CSGP · Q2 2026 Earnings

Cautious

CoStar Group

Reported July 28, 2026

30-second summary

Revenue grew 18.4% YoY to $925M, landing inside the $922-932M guide but missing consensus of $929M by 0.5% — and management cut the FY26 revenue guide by $65M at midpoint (from $3.80B to $3.735B) while reducing implied FY growth from ~17% to ~15%. Adjusted EBITDA of $184M beat the high end of the $160-180M guide, EPS of $0.32 cleared the $0.30 high end, and the FY26 EPS and EBITDA ranges were reaffirmed — meaning management is defending the profitability call while absorbing $65M of revenue, pointing to a cumulative ~$100M expense-base reduction vs. original February 2026 guidance (not incremental to this quarter's cut). Residential segment turned adjusted EBITDA-positive for the first time at $12M — a $41M improvement over Q1 — the standout structural datapoint on a print that otherwise reveals the top-line narrative is quietly deteriorating.

Headline numbers

EPS

Q2 FY2026

$0.32

+10.3% vs est.

Revenue

Q2 FY2026

$0.93B

+18.4% YoY

-0.5% vs est.

Gross margin

Q2 FY2026

78.7%

Operating margin

Q2 FY2026

8.2%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$0.93B	$0.78B	+18.4%	$0.90B	+3.1%
EPS	$0.32	$0.17	+88.2%	$0.23	+39.1%
Gross margin	78.7%	78.5%	+20bps	78.1%	+60bps
Operating margin	8.2%	-3.5%	+1170bps	0.3%	+790bps

Guidance

Company lowered full-year 2026 revenue guidance by $65M at midpoint (from $3.80B to $3.735B) and reduced YoY growth outlook from ~17% to ~15%, but maintained Adjusted EPS and EBITDA ceilings and reaffirmed record full-year profitability through aggressive cost control.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$922 million to $932 million	$925 million	in-line	Met
Adjusted EPS	Q2 FY2026	$0.27 to $0.30	$0.32	+$0.02 above guide	Beat
Adjusted EBITDA	Q2 FY2026	$160 million to $180 million	$184 million	+$4 million above guide	Beat
Revenue YoY Growth	Q2 FY2026	approximately 19% year-over-year	18.4% year-over-year	-0.6pts below guide	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EPS	Q3 FY2026	$0.31 to $0.34	—
Revenue	Q3 FY2026	$0.935 billion to $0.945 billion	+12.7-13.7%
Adjusted EBITDA	Q3 FY2026	$190 million to $210 million	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2026	$3.78 billion to $3.82 billion	$3.715 billion to $3.755 billion	-$0.045 billion at midpoint	Lowered
Revenue YoY Growth	FY 2026	approximately 17% year-over-year	approximately 15% year-over-year	-2pts	Lowered

Reaffirmed unchanged this quarter: Adjusted EPS ($1.32 to $1.39), Adjusted EBITDA ($780 million to $820 million)

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Commercial Real Estate	$0.481B	—	+7.8%
Residential Real Estate	$0.444B	—	+32.5%
Commercial Real Estate Adjusted EBITDA	$172 million	—	—
Residential Real Estate Adjusted EBITDA	$12 million	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Adjusted EBITDA	$184 million	$85 million	—
Adjusted EBITDA Margin	19.9%	—	—
Net New Bookings	$69 million	$93 million	—
Average Monthly Unique Visitors	118 million	—	—
Apartments.com AI Sessions (Cumulative)	>500,000	—	—
Operating Margin	8.2%	—	—

Management tone

Narrative arc: Homes.com unit-economics proof (Q2-25) → Sales-engine throttled (Q3-25) → AI-as-moat (Q4-25) → AI product validation (Q1-26) → Cost discipline defends the profit call (Q2-26).

Over four quarters management pivoted from investing aggressively behind Homes.com and Matterport (Q2-Q4 2025), to raising both EBITDA and EPS on operational leverage (Q1 2026), to this quarter's posture of cutting revenue guidance while pointing to a cumulative ~$100M expense-base reduction vs. original February guidance as the mechanism holding EBITDA at $780-820M and EPS at $1.32-1.39. The qualitative statement — "we accomplished all of this while reducing our projected expense base by roughly $100 million versus our original guidance" — reframes the story from growth-driven margin expansion to cost-driven margin defense. That is a materially different investment case than the one Andy sold at year-end.

The residential-turns-positive milestone was foreshadowed for four consecutive quarters and finally delivered this print. Q2-2025 marked Homes.com unit-economics proof; Q4-2025 committed to a 2029 run-rate/2030 full-year profitability glide path; Q1-2026 documented AI-driven traffic acceleration; Q2-2026 shows the segment printing $12M of adjusted EBITDA, a $41M sequential improvement. The press-release language — "For the first time, our residential segment turned Adjusted EBITDA positive" — is the highest-confidence structural datapoint in the brief and is what saves the sentiment from turning bearish.

The commercial segment framing has quietly reversed. Andy's Q4-2025 pivot — "the CRE economy is shifting from headwind to tailwind…commercial sales volumes have climbed 30% year-over-year" — underwrote the FY26 margin call. This quarter's 7.8% CRE growth (vs. 20.5% in Q4-2025 and 15.4% in Q1-2026) suggests the tailwind is either fading or the segment recut (Matterport, Apartments moves) is masking organic deceleration. Without a transcript to interrogate this, the print itself is the signal: the FY revenue cut is coming from the commercial side, not residential.

The $700M buyback disclosure remains absent — third consecutive quarter without it. Q4-2025 announced $700M; Q1-2026 reported $505M repurchased with $195M remaining but no forward commitment; Q2-2026 makes no mention. Management is now two quarters into silent withdrawal on a capital-return commitment that was headline material at year-end, and the cumulative ~$100M expense-base reduction alongside affirmed EBITDA suggests capital is being redirected — but toward what has not been disclosed.

Answers to last quarter's watch list

Q2 revenue above $932M validating ~19% YoY pace + FY26 21% margin step-up timing — Revenue landed at $925M, inside the guide but not above the high end, and 18.4% YoY missed the ~19% midpoint. More importantly, the FY revenue guide was cut by $65M at midpoint, effectively conceding that the ~19% pace won't hold for the full year. No explicit management framing of the FY EBITDA margin step-up timing was disclosed on the print.

Resolved negatively

Q2 net new bookings clearing $80M — Q2 bookings came in at $69M, below the $80M threshold and well below Q2 2025's $93M. Sequential bookings are essentially flat with Q1's $67M, confirming the productivity concern flagged last quarter is now weighing on the run rate.

Resolved negatively

$700M buyback reinstated or explicit alternative capital deployment language — No mention of share repurchase in the current disclosure. Third consecutive quarter of silence on the buyback commitment.

Not resolved

Homes.com AI member adds accelerating from Q1's 4,300 base — The company didn't disclose Q2 Homes.com AI member net adds on the print. The new disclosure — cumulative Apartments.com AI Sessions >500,000 — is a different metric and doesn't answer the question.

Continue monitoring

May 1 Homes.com new-customer price increase in Q2 ARPU disclosure — ARPU disclosure by product was not called out on the print. No commentary on the timing or magnitude of the "measured" renewal increases.

Continue monitoring

H2 2026 EBITDA margin trajectory — Q2 must not soften — Q2 EBITDA margin of 19.9% cleared the ~18% implied by the prior Q2 guide by ~200bps, and Q3 is guided to 21% at midpoint. To hit the FY midpoint 21.4% ($800M / $3.735B), Q4 needs roughly 23-24% margin — a tall order but no longer implausible given the pace of expense reduction. The margin call itself is intact despite the revenue cut.

Resolved positively

What to watch into next quarter

Whether Q3 revenue lands at or above $945M (guide high end) and CRE revenue growth stabilizes above 8% YoY — a second consecutive quarter of sub-10% commercial growth would invalidate the "headwind to tailwind" narrative Andy laid out at year-end

Q3 net new bookings: two consecutive sub-$70M prints suggests the sales productivity ramp isn't accelerating on schedule; watch whether Q3 bookings clear $85M as a signal the moderated hiring pace hasn't broken conversion

The cumulative ~$100M expense-base reduction disclosure: management now needs to name what was cut and confirm whether these cuts affect long-term revenue generation capacity or are purely operational — no detail was on the print

Whether the $700M buyback is formally withdrawn, reinstated, or replaced with an explicit alternative capital-deployment framework (M&A pipeline, dividend, deleveraging) — a fourth quarter of silence would be a serious governance flag

Residential Real Estate adjusted EBITDA trajectory from Q2's $12M — whether the segment sustains positive EBITDA in Q3 or reverts as investment cadence resumes, which is the test of whether $12M was a milestone or a peak

Q4 EBITDA margin: to hit FY midpoint of ~21.4%, Q4 needs roughly 23-24% margin; any Q3 shortfall below the guided 21% forces a fourth-quarter margin miracle to hold the reaffirmed FY EBITDA range

Sources

CoStar Group Q2 FY2026 Earnings Press Release — https://www.sec.gov/Archives/edgar/data/1057352/000105735226000061/q2fy262026earningspressr.htm

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