COSTAR GROUP, INC. Q4 FY2024 earnings call

• Revenue growth: 2024 full year revenue $2.74 billion, up 11% y-o-y; Q4 2024 revenue $709 million, up 11% y-o-y.
• Segment details: CoStar product grew 10% y-o-y to $1.02 billion in 2024; Apartments.com had strong Q4 with $276 million revenue, over 75,000 paying apartment communities; LoopNet is shifting to asset-based pricing; Homes.com grew with 110 million average monthly unique visitors in Q4 2024, sales force expanded to 277 and aiming for 500 by end-2025; CoStar Suite continues growth with high NPS scores and strong renewal rates.
• Product innovations: CoStar launched lender and hospitality benchmarking; Homes.com added over 110 new features in 2024; integration of STR into CoStar platform.
• Sales force: Planning to grow sales force from 1,390 to 1,890 by end-2025, with significant growth in Homes.com sales team.

CoStar product achieved $1.02 billion in revenue in 2024 with a 10% year-over-year growth. Apartments.com had Q4 2024 revenue of $276 million, and 2024 revenue was $920 million. LoopNet had 2024 revenue growth of 6% and Q4 growth of 5%. Revenue from information services was $136 million in 2024 ($37 million in Q4), and other marketplaces had $130 million in 2024 ($36 million in Q4). Residential revenue was $101 million in 2024 ($28 million in Q4). CoStar's revenue contribution is significant, Apartments.com has strong growth in properties and revenue, LoopNet is shifting to asset-based pricing, etc.

• 2025 full year revenue expected $2.985 billion - $3.015 billion, 9-10% growth; first quarter 2025 revenue $711 million - $716 million, 9% y-o-y growth midpoint.
• 2025 adjusted EBITDA expected $375 million - $405 million, margin ~13%; first quarter 2025 adjusted EBITDA $25 million - $35 million.
• Announced $500 million share buyback program, executing $150 million annually.
• Expect Apartments.com revenue growth 11-12% in 2025, 11% in Q1; LoopNet revenue growth mid-single digits in 2025; Information Services revenue growth 18-20% in 2025; other marketplaces mid to high single-digit growth in 2025.

• FTC review of CoStar's pending Matterport acquisition.
• Competitive challenges in residential real estate market, e.g., Redfin's deal with Zillow affecting Rent.com.
• Impact of high interest rates and economic volatility on commercial real estate lending and transactions.
• Market volatility in commercial real estate affecting revenue and growth projections.

Q: John Campbell asked about international expansion and when it might impact the P&L.

A: Andrew Florance said they're making steady progress in Europe, rationalizing operations, France to launch in 2025, Spain to follow, moving marketplaces to LoopNet, no massive P&L hit expected in 2025.

Q: Pete Christiansen asked about Apartments.com guide, mix of property growth and pricing.

A: Christian Lown said more unit growth expected in 2025 than price increase, significant TAM opportunity in 1-19 unit buildings, mid-market sales team productivity improved.

Q: Ryan Tomasello asked about margins and Homes.com timeline.

A: Christian Lown said commercial margins expected to improve 1-2% y-o-y, Homes.com momentum to build in 2025 as sales force ramps up and cancellations abate.

Q: Alexei Gogolev asked about Homes.com spend and international expansion.

A: Christian Lown said 2025 spend similar to 2024, U.K. residential expansion to harvest growth, headcount growth in sales shifting spend to revenue generation.

Q: Stephen Sheldon asked about LoopNet revenue growth and net new bookings.

A: Andrew Florance said early signs of asset-based pricing shift positive, Christian Lown said feel good about first quarter guidance but not giving net new bookings guidance.

Q: Jeff Meuler asked about Apartments.com win rates.

A: Christian Lown said Apartments.com has large TAM, 94% NPS, strong renewal rates, mid-market sales force expanding to penetrate TAM.