Costar Grows Revenues 13% In Q1 as It Weighs up How to Spend $5.1 Billion M&A War Chest

April 26, 2023
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The U.S. real estate data giant and portal operator CoStar has released a report on its performance for the first quarter of the 2023 financial year. Headline figures from the Washington-based company's operations for the period ended 31st of March include:

  • Revenue grew 13% year-on-year rising to $584 million.
  • EBITDA fell 38% to $98 million with Net income at $87 million.
  • The Multifamily rentals segment saw 20% revenue growth rising to $211 million.

Having been founded by CEO, Andy Florance in 1987 CoStar has gone on to become one of the largest real estate companies in the world and is the largest player in the U.S. in terms of commercial property data and marketplaces. The company reports six business segments which are:

  • CoStar - The company's eponymous suite of digital commercial real estate data insights and analytics products and services.
  • Information Services - A suite of data and analytics products servicing the hotel, lender and asset management sectors.
  • Loopnet - The leading online marketplace for commercial real estate in the United States.
  • Multifamily - CoStar's many apartment rental portals (including and
  • Residential - Since 2021 CoStar has broken out its nascent residential sales portal and others into their own segment.
  • Other Marketplaces - This includes the company's online auctions platform, Ten-X as well as several other online marketplaces.

The outstanding performer in Q1 was the Multifamily segment which saw 20% revenue growth on the back of significant demand for advertising in the rentals sector.

CoStar's multifamily business saw a 110% increase in net new bookings over the prior year but Florance mentioned in a call with investors that the company still sees room for growth.

" while very successful has millions of apartments that do not yet advertise on the site. We are focused on continuing to grow our sales force to reach this huge potential untapped audience."

Elsewhere CoStar's charge in residential real estate gathered pace with the growth of's traffic progressing well. The platform, which was bought for $156 million in 2021 and is expected to eventually rival Zillow, reached 27 million unique monthly users in March. The company stated that the medium-term goal is 50 million which would see the portal sit between Redfin and in a ranking of traffic.

“We are very pleased with the progress we are making building the new When we acquired in May of 2021, the site had six million unique visitors according to Google Analytics,” said Florance.

There was recent controversy around how one of the methods's team used to gain traffic. Earlier this month the portal was accused of using agents' names and profiles in traffic acquisition campaigns without their knowledge or consent.

CoStar has high hopes for which Florance believes will become " the best online residential marketplace in the world bar none". For now, the portal retains a legacy business model and does not generate substantial income. Florance stated that the plan is to start to ramp up monetization via the much-touted 'your money, your lead' model in the later part of the year.

There may be more exciting news for CoStar as Florance confirmed to investors that the company is actively evaluating M&A opportunities again having decided against a $3 billion deal to acquire in February.

The CEO said that the task of evaluating ways to spend the $5.1 billion CoStar has in cash is currently taking up "60 to 70%" of his time and confirmed that the company is looking at European as well as North American targets.

April 26, 2023
Edmund got to know the world of portals and marketplaces working at Mitula Group (which became Lifull Connect after the buyout in 2018). He worked directly with hundreds of portals across the world in his role in the content department for three and a half years before transferring to the SEO department to understand the inner workings of listings sites. He joined Online Marketplaces as Head of Content in March 2020.

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