Key Highlights

  • CSGP shares are indicated down 7.47% at $29.62 in premarket, against a prior close of $32.01.
  • Q3 revenue of $952 million rose 14%, and adjusted EPS of $0.38 beat the $0.34 consensus.
  • Adjusted EBITDA reached a record $229 million, but annualized net new bookings fell to $37 million from $84 million.
  • Full-year adjusted EBITDA guidance was raised to $820 million to $840 million.
  • CoStar will acquire Vexcel for about $730 million in cash, and the deal is not in guidance.

CoStar Group (NASDAQ:CSGP) shares are indicated down 7.47% at $29.62 in premarket after third-quarter results that mixed a profit beat with weak sales bookings. Revenue of $952 million, up 14%, edged past the $945.8 million estimate, and adjusted EPS of $0.38 topped the $0.34 consensus. Shares closed Tuesday at $32.01, down 5.01%.

CoStar, headquartered in Arlington, Virginia, provides commercial real estate information, analytics and online marketplaces, including Apartments.com, LoopNet, Homes.com, BizBuySell, Land.com and Ten-X. Founded in 1987 and led by CEO Andrew Florance, it reported 2025 revenue of $3.2 billion, up 19%.

Bookings Slump Offsets a Record Quarter for EBITDA

Adjusted EBITDA doubled to a record $229 million, a 24% margin, as operating costs fell 2% from a year earlier. Net income was $74 million.

The weak spot was demand. Annualized net new bookings dropped to $37 million from $84 million a year ago. Management pointed to economic headwinds and slow sales force growth, with about 2,000 reps, down roughly 10%. It expects the third quarter to be the bookings low, with sales force growth re-accelerating in 2027. Softness in Domain transactions and Apartments.com subscriptions also weighed.

Profit Outlook Up, Revenue Outlook Trimmed

Full-year adjusted EBITDA guidance rose to $820 million to $840 million, a 22% margin, with adjusted EPS of $1.38 to $1.41 on 405 million shares. Full-year revenue guidance of $3.75 billion to $3.77 billion is about $35 million lower excluding Zonda.

Fourth-quarter revenue is guided to $976 million to $996 million and adjusted EBITDA to $275 million to $295 million, a 29% margin at the midpoint. Apartments.com growth is assumed in the mid-single digits, and Homes.com losses are on track to stay at or below $550 million for the year.

Cost savings are running $150 million below the original 2026 expense guidance, with roughly $200 million of further efficiencies identified over the next 12 to 18 months. The 2028 adjusted EBITDA target of $1.25 billion was reaffirmed.

Vexcel Deal and Analyst Target Cuts

CoStar also announced the roughly $730 million all-cash acquisition of Vexcel, which has about $140 million of revenue growing over 30% and a roughly 20% EBITDA margin. Shares fell as much as 13% after hours on the news. The company expects to finish its $700 million 2026 buyback in the fourth quarter.

Analysts trimmed targets, with JPMorgan to $44 from $52, BTIG to $35, Baird to $32 and KBW to $30, while Needham held at $40. The 52-week range runs from $25.89 to $78.95, and the real estate sector ETF is only slightly lower.