnings on May 01st, 2025. The company posted a revenue of $732 million, exceeding analyst expectations of $730.04 million. However, costar group reported a net loss of $15 million, translating to a net loss per diluted share of $0.04, missing the estimated earnings per share of -$0.01. The company has adjusted its revenue guidance for the full year 2025 to be in the range of $3.115 billion to $3.155 billion, indicating approximately 15% year-over-year growth at the midpoint.
Revenue
CoStar Group saw its total revenue rise by 11.5% in Q1 2025 compared to the previous year. The Information and Analytics segment contributed $304.90 million, while costar itself generated $265.10 million. The information services segment added $39.80 million. Within the Online Marketplaces segment, Multifamily and LoopNet produced $282.50 million and $72.80 million respectively. Residential sales reached $27.20 million, and Other Revenues amounted to $44.80 million, totaling $732.20 million for the period.
Earnings/Net Income
CoStar Group reported a net loss of $0.04 per share in Q1 2025, a significant decline from the $0.02 profit per share in Q1 2024, marking a 300% negative change. The company's net loss reached $14.80 million, a 320.9% decline from the $6.70 million net income reported in Q1 2024. The EPS reflects challenges in managing strategic expansions.
Price Action
The stock price of CoStar Group edged up 2.47% during the latest trading day, has dropped 7.98% during the most recent full trading week, and has decreased 3.34% month-to-date.
Post-Earnings Price Action Review
Following the earnings report, CoStar Group's stock price experienced mixed reactions from the market. The positive revenue growth of 12% year-over-year, exceeding analyst estimates, typically boosts investor confidence and can lead to an initial uptick in stock prices. However, the reported net loss of $15 million and EPS of -$0.04 fell short of expectations, overshadowing the revenue growth with concerns about profitability. The acquisition of Matterport, contributing negatively to the net income, raises questions about the company's strategic management of expansion costs. While revenue growth signals potential market expansion, the negative earnings figures present a cautious outlook for investors. Broader market conditions and investor sentiment towards the company's future prospects also play a crucial role in influencing the stock price trajectory.
CEO Commentary
"CoStar Group delivered another strong quarter of results achieving 12% year-over-year revenue growth in Q1 2025," said Andy Florance, Founder and Chief Executive Officer of CoStar Group. He highlighted strong sales momentum across various business units, with significant increases in net new bookings for CoStar and LoopNet, and noted Apartments.com added the most properties in a quarter since 2016. Florance expressed optimism about the dedicated Homes.com sales force's growth and the acquisition of Matterport, aiming to enhance their data offerings and market position, reflecting a positive outlook amidst ongoing challenges.
Guidance
Christian Lown, CFO of CoStar Group, provided a revenue guidance range for the full year 2025 of $3.115 billion to $3.155 billion, indicating approximately 15% year-over-year growth at the midpoint. For Q2 2025, revenue is expected to range from $770 million to $775 million, suggesting 14% year-over-year growth. Adjusted EBITDA for the full year is projected between $355 million and $385 million, with Q2 guidance set at $50 million to $60 million.
Additional News
CoStar Group has been actively expanding its digital footprint with strategic acquisitions, notably completing the Matterport acquisition in February 2025. This acquisition is expected to enhance CoStar's offerings with advanced 3D digital twin technology, transforming real estate spaces into valuable data assets. In leadership news, CoStar Group recently strengthened its executive team, appointing Matthew Blocher as Vice President of Corporate Marketing & Communications, aiming to elevate brand visibility and outreach. Furthermore, the company continues to bolster its sales force, particularly within the Homes.com division, reflecting its commitment to scaling operations and driving growth across its marketplace platforms.
Revenue
CoStar Group saw its total revenue rise by 11.5% in Q1 2025 compared to the previous year. The Information and Analytics segment contributed $304.90 million, while costar itself generated $265.10 million. The information services segment added $39.80 million. Within the Online Marketplaces segment, Multifamily and LoopNet produced $282.50 million and $72.80 million respectively. Residential sales reached $27.20 million, and Other Revenues amounted to $44.80 million, totaling $732.20 million for the period.
Earnings/Net Income
CoStar Group reported a net loss of $0.04 per share in Q1 2025, a significant decline from the $0.02 profit per share in Q1 2024, marking a 300% negative change. The company's net loss reached $14.80 million, a 320.9% decline from the $6.70 million net income reported in Q1 2024. The EPS reflects challenges in managing strategic expansions.
Price Action
The stock price of CoStar Group edged up 2.47% during the latest trading day, has dropped 7.98% during the most recent full trading week, and has decreased 3.34% month-to-date.
Post-Earnings Price Action Review
Following the earnings report, CoStar Group's stock price experienced mixed reactions from the market. The positive revenue growth of 12% year-over-year, exceeding analyst estimates, typically boosts investor confidence and can lead to an initial uptick in stock prices. However, the reported net loss of $15 million and EPS of -$0.04 fell short of expectations, overshadowing the revenue growth with concerns about profitability. The acquisition of Matterport, contributing negatively to the net income, raises questions about the company's strategic management of expansion costs. While revenue growth signals potential market expansion, the negative earnings figures present a cautious outlook for investors. Broader market conditions and investor sentiment towards the company's future prospects also play a crucial role in influencing the stock price trajectory.
CEO Commentary
"CoStar Group delivered another strong quarter of results achieving 12% year-over-year revenue growth in Q1 2025," said Andy Florance, Founder and Chief Executive Officer of CoStar Group. He highlighted strong sales momentum across various business units, with significant increases in net new bookings for CoStar and LoopNet, and noted Apartments.com added the most properties in a quarter since 2016. Florance expressed optimism about the dedicated Homes.com sales force's growth and the acquisition of Matterport, aiming to enhance their data offerings and market position, reflecting a positive outlook amidst ongoing challenges.
Guidance
Christian Lown, CFO of CoStar Group, provided a revenue guidance range for the full year 2025 of $3.115 billion to $3.155 billion, indicating approximately 15% year-over-year growth at the midpoint. For Q2 2025, revenue is expected to range from $770 million to $775 million, suggesting 14% year-over-year growth. Adjusted EBITDA for the full year is projected between $355 million and $385 million, with Q2 guidance set at $50 million to $60 million.
Additional News
CoStar Group has been actively expanding its digital footprint with strategic acquisitions, notably completing the Matterport acquisition in February 2025. This acquisition is expected to enhance CoStar's offerings with advanced 3D digital twin technology, transforming real estate spaces into valuable data assets. In leadership news, CoStar Group recently strengthened its executive team, appointing Matthew Blocher as Vice President of Corporate Marketing & Communications, aiming to elevate brand visibility and outreach. Furthermore, the company continues to bolster its sales force, particularly within the Homes.com division, reflecting its commitment to scaling operations and driving growth across its marketplace platforms.
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