CoStar Group Q1 Results: Homes.com Drives 12% Year-on-Year Revenue Growth to $656 Million

CoStar Group has released strong financial results in the same week that it announced its intention to acquire Matterport for $1.6 billion.

Highlights include:

• Monetization of Homes.com accelerates net sales by a further $39 million, to a quarterly record of $86 million
• YoY quarterly revenue increased 12% to $656 million
• Net income dropped from $87 million in Q1 2023 to $7 million in Q1 2024
• EBITDA fell from $98 million in 2023 to an EBITDA loss of $13 million in 2024
• CoStar Group expects revenue in the range of $2.76 billion to $2.77 billion for the full year of 2024

Andy Florance, Founder and CEO of CoStar Group, said:

"CoStar Group delivered exceptional revenue, sales and marketplace traffic results in the first quarter of 2024, fueled by the launch of our monetization of Homes.com on February 12th of this year.

"With less than two months of selling in the first quarter, Homes.com membership subscriptions reached nearly $40 million in net new bookings. This is by far the strongest sales launch of any product in the company’s history, and we are raising our sales and revenue forecast for Homes.com for the full year 2024.

"We believe that Homes.com is now one of two most heavily trafficked residential marketplace portals in the U.S. Our aggressive marketing campaign successfully catapulted our unaided awareness from 4% in the fourth quarter of 2023 to 24% by the end of March 2024.

"Both Apartments.com and CoStar crossed $250 million of revenue in the first quarter to become our first and second businesses to reach $1 billion in annualized run rate revenue."

As always, CoStar continues to impress with strong performance across the board and its ability to increase revenue quarter-by-quarter, every quarter.

Homes.com was a big part of that, after explosive traffic growth strapped a rocketship to net sales, generating almost half of the Group's record-breaking quarterly sales.

The caveats to Q1 2024's EBITDA losses and dampened net income are embedded in two major investments in recent months: one, the acquisition of OnTheMarket for an estimated $100 million in December 2024 and, two, a significant increase in marketing spend—which grew by a further $100 million compared to the same period in 2023.

Meanwhile, there will certainly be a major hit to accounts when the Matterport deal goes through later this year—but this will ultimately not make a major dent in CoStar's plans given its sizeable cash reserves and continued revenue growth.