Will CoStar's Earnings & Revenue Beat in Q1 Drive the Stock Price?

CoStar Group CSGP reported non-GAAP earnings of 14 cents per share in the first quarter of 2025, which surpassed the Zacks Consensus Estimate by 27.27%. The company registered earnings of 10 cents per share in the year-ago quarter, increasing 40% year over year.

Revenues of $732.2 million beat the Zacks Consensus Estimate by 1.78% and increased 11.5% year over year. This represents the company’s 56th consecutive quarter of double-digit revenue growth. The upside was driven by robust performance in key segments and Matterport Acquisition. In the first quarter of 2025, Matterport acquisition contributed $15.9 million in revenues in the reported quarter., 

CSGP raised its top-line guidance for the second quarter of 2025 based on the first quarter of 2025 results, which bodes well for investors. The company’s shares have also gained 15.5% against the Zacks Computer and Technology sector’s decline of 11.2% in the year-to-date period.

CSGP's earnings beat the Zacks Consensus Estimate in the trailing four quarters, the earnings surprise being 37.41%, on average. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

CoStar Group, Inc. Price, Consensus and EPS Surprise

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

CSGP’s Top-Line Details

CoStar’s revenues (36.2% of revenues) of $265.1 million beat the consensus estimate by 0.11% and increased 5.9% year over year.

Apartments.com’s revenues increased 11% year over year to $282 million. The Apartments.com network had 38 million average monthly unique visitors in the first quarter of 2025. Net new bookings in the first quarter amounted to $56 million, up 6% sequentially and 29% year over year.

Information Services’ revenues (5.4% of revenues) of $39.8 million beat the consensus mark by 9.64% and increased 20.6% year over year.

Multifamily revenues (38.6% of revenues) of $282.5 million missed the consensus estimate by 0.34% but increased 10.9% year over year.

LoopNet’s revenues (9.9% of revenues) of $72.8 million missed the consensus mark by 0.78% and increased 5.4% year over year.

First-quarter residential revenues (3.7% of revenues) were $27.2 million, which missed the consensus mark by 5.23% and increased 46.2% year over year. In the first quarter of 2025, Homes.com network traffic hit a record of 104 million unique visitors.

Other marketplace revenues (6.1% of revenues) of $44.8 million beat the consensus mark by 51.61% and increased 46.4% year over year.

Per Google Analytics, CoStar’s global websites reached a record 130 million average monthly unique visitors, a 28% increase year over year.

CoStar’s Operating Details

In the reported quarter, selling and marketing expenses increased 0.8% year over year to $368.9 million. As a percentage of revenues, selling and marketing expenses were 50.4% compared with 55.8% in the year-ago quarter.

General and administrative expenses, as a percentage of revenues, expanded 430 basis points (bps) on a year-over-year basis to 19.3%.

Software development expenses, as a percentage of revenues, expanded 40 bps, while Customer base amortization expenses rose 70 basis points year over year.

Adjusted EBITDA was $66 million compared with the year-ago quarter’s $12 million. The adjusted EBITDA margin expanded 710 bps to 9%.

CSGP’s Balance Sheet & Cash Flow Statement

CoStar reported cash and cash equivalents of $3.68 billion as of March.31, 2025, compared with $4.68 billion as of Dec. 31, 2024.

The company had a long-term debt of $992.2 million as of March 31, 2025, compared with $991.9 million as of Dec. 31, 2024.

Cash generated by operating activities was $53.2 million in the reported quarter compared with $393 million in the previous quarter.

CSGP Initiates Q2 & 2025 Guidance

For the second quarter of 2025, the company expects revenues between $770 million and $775 million, indicating year-over-year growth of 14% at the mid-point.

The company anticipates adjusted EBITDA between $50 million and $60 million for the second quarter of 2025.

For 2025, revenues are expected to be between $3.115 billion and $3.155 billion, indicating year-over-year growth of 15% at the mid-point. 

The company anticipates adjusted EBITDA between $355 million and $385 million for 2025.

CSGP’s Zacks Rank & Stocks to Consider

CoStar currently carries a Zacks Rank #3 (Hold).

Affirm AFRM, Criteo CRTO and Paycom Software PAYC are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. AFRM, CRTO and PAYC sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Affirm shares have declined 17.2% year to date. AFRM is set to report its third-quarter fiscal 2025 results on May 8.

Criteo shares have lost 12.9% year to date. CRTO is set to report its first-quarter 2025 results on May 2.

Paycom Software shares have gained 11.5% year to date. PAYC is set to report its first-quarter 2025 results on May 7.

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

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