CoStar, the US commercial real estate giant with designs on the residential sector, has released an encouraging set of results for Q1 of 2021. The Washington-based company saw revenue up 17% on a year-on-year basis to $492M while EBITDA was up by 35% to $136M.
CoStar had built up quite the reputation over the last few years for being a profit machine, and today's Q1 results see the firm get back on track in that regard after a pandemic hit 2020. The company's share price, like many online marketplace stocks, saw a steady rise from the depths of March 2020 and may well reach and exceed all-time highs of $939 this week on the back of yesterday's Q1 results.
Aside from its original commercial real estate data business, CoStar owns and operates online marketplace business in the commercial as well as residential sectors. Q1 saw an extra $52M in net new bookings across all sectors of the company representing a rise of 10% year-on-year. The company's data and analytics arm may have been thwarted in its attempts to buy CoreLogic earlier in the year but bookings were back at pre-pandemic levels according to CEO Andy Florance, with an international version of CoStar Suite soon to be launched.
CoStar's marketplace businesses, which include commercial portal LoopNet, foreclosure specialist portal TenX as well as Apartments.com and the recently acquired Homesnap in the residential sector, also saw strong quarterly results. Florance was keen to highlight the performance of Homesnap in particular on an earnings call:
“The business performed well in the first quarter of 2021, growing pro forma revenue by over 40% year-over-year as paid subscribers more than doubled and subscription revenue grew by 68%.”
Florance also said that the company appears "to be moving past the pandemic disruption", and CoStar took the opportunity of its sanguine Q1 performance to upgrade its revenue guidance for the rest of the year to a new range of $1.930 billion to $1.945 billion which would represent year-on-year growth of around 17%.
A fit and healthy CoStar will mean extra competition for current US residential market leader Zillow. CoStar has made no secret of its desire to move into the residential sector and with the recent acquisitions of Homes.com and Homesnap the company is very much putting its money where its mouth is.