CoStar Q3 Earnings Beat Estimates, Revenues Up Y/Y, Shares Fall

CoStar Group CSGP reported non-GAAP earnings of 23 cents per share in the third quarter of 2025, which surpassed the Zacks Consensus Estimate by 27.78%. The company registered earnings of 22 cents per share in the year-ago quarter, which increased 4.5% year over year.

Revenues of $833.6 million beat the Zacks Consensus Estimate by 0.91% and increased 20.4% year over year. This represents the company’s 58th consecutive quarter of double-digit revenue growth. The upside was driven by robust performance in key segments. 

However, CSGP stock lost 2.17% in pre-market trading.

CSGP’s Top-Line Details

CoStar’s revenues (33.2% of revenues) of $277 million beat the consensus estimate by 0.77% and increased 7.8% year over year.

CoStar Group, Inc. Price, Consensus and EPS Surprise

CoStar Group, Inc. price-consensus-eps-surprise-chart | CoStar Group, Inc. Quote

Information Services’ revenues (5% of revenues) of $41.3 million beat the consensus mark by 4.29% and increased 25.2% year over year.

Multifamily revenues (36.3% of revenues) of $303 million missed the consensus estimate by 0.73% but increased 11.5% year over year.

LoopNet’s revenues (9.5% of revenues) of $79.3 million beat the consensus mark by 0.76% and increased 11.8% year over year.

Third-quarter residential revenues (6.6% of revenues) were $54.9 million, which surpassed the consensus mark by 74.29% and increased 98.2% year over year. 

Other marketplace revenues (9.4% of revenues) of $78.1 million beat the consensus mark by 4.13% and increased 141.8% year over year.

In the third quarter of 2025, Net New Bookings reached $84 million, representing a 92% increase year over year.

In the reported quarter, CoStar’s sites reached 143 million average monthly unique visitors, while the Homes.com Network achieved 115 million.

CoStar’s Operating Details

In the reported quarter, selling and marketing expenses increased 26.3% year over year to $418.3 million. As a percentage of revenues, selling and marketing expenses were 50.2% compared with 47.8% in the year-ago quarter.

General and administrative expenses, as a percentage of revenues, expanded 360 basis points (bps) on a year-over-year basis to 18.8%.

Software development expenses, as a percentage of revenues, expanded 90 bps, while Customer base amortization expenses rose 230 bps year over year.

Operating expenses increased 34.9% year over year to $712.5 million. As a percentage of revenues, operating expenses increased 920 bps year over year to 85.5%.

Adjusted EBITDA was $114.6 million compared with the year-ago quarter’s $75.9 million. The adjusted EBITDA margin expanded 280 bps to 13.7%.

CSGP’s Balance Sheet & Cash Flow Statement

CoStar reported cash and cash equivalents of $1.93 billion as of Sept. 30, 2025, compared with $3.62 billion as of June 30.

The company had a long-term debt of $992.9 million as of Sept. 30, 2025, compared with $992.5 million as of June 30.

Cash generated by operating activities was $267.9 million in the reported quarter compared with $199.7 million in the previous quarter.

CSGP Initiates Positive Q4 & 2025 Guidance

For the fourth quarter of 2025, the company expects revenues between $885 million and $895 million, indicating year-over-year growth of 25% at the mid-point.

The company anticipates adjusted EBITDA between $150 million and $160 million for the fourth quarter of 2025.

CSGP expects fourth-quarter non-GAAP earnings per share between 26 cents and 28 cents.

For 2025, revenues are expected to be between $3.23 billion and $3.24 billion, indicating year-over-year growth of 18% at the mid-point. 

The company anticipates adjusted EBITDA between $415 million and $425 million for 2025.

CSGP expects 2025 non-GAAP earnings per share between 82 cents and 84 cents.

CSGP’s Zacks Rank & Other Stocks to Consider

CoStar currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Alkami Technology ALKT, AMETEK AME, and Advanced Energy AEIS. While Alkami Technology sports a Zacks Rank #1 (Strong Buy), AMETEK and Advanced Energy carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkami Technology is set to report third-quarter 2025 results on Oct. 30. Alkami Technology shares have lost 36.2% year to date.

AMETEK is slated to report third-quarter 2025 results on Oct. 30. AMETEK shares have gained 2.7% year to date.

Advanced Energy is set to report third-quarter 2025 results on Nov. 4. Advanced Energy shares have surged 77% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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