CoStar Group Continues Double Digit Revenue Growth Streak in Q3 as It Prepares for Residential Portal Battle on Both Sides of the Atlantic

October 25, 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 third quarter of the 2023 financial year. Headline figures from the Washington-based company's operations for the period include:

  • Revenue grew 12% year-on-year, rising to $625 million.
  • EBITDA fell by 31% to $89 million but Non-GAAP net income was up at $112 million.
  • The Multifamily rentals segment saw 24% revenue growth, rising to $235 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 auction platform, Ten-X as well as several other online marketplaces.

CoStar Group's commercial real estate businesses continue to drive the company's impressive quarterly double-digit revenue growth. Florance pointed out in comments accompanying the release that annualized adjusted EBITDA for his company's commercial information and marketplace businesses is approaching $1 billion.

While CoStar's older business segments continue to deliver, the firm is able to invest more and more into its big residential play. CoStar said it will continue to invest aggressively but prudently into as it seeks to unseat Zillow as the incumbent market leader in residential real estate marketing.

Recently CoStar has been on a PR charge touting the traffic figures of and Florance again made claims about the portal's figures relative to its competitors'.

“Our key competitors' sites combine rentals and resale homes, so when we likewise combine our and Apartments networks we had 140 million unique visitors in September, according to Google Analytics. In the past year we have quickly grown to become the second most heavily trafficked residential network by a wide margin, with monthly unique visitors 35% higher than and 90% higher than Redfin in September, according to ComScore. We continue to build out the full potential of and are focused on continuing to grow traffic and beginning monetization in second quarter of 2024.”

Although third-party traffic stats are notoriously tough to verify and's position on the portal pyramid is hotly debated (U.S. realtor facing publication, Inman produced an analysis of CoStar's figures), there is consensus that the portal has seen significant traffic growth in recent months.

CoStar's Q3 was also notable for an interview given by Andy Florance on stage at Property Portal Watch in which the CoStar boss told Online Marketplaces' Chairman, Simon Baker that CoStar was looking to spend some of its "nine billion dollar war chest" on acquisitions in the European residential portal space.

Two weeks later, news broke that CoStar had bid £100 million for the British number three portal OnTheMarket. Although the deal is still subject to official shareholder approval, OnTheMarket's Board and several key shareholders have expressed support for the takeover.

Addressing the prospects of a CoStar Group-backed OnTheMarket in comments accompanying the Q3 release, Florance said:

"Having operated successfully in the United Kingdom for two decades, we believe that we can grow competitive traffic share in the U.K. just as we have done so many times before in the U.S. and that our significant software investments into will give us technology scale advantage in the U.K.”

CoStar is now set to take on Zillow on one side of the Atlantic and Rightmove on the other. No small task.

October 25, 2023
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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