CSGP — CoStar Group, Inc.

CSGP Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $925 million, an 18% year-over-year increase, marking the 61st consecutive quarter of double-digit revenue growth.
• Adjusted EBITDA: $184 million, more than double year-over-year, representing a 20% margin and the second highest quarterly level in company history.
• Net Income: Increased by 817%.
• Net New Bookings: $69 million, up 3% sequentially but down 26% year-over-year.
• Commercial Revenue: $481 million, up 8% year-over-year; adjusted EBITDA of $172 million (36% margin).
• Residential Revenue: $444 million, up 33% year-over-year; adjusted EBITDA of $12 million, marking the first profitable quarter for the residential segment since launching Homes in Q1 2024.
• Subscriber Growth: CoStar platform subscribers increased by 19% year-over-year to 327,000.

2. Strategic Updates and Business Highlights

• Product Launches: Introduced several initiatives including CoStar Rent Benchmark, expansion into France, and enhancements to CoStar Real Estate Manager.
• Matterport Performance: Subscription revenue grew 16% year-over-year, with a new pricing plan aimed at accelerating adoption.
• LoopNet Growth: Revenue increased by 14% year-over-year, with significant growth in paid listings.
• Ten-X Restructuring: Revenue declined by $4 million as the business is restructured for future growth.
• New Headquarters: Completed a consolidated campus in Richmond, Virginia, aimed at enhancing operational efficiency and scalability.

3. Forward Guidance and Outlook

• Full-Year Guidance: Confirmed revenue guidance of $3.715 billion to $3.755 billion, representing a 15% year-over-year increase at the midpoint.
• Adjusted EBITDA Guidance: Affirmed range of $780 million to $820 million for the year.
• Q3 2026 Guidance: Expected revenue between $935 million and $945 million, with adjusted EBITDA ranging from $190 million to $210 million.

4. Challenges and Points of Concern

• Declining Net New Bookings: Year-over-year decline of 26% raises concerns about future revenue growth.
• Competitive Pressures: Increased competition in the multifamily market is affecting pricing and customer acquisition.
• Ten-X Performance: The restructuring of Ten-X is impacting revenue and reflects challenges in the transactional business model.
• Market Environment: Elevated vacancy rates in the multifamily sector are causing stress for property owners, leading to increased price sensitivity.

5. Notable Q&A Insights

• Net New Bookings Discussion: Management acknowledged that the decline in bookings was influenced by the restructuring of Ten-X and ongoing competition, particularly in the residential segment.
• Sales Force Optimization: Transitioning to a field sales force is expected to enhance productivity, with management expressing confidence in achieving revenue growth through improved sales strategies.
• AI Investments: Management indicated that AI initiatives are yielding cost savings that exceed token consumption costs, positioning the company favorably for future growth.
• Market Strategy: The focus is shifting towards more targeted marketing strategies, particularly for Homes.com, with an emphasis on generating leads rather than broad brand advertising.

Overall, CoStar Group reported strong financial results and strategic advancements in Q2 2026, but faces challenges in net new bookings and competitive pressures that could impact future growth.