CoStar Lifts 2026 Profit Outlook With Activist Battle "Behind Us"

CoStar Group, the US-listed real estate data and portals giant, has reported Q1 2026 revenue of $897 million and doubled its adjusted EBITDA to $132 million. Founder and CEO Andy Florance used his first earnings call since January's activist row to move on from the issue.

The Arlington-based group also raised full-year EBITDA guidance by $30 million at the midpoint to a range of $780 million to $820 million, lifted full-year adjusted EPS guidance by $0.09, and confirmed $505 million of share buybacks completed during the quarter. Highlights include:

• Revenue of $897m, up 23% year on year, the 60th consecutive quarter of double-digit revenue growth
• Adjusted EBITDA of $132m, doubled year on year and 26% above the guidance midpoint
• Annualised net new bookings of $67m, up 20%
• Commercial revenue of $472m, up 15%; residential revenue of $425m, up 32%
• Homes.com revenue of $26m, up 58%, with 35,175 agent subscribers and 4,300 net additions in the quarter

The numbers land three months after hedge fund Third Point published an open letter calling for a board overhaul and the divestment of Homes.com, followed days later by a similar broadside from D.E. Shaw. CoStar responded with a barbed press release at the time, accusing Third Point of behaving "like a child with a board game". On Tuesday's call, Florance signalled the company now considers the row over after Third Point sold off its position.

"The activist campaign over the last year did weigh heavily on homes.com sales and potential partnerships," Florance told investors, adding that, "with the noise gone, we have more focused energy than ever to spend on what matters: growing EBITDA."

Much of the call was spent rebutting the activist critique with operational data. Citing a CoStar study of the first 11,400 Homes.com members, Florance said that members earned an average of $36,400 more in commissions in their first year as subscribers, against an average annual subscription cost of $3,400. On the strength of those figures, CoStar will raise Homes.com subscription prices for new customers from May 1st. The move sharply reverses the 30% price cut Third Point cited in its January letter as proof of weak product-market fit.

Homes.com's annual revenue run-rate hit $106 million in March, up 92% year on year. Florance also flagged an expanded partnership with eXp Realty, signed in March, which gives the brokerage's 300,000 agents the ability to display pre-market listings on the portal. The platform still trails Zillow on traffic, although CoStar pointed to Comscore data showing Zillow's unique visitors have now declined for 15 consecutive months.

In the commercial business, the flagship CoStar analytics product grew revenue 9% to $331 million, with broker sales up 29% and tenant sales up 27%. LoopNet revenue rose 16% to $85 million, helped by the full rollout of asset-based pricing across US markets in March. CoStar UK was up 25% and Canada up 22%, with launches planned in France for Q2 and in Australia in the second half. Matterport, acquired last year, contributed to an 81% jump in "other commercial" revenue to $56 million.

Apartments.com posted its 15th consecutive quarter of double-digit growth, with revenue up 10% to $312 million, although the pace has moderated as CoStar absorbs lower-ARPU rooftops won during the Rent.com bankruptcy. The platform launched its natural language search tool, SmartSearch, during the quarter, with a fuller Apartments AI rollout planned for the Apartmentalize trade show in June.

Outside the US, OnTheMarket recorded its 23rd consecutive month of positive net new bookings, signed The Connells Group, the UK's largest estate agency network, and reportedly overtook Zoopla on listing inventory. Domain Australia delivered Q1 revenue of $68 million, with monthly unique audiences averaging 8 million and listings up 28% year on year, although revenue was sequentially lower due to seasonality and the deliberate removal of low-margin third-party advertising.

CoStar reaffirmed full-year 2026 revenue guidance of $3.78 billion to $3.82 billion. Management expects residential adjusted EBITDA to turn positive in Q2 2026, the segment's first profitable quarter since the Homes.com push began.