Leading real estate information, analytics and online marketplaces provider Costar Group has released a strong fourth quarter result reporting a net income growth of 65 per cent and a 24 per cent increase in revenue year on year (YOY).
Revenue for the year ended December 31, 2015 was $712 million, compared with $576 million for the full year of 2014.
Revenue for the fourth quarter itself also grew 24 per cent YOY to $193 million. Net income for the fourth quarter of 2015 grew to $23 million or $0.71 per diluted share.
EBITDA in the fourth quarter of 2015 increased to $55 million compared to $43 million in the fourth quarter of 2014, which represents an increase of $12 million or 29 per cent YOY.
Adjusted EBITDA (which excludes stock-based compensation and other items as defined below) was $65 million for the fourth quarter of 2015 versus $54 million in the fourth quarter of 2014, an increase of 20 per cent YOY.
CoStar Group Founder and Chief Executive Officer Andrew C. Florance says in 2015 the group focused on building the premier marketplace for renting an apartment in the United States.
“We invested aggressively during 2015 to integrate CoStar, Apartments.com and Apartment Finder in order to achieve sustainable long-term cost savings,” Florance says.
“As a result EBITDA more than doubled from the third quarter to the fourth quarter of 2015 while EBITDA margin for the fourth quarter of 2015 expanded to 29 per cent.
“We believe these strong results plainly demonstrate that we are on target to achieve our goal of $1 billion in revenue and 40 per cent margin exiting 2018.”
According to United States analytics company ComScore, Apartments.com attracted more visitor traffic in 2015 than any other apartment rental website.
Revenue from Apartments.com was up approximately 30 per cent year on year in the fourth quarter.
“In 2015 we added $136 million of overall revenue and $100 million of net new annual subscriptions sales, Florance says.
“In the fourth quarter of 2015 alone, the CoStar Group generated $29 million of net new sales on annual subscriptions, a 69 per cent year-over-year increase.”
Outlook for 2016
CoStar Group Chief Financial Officer Scott Wheeler says the group’s investments in Apartments.com and Apartment Finder in 2015 provide a strong platform for future revenue growth.
“We expect the success of our integration and cost management efforts will deliver continued profit improvements in 2016,” Wheeler says.
“The group expects revenue of approximately $196 million to $198 million for the first quarter of 2016 and approximately $830 million to $840 million for the full year 2016.”
For the first quarter of 2016, the group expects net income per diluted share of approximately $0.66 to $0.70.
"In order to increase customer awareness and engagement ahead of the spring rental season, we’ve increased marketing for Apartments.com compared to fourth quarter 2015,” Wheeler adds.
“Therefore the first quarter 2016 will reflect those expenses.
“For the full year of 2016, the group expects net income per diluted share in a range of approximately $3.62 to $3.72, an increase of approximately 80 per cent at the mid-point over 2015.”