CSGP · Q3 2025 Earnings

Bullish

CoStar Group

Reported October 28, 2025

30-second summary

Revenue grew 20.4% YoY to $834M, blowing past the $800-805M guide and accelerating from Q2's 15.3%. Net new bookings hit $84M (+92% YoY), Homes.com members reached 26,000 (+150% YoY from the 6,300 added last quarter alone), and management raised FY revenue to $3.23-3.24B, EBITDA to $415-425M (+$40M midpoint), and EPS to $0.82-0.84 — with Q4 revenue guided at ~25% YoY, the strongest growth rate in years. The Homes.com inflection that began last quarter has compounded, not faded.

Headline numbers

EPS

Q3 FY2025

$0.23

Revenue

Q3 FY2025

$0.83B

+20.4% YoY

Gross margin

Q3 FY2025

79.3%

Operating margin

Q3 FY2025

-6.1%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$0.83B	+20.4%	$0.78B	+6.8%
EPS	$0.23	—	$0.17	+35.3%
Gross margin	79.3%	—	78.5%	+80bps
Operating margin	-6.1%	—	-3.5%	-260bps

Guidance

Strong Q3 beat across revenue, EPS, and EBITDA, followed by substantial full-year guidance raises across all three metrics; Q4 guidance introduced at elevated levels reflecting continued momentum.

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	Q3 FY2025	$800 million to $805 million	$834 million	+$29-34 million above guide	Beat
Non-GAAP EPS	Q3 FY2025	$0.15 to $0.17	$0.23	+$0.06 above guide	Beat
Adjusted EBITDA	Q3 FY2025	$75 million to $85 million	$115 million	+$30-40 million above guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q4 FY2025	$885 million to $895 million	approximately 25% at the midpoint
Non-GAAP EPS	Q4 FY2025	$0.26 to $0.28	—
Adjusted EBITDA	Q4 FY2025	$150 million to $160 million	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2025	$3.135 billion to $3.155 billion	$3.23 billion to $3.24 billion	+$75-105 million (midpoint +$90M)	Raised
Non-GAAP EPS	FY2025	$0.76 to $0.80	$0.82 to $0.84	+$0.04-0.06 (midpoint +$0.05)	Raised
Adjusted EBITDA	FY2025	$370 million to $390 million	$415 million to $425 million	+$25-55 million (midpoint +$40M)	Raised

Segment KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
CoStar	$0.277B	+7.8%
Information Services	$0.041B	+25.2%
Multifamily	$0.303B	+11.4%
LoopNet	$0.079B	+11.8%
Residential	$0.055B	+98.2%
Other Revenues	$0.078B	+141.8%

Other KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
North America	$0.769B	+16.8%
International	$0.065B	+87.5%
Net New Bookings	$84 million	—
Net New Bookings YoY Growth	92%	—
Homes.com Members	26,000	—
Homes.com Members YoY Growth	150%	—
Homes.com Network Monthly Unique Visitors	115 million	—
Commercial Information & Marketplace Profit Margin	47%	—
Adjusted EBITDA	$115 million	—
Adjusted EBITDA YoY Growth	51%	—

Management tone

Narrative arc: Homes.com experiment → unit-economics proof → scale validation → bookings compounding

Three quarters ago Homes.com was a cash-burning bet; last quarter the unit economics flipped (NPS 3→38, 6,300 members added); this quarter the model is compounding faster than the salesforce can absorb. Members went from 6,300 added in Q2 to 26,000 total at +150% YoY, and Homes.com revenue nearly doubled. Andy's framing on the call — "consistent growth in bookings is still being achieved" despite "unprecedented headcount growth with classes of 100+ people arriving simultaneously" — and the deliberate decision to cap salesforce expansion to let onboarding catch up signals management is now constraining supply, not demand. This is the opposite tone of the spend-to-grow posture that defined 2023-2024.

The cost framing inverted. Last quarter Homes.com investment was the headline drag; this quarter Andy told BofA that 2026 Homes.com spend will be "same or lower" with the 50% AI software allocation explicitly a reallocation of existing resources, not net new spend. EBITDA guidance moving up 10.5% on a revenue raise of 2.9% confirms the math. The shift from "we're investing through" to "the curve has bent" is the single most important tonal change of the quarter.

Acquisition narrative shifted from closing mechanics to integration execution. Last quarter Domain was "expected to close in Q3" and Matterport was a platform infrastructure story; this quarter Andy led with "we are hard at work integrating our two recent acquisitions of Domain and Matterport across CoStar." The hedge-free language on the print is paired with deliberate acknowledgment in Q&A of integration complexity — a more sober posture than the triumphal Domain framing of Q2 calls.

The growth rate trajectory itself is the signal. Revenue YoY went 15.3% (Q2) → 20.4% (Q3 actual) → ~25% (Q4 guide). Companies guiding sequentially accelerating YoY growth into the back half of the year are rare, and CoStar did it while raising EBITDA disproportionately. Management's confidence in Q&A — Andy and Chris repeatedly pointing to sales-force productivity still ramping from Q1-Q2 hires — telegraphs that 2026 has further to run before headcount math normalizes.

Risks management surfaced:

Forward-looking statements involve many risks, uncertainties, assumptions, estimates, and other factors that can cause actual results to differ materially

Q&A highlights

Pete Christensen · Citi

Asked about sequential booking trends, seasonal behaviors, and whether agents are canceling and planning to return later, with specific focus on residential side versus apartments business seasonality.

Andy noted that apartments.com has seasonality around NAA event in prior quarter and expects limited seasonality from residential agents at year-end. However, homes.com sales production shows a very linear upward trajectory with only Saturday/Sunday seasonality, suggesting no material seasonality yet. He expects potential Christmas holiday impact but none evident currently.

Sequential booking change in Q3 was 10% down, comparing to historical 15% (excluding COVID)NAA event drives unusually large Q2 salesHomes.com sales line shows linear progression with only weekend seasonalityPeak residential agent season is spring selling season

Stephen Sheldon · William Blair

Requested detailed sequential booking trends for CoStar, Apartments.com, and LoopNet, and outlook for Q4 bookings trajectory given larger sales force and productivity ramp.

Chris and Andy highlighted that full-year guidance reflects strong bookings trajectory and that homes.com bookings grew 53% sequentially Q2-Q3. CoStar re-accelerating positively, LoopNet performing as discussed, Apartments.com trends in line with expectations. They emphasized that expanded sales force came in Q1-Q2, so productivity still ramping. Sequential trends support increased full-year guidance.

Homes.com bookings up 53% sequentially Q2 to Q3CoStar showing re-accelerationApartments.com trends as expected and modeledSales force expansion ramping, with productivity gains still to come

Ryan Tomasello · KBW

Asked for specific apartments.com bookings number for Q3 (versus $45M in Q2), and questioned why Q4 apartments guidance shows 11-12% growth (unchanged from Q3) despite sales force ramp and demand trends.

Chris explained that Q2 is historically the largest quarter for apartments due to NAA seasonality, while Q3 and Q4 are relatively similar, though Q4 can see uptick. Growth is solid with rooftop expansion continuing. Noted improvement across all property size segments (1-49, 50-99, 100+) with growth at or above last 4-5 quarters' levels. Did not explicitly disclose Q3 apartments bookings number.

Q2 historically largest apartments quarterQ3 and Q4 typically similar, potential Q4 uptickGrowth across all property size segments (1-49, 50-99, 100+)Growth at or above prior 4-5 quarters

Curtis Nagel · Bank of America

Asked where homes.com is redirecting resources to support 50% of software development going into AI, and how to think about homes.com total expenses for 2026.

Andy clarified that the 50% allocation to AI is a reallocation of existing resources with no increase in total spend. It reflects management's prioritization of AI features. For 2026, Andy indicated same or lower spend on homes.com investment, with increased salesforce costs already baked in from 2025 headcount expansion, but no other material cost increases anticipated.

50% of homes.com software development allocated to AI featuresReallocation of existing resources, not new spending2026 homes.com investment expected at same or lower spend levelsIncreased salesforce costs from 2025 expansion already included in guidance

Brett Huff · Evercore ISI (Stevens)

Requested unpacking of homes.com bookings number, asking about rep productivity trends for new hires, ramp timeline, and any pricing adjustments that affect bookings.

Andy acknowledged unprecedented headcount growth with classes of 100+ people arriving simultaneously, creating expected per-person productivity drops. However, consistent growth in bookings is still being achieved, indicating positive ROI on incremental salespeople. Management capped salesforce growth to allow training and onboarding to catch up. Slight pricing increase in Q3 versus prior quarter, but focus remains on penetration rather than pricing.

Homes.com experiencing unprecedented headcount growth with 100+ person classesPer-person productivity dropping as expected with large cohortsConsistent booking growth despite productivity headwinds indicates strong underlying demandSalesforce growth being capped to improve training/onboarding

Answers to last quarter's watch list

Homes.com NPS and member growth durability — Members reached 26,000 (+150% YoY), versus 6,300 added in Q2 alone; Homes.com bookings up 53% QoQ; revenue +98.2% YoY. NPS not disclosed this quarter but member growth and bookings velocity confirm Q2 was not a one-off. Status: Resolved positively

Q3 net new bookings holding above $80M — Bookings came in at $84M (+92% YoY), just above the $80M floor; the QoQ decline from $93M was 10%, better than historical 15% seasonal pattern. Demand was not pulled forward. Status: Resolved positively

Domain closing and guidance reset — Domain closed and contributed to International revenue jumping +87.5% YoY to $65M; FY revenue guide raised to $3.23-3.24B incorporating the acquisition. Management framing shifted from closing to integration execution. Status: Resolved positively

LoopNet H2 growth tracking above 10% — LoopNet hit +11.8% YoY in Q3, clearing the 10% commitment Chris made last quarter and accelerating from Q2's +8.4%. Status: Resolved positively

Matterport profitability and AI / B2B pivot — Company did not break out Matterport profitability separately. Andy referenced ongoing integration of Matterport across CoStar but no specific sales productivity figures disclosed. Status: Continue monitoring

Operating margin progression — GAAP operating margin worsened to -6.1% from -3.5% in Q2, but adjusted EBITDA margin expanded sharply (EBITDA $115M on $834M revenue = 13.8% vs. ~10.9% in Q2). Commercial Information & Marketplace margin moved from 43% to 47%. The growth-segment drag is widening on GAAP but the underlying business is leveraging clearly. Status: Resolved positively on adjusted basis; the GAAP gap reflects acquisition accounting and continued Homes.com investment.

What to watch into next quarter

Whether Q4 revenue lands at or above the $895M high end — implied YoY at midpoint is ~25%, the strongest growth rate in years; anything sub-$885M would signal salesforce productivity drag biting earlier than guided

Homes.com members trajectory: 26,000 at +150% YoY needs to compound — watch whether net additions in Q4 exceed the Q3 implied pace of ~5,000-6,000 net new members

Net new bookings Q4: a fourth consecutive quarter above $80M would establish a structural floor; below that level would suggest Q2-Q3 was salesforce-driven catch-up

Matterport disclosure: management has stopped breaking out Matterport-specific profitability or sales productivity figures — watch for explicit 2026 contribution targets when full-year guidance is initiated

Operating margin gap: GAAP at -6.1% vs adjusted EBITDA at 13.8% implies $165M of adjustments quarterly; watch whether stock comp and integration cost guidance for 2026 narrows that gap

2026 initial framing: Andy committed to Homes.com 2026 spend "same or lower" — watch the Q4 call for whether FY26 revenue guide breaches the 18-20% range, which would validate the bookings momentum is durable beyond catch-up effects

Sources

CoStar Group Q3 2025 Earnings Press Release — https://www.sec.gov/Archives/edgar/data/1057352/000105735225000116/q32025earningspressrelease.htm
CoStar Group Q3 2025 Earnings Call Q&A (transcript excerpts)
CoStar Group Q2 2025 Tapebrief

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