CSGP · Q3 2025 Earnings

Q: Asked about sequential booking changes, seasonal patterns in residential vs. apartments businesses, and whether agents are canceling plans to return later

Andy noted apartments.com has seasonal patterns tied to NAA event, but homes.com is showing linear sales progression with minimal seasonality so far beyond weekends. Expects potential holiday impact but not yet seeing it.

Q: Requested sequential booking detail by business (CoStar, Apartments.com, LoopNet) and outlook for Q4 bookings with expanded sales force

Chris and Andy highlighted homes.com bookings up 53% Q2-Q3, CoStar showing re-acceleration, LoopNet on track, and apartments.com as modeled. Productivity ramp continues from sales force expansion in H1 2025.

Q: Asked for apartments.com sequential bookings vs. Q2 level and clarification on Q4 guidance of 11-12% growth despite sales force ramp

Chris explained seasonality patterns with Q2 being largest, Q3-Q4 similar (though Q4 may uptick), and noted growth across all property size segments. Acknowledged FTC lawsuit impact.

Q: Asked where the 50% AI software investment reallocation is coming from and outlook for homes.com total expenses in 2026

Andy confirmed 50% AI allocation is within existing homes.com software development budget, not incremental spend. Anticipates same or lower homes.com investment in 2026 compared to 2025, with no material cost increases beyond already-included sales force expansion.

Q: Requested unpacking of homes.com bookings number, specifically rep productivity trends, ramp progress on newer salespeople, and any pricing adjustments

Andy described unprecedented headcount growth with classes of 100+ incoming, creating expected per-person productivity drop but still seeing consistent booking growth and positive ROI per rep. Slight pricing increase Q-o-Q but focus remains on penetration, with sales growth pace moderated to allow training/onboarding.

Bullish

CoStar Group

Reported October 28, 2025

30-second summary

Revenue grew 20.4% YoY to $834M, blowing past the prior $800-805M guide, with adjusted EBITDA of $115M crushing the $75-85M guide by $30M+. Management raised FY2025 revenue guidance by $90M at the midpoint to $3.235B (~18% YoY vs. prior ~15%) and adjusted EBITDA by $40M to $420M midpoint, while Q4 implied growth of ~25% YoY is a sequential acceleration from Q3's 20.4%. The Homes.com story is intact — members up ~150% YoY to 26,000+ with 7,000 added in Q3 — but Q&A revealed management is deliberately moderating sales hiring pace to absorb training capacity, the new constraint to watch.

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

Company significantly beat Q3 guidance across revenue, EPS, and EBITDA, and raised full-year FY2025 guidance substantially

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
Revenue YoY Growth	Q3 FY2025	approximately 16% year-over-year at the midpoint	20.4%	+4.4 percentage points above guide	Beat
Non-GAAP EPS	Q3 FY2025	$0.15 to $0.17	$0.23	+$0.06 above high end of guide	Beat
Adjusted EBITDA	Q3 FY2025	$75 million to $85 million	$115 million	+$30 million above high end of guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q4 FY2025	$885 million to $895 million	—
Revenue YoY Growth	Q4 FY2025	approximately 25% year-over-year at the midpoint	approximately 25% year-over-year 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	+$75-85 million at midpoint	Raised
Revenue YoY Growth	FY2025	approximately 15% year-over-year at the midpoint	approximately 18% year-over-year at the midpoint	+3 percentage points	Raised
Non-GAAP EPS	FY2025	$0.76 to $0.80	$0.82 to $0.84	+$0.02-04	Raised
Adjusted EBITDA	FY2025	$370 million to $390 million	$415 million to $425 million	+$35 million at midpoint	Raised

Segment KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
CoStar	$0.277B	+7.9%
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	+16.9%
International	$0.065B	+87.5%
Net New Bookings	$84 million	—
Homes Members	26,000+	—
Homes Members Growth YoY	~150%	—
Members Added in Q3	7,000	—
Community Boost Units Sold	3,300	—
Homes.com Network Average Monthly Unique Visitors	115 million	—
Adjusted EBITDA	$115 million	—
Commercial Information & Marketplace Businesses Profit Margin	47%	—

Management tone

Narrative arc: Homes.com unit-economics proof (Q2) → Homes.com sales-engine scaling (Q3).

Q2 marked the moment Homes.com unit economics flipped from theoretical to proven (NPS 38, cancellation <1%). Q3 shifts the conversation to sales engine capacity. Andy described "unprecedented headcount growth with classes of 100+ incoming" and explicitly acknowledged management has "moderated the sales growth pace to allow training/onboarding" — the constraint is no longer demand or product, it's the company's own ability to absorb hiring. This is a higher-quality problem than Q2's, but it caps near-term productivity per rep and is the reason Q4 apartments.com guide implies 11-12% growth despite the expanded sales force.

The AI investment framing matured from strategic priority to operating-budget reallocation. Andy confirmed in Q&A that 50% of homes.com software development is now allocated to AI but emphasized this is reallocation within the existing software budget — "no increase in total homes.com software spend" and 2026 investment is expected "same or lower" vs. 2025. Last quarter's "agentic AI-first operating model" language sounded like an ambition; this quarter management is quietly telling the Street it won't cost incremental margin. That's a meaningful margin-model anchor.

Q3 bookings of $84M came in below Q2's $93M, and management got out ahead of it: Pete Christensen flagged sequential bookings down 10% vs. a historical 15% drop (ex-COVID), and Chris framed Q3 as in-line with normal seasonality (Q2 always largest, Q3-Q4 similar, with apartments.com tied to the NAA event). The 53% Q2-to-Q3 jump in Homes.com bookings is the offset that lets management sound calm. The signal: management is comfortable enough with the underlying trajectory to call out seasonality directly rather than mask it.

LoopNet's Q2 commitment was "exceeds 10% in H2"; Q3 delivered 11.8%, validating Chris's structural-tailwind thesis rather than cyclical CRE rebound. Management's Q3 framing remained consistent with Q2 — no walk-back, no excuses around CRE conditions.

Risks management surfaced:

Forward-looking statements involve many risks, uncertainties, assumptions, estimates, and other factors that can cause actual results to differ materiallyRisk factors detailed in SEC filings (10-K, 10-Q)

Q&A highlights

Pete Christensen · Citi

Asked about sequential booking changes, seasonal patterns in residential vs. apartments businesses, and whether agents are canceling plans to return later

Andy noted apartments.com has seasonal patterns tied to NAA event, but homes.com is showing linear sales progression with minimal seasonality so far beyond weekends. Expects potential holiday impact but not yet seeing it.

Sequential booking change down 10% this quarter vs. historical 15% (excluding COVID)Homes.com sales production showing 'very linear line' with only Saturday/Sunday seasonalityNAA event drives Q2 spike in apartments.com bookingsSpring selling season is agents' peak season

Stephen Sheldon · William Blair

Requested sequential booking detail by business (CoStar, Apartments.com, LoopNet) and outlook for Q4 bookings with expanded sales force

Chris and Andy highlighted homes.com bookings up 53% Q2-Q3, CoStar showing re-acceleration, LoopNet on track, and apartments.com as modeled. Productivity ramp continues from sales force expansion in H1 2025.

Homes.com bookings up 53% Q2 to Q3CoStar bookings re-acceleratingSales force expanded in Q1-Q2, productivity ramp underwayQ4 guidance increased reflecting strong underlying trends

Ryan Tomasello · KBW

Asked for apartments.com sequential bookings vs. Q2 level and clarification on Q4 guidance of 11-12% growth despite sales force ramp

Chris explained seasonality patterns with Q2 being largest, Q3-Q4 similar (though Q4 may uptick), and noted growth across all property size segments. Acknowledged FTC lawsuit impact.

Historical seasonality: Q2 largest, Q3-Q4 relatively similarGrowth seen across 1-49, 50-99, and 100+ unit segmentsGrowth rates at or above last 4-5 quarter levels11-12% Q4 guidance reflects modeled seasonal patterns

Curtis Nagel · Bank of America

Asked where the 50% AI software investment reallocation is coming from and outlook for homes.com total expenses in 2026

Andy confirmed 50% AI allocation is within existing homes.com software development budget, not incremental spend. Anticipates same or lower homes.com investment in 2026 compared to 2025, with no material cost increases beyond already-included sales force expansion.

50% of homes.com software development allocated to AI—reallocation of existing resourcesNo increase in total homes.com software spend2026 homes.com investment expected to be same or lower vs. 2025No material cost increases beyond existing sales force headcount

Brett Huff · Stevens

Requested unpacking of homes.com bookings number, specifically rep productivity trends, ramp progress on newer salespeople, and any pricing adjustments

Andy described unprecedented headcount growth with classes of 100+ incoming, creating expected per-person productivity drop but still seeing consistent booking growth and positive ROI per rep. Slight pricing increase Q-o-Q but focus remains on penetration, with sales growth pace moderated to allow training/onboarding.

Homes.com experiencing unprecedented headcount growth (classes of 100+ simultaneously)Consistent bookings growth despite per-person productivity expected to declinePositive ROI per incremental salespersonSlight Q-o-Q pricing increase; focus on penetration over price

Answers to last quarter's watch list

Homes.com NPS holding above 38 and member growth sustaining a double-digit sequential pace — Members reached 26,000+ (+~150% YoY) with 7,000 added in Q3 vs. 6,300 in Q2, sustaining double-digit sequential pace. Bookings up 53% Q2-to-Q3. Management did not disclose updated NPS this quarter.

Resolved positively

Q3 net new bookings holding above $80M — Net new bookings came in at $84M, above the $80M threshold but below Q2's $93M peak. Management explicitly framed the sequential drop as better than the historical ex-COVID seasonal pattern.

Resolved positively

Domain closing mechanics and guidance reset — Domain contribution shows up in "Other Revenues" growth (+141.8% YoY) and the International segment (+87.5% YoY to $65M). The FY guidance raise includes Domain. Specifics on the A$2.3B incremental investment economics weren't broken out on the print.

Continue monitoring

LoopNet H2 growth above 10% — LoopNet revenue grew 11.8% YoY, accelerating from Q2's 8.4% and clearing the >10% H2 commitment.

Resolved positively

Matterport profitability trajectory and B2B/agentic AI pivot — No specific Matterport profitability disclosure on the print. The 50% AI allocation discussion (within existing budget) is the closest signal.

Not resolved

Operating margin progression closing the gap to Commercial brands margin — Operating margin worsened to -6.1% from Q2's -3.5%, while Commercial Information & Marketplace margin improved to 47% from 43%. The gap widened, not narrowed. Adjusted EBITDA, however, expanded to $115M from $85M — the GAAP-to-adjusted gap is widening as growth-segment investment continues.

Resolved negatively

What to watch into next quarter

Whether Q4 revenue lands at or above $895M (the high end), confirming the ~25% YoY guide isn't a stretch — and whether the implied acceleration carries into Q1 2026 commentary

Q4 net new bookings trajectory: with the moderated sales hiring pace cited by Andy, watch whether bookings hold above $80M or fade as headcount additions slow

Homes.com member adds in Q4: the 7,000 Q3 figure needs to hold or grow despite Andy's "potential holiday impact" caveat; a drop below 5,000 would signal the linear-growth narrative is breaking

2026 homes.com investment guide: Andy committed to "same or lower" vs. 2025 — any walk-back on the Q4 call would invalidate the margin-model anchor

LoopNet sustaining above 11% growth and Spain/France launches showing measurable revenue contribution

Operating margin gap to adjusted EBITDA: -6.1% GAAP vs. $115M adjusted EBITDA is a $180M+ gap; whether this narrows as Homes.com salesforce ramp annualizes will define the 2026 GAAP profitability story

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 (analyst exchanges as documented)

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