CoStar Group sees great growth in second quarter

CoStar Group, Inc., a leading provider of commercial real estate information, analytics and online marketplaces, announced that revenue for the quarter ended June 30, 2019, was $344 million, an increase of 16% over revenue of $297 million for the second quarter of 2018. Net income for the second quarter of 2019 was $63 million, an increase of 44% over net income of $44 million for the second quarter of 2018.

EBITDA for the second quarter of 2019 was $94 million, an increase of 45% versus EBITDA of $64 million for the second quarter of 2018. Adjusted EBITDA (which excludes stock-based compensation, acquisition and integration related costs and other items as described below) for the second quarter of 2019 was $110 million, an increase of 29% compared to adjusted EBITDA of $85 million for the second quarter of 2018.

“We achieved one of our best financial quarters in our history,” said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “We generated our highest company-wide net new bookings with $59 million in the second quarter, an increase of 32% year-over-year. Apartments.com is showing exceptional momentum, with second quarter sales bookings surging 122% year-over-year. Apartments.com achieved record sales bookings in the fourth quarter of 2018, then beat that record again in the first quarter of 2019, and now has beaten the record yet again with second quarter 2019 bookings soaring 44% over the first quarter. CoStar Group profitability continues to be exceptional with year-over-year growth in net income of 44% in the second quarter of 2019. Given our very strong results in the first half of 2019, we plan to raise the level of marketing investment in Apartments.com in the second half of 2019 accelerating the rate at which we are capturing market share.”

Florance continued, “Our Apartments.com network continued to expand its leadership position in traffic in the second quarter of 2019 with our highest level ever of unique visitors and visits according to ComScore. Company-wide results were strong as well achieving 52 million unique visitors to our platform in the second quarter of 2019.”

“For CoStar Group, 82% of our revenue is highly visible subscription-based revenue with high renewal rates,” said Florance. “Our second quarter 2019 trailing 12-month subscription revenue grew 25% year-over-year compared to second quarter of 2018.”

As of June 30, 2019, the Company had approximately $1.3 billion in cash, cash equivalents and long-term investments, and no outstanding debt.

Non-GAAP net income for the second quarter of 2019 (which excludes amortization of acquired intangible assets, stock-based compensation and other items as described below) was $82 million or $2.23 per diluted share, an increase of $21 million or 35% versus the second quarter of 2018.

2019 Outlook

The Company is raising its revenue guidance to a range of $1.382 billion to $1.390 billion for the full year of 2019, an increase of $11 million at the midpoint of the range compared to the prior outlook. We expect revenue for the third quarter of 2019 in the range of $350 million to $354 million, representing revenue growth of 15% over the third quarter of 2018 at the midpoint of the range.

The Company is raising its adjusted EBITDA guidance to a range of $498 million to $505 million for the full year of 2019. For the third quarter of 2019, the Company expects adjusted EBITDA in a range of $123 million to $127 million.

We are raising our full-year 2019 non-GAAP net income per diluted share guidance to a range of $10.00 to $10.14, based on 36.6 million shares. For the third quarter of 2019, we expect non-GAAP net income per diluted share in a range of $2.44 to $2.52 based on 36.6 million shares. These ranges include a non-GAAP tax rate of 25%.

The preceding forward-looking statements reflect CoStar Group’s expectations as of July 23, 2019, including forward-looking non-GAAP financial measures on a consolidated basis. Given the risk factors, uncertainties and assumptions discussed above, actual results may differ materially. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.

Reconciliation of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share and all of the disclosed non-GAAP financial measures to their GAAP basis results are shown in detail below, along with definitions for those terms. A reconciliation of forward-looking non-GAAP guidance to the most directly comparable GAAP measure, net income, can be found within the tables included in this release.

Non-GAAP Financial Measures

For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Company’s financial condition and results of operations, please refer to the Company’s latest periodic report.

EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before interest and other income (expense), loss on debt extinguishment, income taxes, depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before stock-based compensation expense, acquisition- and integration-related costs, restructuring costs and settlements and impairments incurred outside the Company’s normal course of business.

Non-GAAP net income is a non-GAAP financial measure determined by adjusting GAAP net income attributable to CoStar Group for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside the Company's normal course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes. In 2019, the Company is assuming a 25% tax rate in order to approximate our statutory corporate tax rate excluding the impact of discrete items.

Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share. For periods with GAAP net losses and non-GAAP net income, the weighted average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.

Read the rest of the report here.

SOURCE CoStart Group, Inc.

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