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CoStar Group Sales Bookings Rise 32% and Net Income Rises 44%, Year-over-Year in Second Quarter; Company Raises Full-Year Revenue Guidance

Jul 23, 2019

WASHINGTON--(BUSINESS WIRE)-- CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, announced today that revenue for the quarter ended June 30, 2019, was $344 million, an increase of 16% over revenue of $297 million for the second quarter of 2018. Net income for the second quarter of 2019 was $63 million, an increase of 44% over net income of $44 million for the second quarter of 2018.

EBITDA for the second quarter of 2019 was $94 million, an increase of 45% versus EBITDA of $64 million for the second quarter of 2018. Adjusted EBITDA (which excludes stock-based compensation, acquisition and integration related costs and other items as described below) for the second quarter of 2019 was $110 million, an increase of 29% compared to adjusted EBITDA of $85 million for the second quarter of 2018.

“We achieved one of our best financial quarters in our history,” said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “We generated our highest company-wide net new bookings with $59 million in the second quarter, an increase of 32% year-over-year. Apartments.com is showing exceptional momentum, with second quarter sales bookings surging 122% year-over-year. Apartments.com achieved record sales bookings in the fourth quarter of 2018, then beat that record again in the first quarter of 2019, and now has beaten the record yet again with second quarter 2019 bookings soaring 44% over the first quarter. CoStar Group profitability continues to be exceptional with year-over-year growth in net income of 44% in the second quarter of 2019. Given our very strong results in the first half of 2019, we plan to raise the level of marketing investment in Apartments.com in the second half of 2019 accelerating the rate at which we are capturing market share.”

Florance continued, “Our Apartments.com network continued to expand its leadership position in traffic in the second quarter of 2019 with our highest level ever of unique visitors and visits according to ComScore. Company-wide results were strong as well achieving 52 million unique visitors to our platform in the second quarter of 2019.”

 

Year 2018-2019 Quarterly Results - Unaudited

(in millions, except per share data)

 

2018

 

2019

 

Q1

Q2

Q3

Q4

 

Q1

Q2

 

 

 

 

 

 

 

 

Revenues

$

274

 

$

297

 

$

306

 

$

316

 

 

$

328

 

$

344

 

Net income

52

 

44

 

59

 

84

 

 

85

 

63

 

Net income per share - diluted

1.44

 

1.20

 

1.61

 

2.29

 

 

2.33

 

1.73

 

Weighted average outstanding shares - diluted

36.4

 

36.5

 

36.5

 

36.5

 

 

36.6

 

36.6

 

 

 

 

 

 

 

 

 

EBITDA

70

 

64

 

91

 

125

 

 

113

 

94

 

Adjusted EBITDA

84

 

85

 

110

 

139

 

 

125

 

110

 

Non-GAAP net income

60

 

60

 

79

 

102

 

 

92

 

82

 

Non-GAAP net income per share - diluted

1.65

 

1.66

 

2.16

 

2.81

 

 

2.53

 

2.23

 

 

“For CoStar Group, 82% of our revenue is highly visible subscription-based revenue with high renewal rates,” said Florance. “Our second quarter 2019 trailing 12-month subscription revenue grew 25% year-over-year compared to second quarter of 2018.”

As of June 30, 2019, the Company had approximately $1.3 billion in cash, cash equivalents and long-term investments, and no outstanding debt.

Non-GAAP net income for the second quarter of 2019 (which excludes amortization of acquired intangible assets, stock-based compensation and other items as described below) was $82 million or $2.23 per diluted share, an increase of $21 million or 35% versus the second quarter of 2018.

2019 Outlook

The Company is raising its revenue guidance to a range of $1.382 billion to $1.390 billion for the full year of 2019, an increase of $11 million at the midpoint of the range compared to the prior outlook. We expect revenue for the third quarter of 2019 in the range of $350 million to $354 million, representing revenue growth of 15% over the third quarter of 2018 at the midpoint of the range.

The Company is raising its adjusted EBITDA guidance to a range of $498 million to $505 million for the full year of 2019. For the third quarter of 2019, the Company expects adjusted EBITDA in a range of $123 million to $127 million.

We are raising our full-year 2019 non-GAAP net income per diluted share guidance to a range of $10.00 to $10.14, based on 36.6 million shares. For the third quarter of 2019, we expect non-GAAP net income per diluted share in a range of $2.44 to $2.52 based on 36.6 million shares. These ranges include a non-GAAP tax rate of 25%.

The preceding forward-looking statements reflect CoStar Group’s expectations as of July 23, 2019, including forward-looking non-GAAP financial measures on a consolidated basis. Given the risk factors, uncertainties and assumptions discussed above, actual results may differ materially. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.

Reconciliation of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share and all of the disclosed non-GAAP financial measures to their GAAP basis results are shown in detail below, along with definitions for those terms. A reconciliation of forward-looking non-GAAP guidance to the most directly comparable GAAP measure, net income, can be found within the tables included in this release.

Non-GAAP Financial Measures

For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Company’s financial condition and results of operations, please refer to the Company’s latest periodic report.

EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before interest and other income (expense), loss on debt extinguishment, income taxes, depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before stock-based compensation expense, acquisition- and integration-related costs, restructuring costs and settlements and impairments incurred outside the Company’s normal course of business.

Non-GAAP net income is a non-GAAP financial measure determined by adjusting GAAP net income attributable to CoStar Group for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside the Company's normal course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes. In 2019, the Company is assuming a 25% tax rate in order to approximate our statutory corporate tax rate excluding the impact of discrete items.

Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share. For periods with GAAP net losses and non-GAAP net income, the weighted average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.

Earnings Conference Call

Management will conduct a conference call at 5:00 PM EDT on Tuesday, July 23, 2019 to discuss earnings results for the second quarter and the Company’s outlook. The audio portion of the conference call will be broadcast live over the Internet at investors.costargroup.com. To join the conference call by telephone, please dial (800) 230-1085 (from the United States and Canada) or (612) 332-0107 (from all other countries) and refer to conference code 469773. An audio recording of the conference call will be available for replay approximately one hour after the call's completion and will remain available for a period of time following the call. To access the recorded conference call, please dial (800) 475-6701 (from the U.S. and Canada) or (320) 365-3844 (from all other countries) using access code 469773. The webcast replay will also be available in the Investors section of CoStar Group's website for a period of time following the call.

 

CoStar Group, Inc.

Condensed Consolidated Statements of Operations - Unaudited

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

Revenues

 

$

343,760

 

 

$

297,018

 

 

$

672,185

 

 

$

570,736

 

Cost of revenues

 

71,918

 

 

67,136

 

 

143,071

 

 

129,613

 

Gross profit

 

271,842

 

 

229,882

 

 

529,114

 

 

441,123

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing (excluding customer base amortization)

 

119,075

 

 

112,965

 

 

207,169

 

 

201,455

 

Software development

 

28,455

 

 

26,271

 

 

56,383

 

 

49,184

 

General and administrative

 

42,337

 

 

38,056

 

 

82,413

 

 

78,646

 

Customer base amortization

 

7,175

 

 

8,816

 

 

14,857

 

 

14,619

 

 

 

197,042

 

 

186,108

 

 

360,822

 

 

343,904

 

 

 

 

 

 

 

 

 

 

Income from operations

 

74,800

 

 

43,774

 

 

168,292

 

 

97,219

 

Interest and other income

 

5,913

 

 

2,652

 

 

10,858

 

 

5,639

 

Interest and other expense

 

(697

)

 

(728

)

 

(1,429

)

 

(1,418

)

Income before income taxes

 

80,016

 

 

45,698

 

 

177,721

 

 

101,440

 

Income tax expense

 

16,768

 

 

1,863

 

 

29,304

 

 

5,374

 

Net income

 

$

63,248

 

 

$

43,835

 

 

$

148,417

 

 

$

96,066

 

 

 

 

 

 

 

 

 

 

Net income per share - basic

 

$

1.74

 

 

$

1.22

 

 

$

4.09

 

 

$

2.67

 

Net income per share - diluted

 

$

1.73

 

 

$

1.20

 

 

$

4.06

 

 

$

2.64

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

36,310

 

 

36,073

 

 

36,273

 

 

35,983

 

Weighted average outstanding shares - diluted

 

36,627

 

 

36,450

 

 

36,597

 

 

36,400

 

 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures - Unaudited

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

63,248

 

 

$

43,835

 

 

$

148,417

 

 

$

96,066

 

Income tax expense

 

16,768

 

 

1,863

 

 

29,304

 

 

5,374

 

Income before income taxes

 

80,016

 

 

45,698

 

 

177,721

 

 

101,440

 

Amortization of acquired intangible assets

 

12,208

 

 

14,140

 

 

25,403

 

 

24,551

 

Stock-based compensation expense

 

13,816

 

 

11,228

 

 

25,845

 

 

21,640

 

Acquisition and integration related costs

 

492

 

 

9,506

 

 

741

 

 

13,028

 

Restructuring and related costs

 

2,180

 

 

 

 

2,248

 

 

 

Non-GAAP income before income taxes

 

108,712

 

 

80,572

 

 

231,958

 

 

160,659

 

Assumed rate for income tax expense *

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(27,178

)

 

(20,143

)

 

(57,989

)

 

(40,165

)

Non-GAAP net income

 

$

81,534

 

 

$

60,429

 

 

$

173,969

 

 

$

120,494

 

 

 

 

 

 

 

 

 

 

Net income per share - diluted

 

$

1.73

 

 

$

1.20

 

 

$

4.06

 

 

$

2.64

 

Non-GAAP net income per share - diluted

 

$

2.23

 

 

$

1.66

 

 

$

4.75

 

 

$

3.31

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

36,310

 

 

36,073

 

 

36,273

 

 

35,983

 

Weighted average outstanding shares - diluted

 

36,627

 

 

36,450

 

 

36,597

 

 

36,400

 

 

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed for 2019 and 2018, which approximates our statutory corporate tax rate.

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

63,248

 

 

$

43,835

 

 

$

148,417

 

 

$

96,066

 

Amortization of acquired intangible assets in cost of revenues

 

5,033

 

 

5,324

 

 

10,546

 

 

9,932

 

Amortization of acquired intangible assets in operating expenses

 

7,175

 

 

8,816

 

 

14,857

 

 

14,619

 

Depreciation and other amortization

 

6,546

 

 

6,444

 

 

13,010

 

 

13,016

 

Interest and other income

 

(5,913

)

 

(2,652

)

 

(10,858

)

 

(5,639

)

Interest and other expense

 

697

 

 

728

 

 

1,429

 

 

1,418

 

Income tax expense

 

16,768

 

 

1,863

 

 

29,304

 

 

5,374

 

EBITDA

 

$

93,554

 

 

$

64,358

 

 

$

206,705

 

 

$

134,786

 

Stock-based compensation expense

 

13,816

 

 

11,228

 

 

25,845

 

 

21,640

 

Acquisition and integration related costs

 

492

 

 

9,506

 

 

741

 

 

13,028

 

Restructuring and related costs

 

2,180

 

 

 

 

2,248

 

 

 

Adjusted EBITDA

 

$

110,042

 

 

$

85,092

 

 

$

235,539

 

 

$

169,454

 

 

CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)

 

 

 

 

 

 

 

June 30,
2019

 

December 31,
2018

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,297,812

 

 

$

1,100,416

 

Accounts receivable, less allowance of $5,452 and $5,709 as of June 30, 2019 and December 31, 2018, respectively

 

95,583

 

 

89,192

 

Prepaid expenses and other current assets

 

20,367

 

 

23,690

 

Total current assets

 

1,413,762

 

 

1,213,298

 

 

 

 

 

 

Long-term investments

 

10,070

 

 

10,070

 

Deferred income taxes, net

 

5,670

 

 

7,469

 

Property and equipment, net

 

84,518

 

 

83,303

 

Lease right-of-use assets

 

111,004

 

 

 

Goodwill

 

1,617,853

 

 

1,611,535

 

Intangible assets, net

 

272,177

 

 

288,911

 

Deferred commission costs, net

 

83,874

 

 

76,031

 

Deposits and other assets

 

6,762

 

 

7,432

 

Income tax receivable

 

14,908

 

 

14,908

 

Total assets

 

$

3,620,598

 

 

$

3,312,957

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

6,996

 

 

$

6,327

 

Accrued wages and commissions

 

47,394

 

 

45,588

 

Accrued expenses

 

48,932

 

 

29,821

 

Deferred gain on the sale of building

 

 

 

2,523

 

Income taxes payable

 

8,551

 

 

14,288

 

Deferred rent

 

 

 

4,153

 

Lease liabilities

 

27,097

 

 

 

Deferred revenue

 

58,290

 

 

51,459

 

Total current liabilities

 

197,260

 

 

154,159

 

 

 

 

 

 

Deferred gain on the sale of building

 

 

 

13,669

 

Deferred rent

 

 

 

31,944

 

Deferred income taxes, net

 

77,452

 

 

69,857

 

Income taxes payable

 

17,540

 

 

17,386

 

Lease and other long-term liabilities

 

124,275

 

 

4,000

 

Total liabilities

 

$

416,527

 

 

$

291,015

 

 

 

 

 

 

Total stockholders’ equity

 

3,204,071

 

 

3,021,942

 

Total liabilities and stockholders’ equity

 

$

3,620,598

 

 

$

3,312,957

 

 

CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)

 

 

 

 

 

Six Months Ended
June 30,

 

 

2019

 

2018

Operating activities:

 

 

 

 

Net income

 

$

148,417

 

 

$

96,066

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

38,413

 

 

37,567

 

Amortization of deferred commissions costs

 

25,550

 

 

24,275

 

Amortization of debt issuance costs

 

438

 

 

436

 

Stock-based compensation expense

 

25,845

 

 

21,640

 

Deferred income taxes, net

 

6,359

 

 

4,291

 

Bad debt expense

 

5,224

 

 

2,857

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

Accounts receivable

 

(10,898

)

 

(5,089

)

Prepaid expenses and other current assets

 

1,751

 

 

(17,655

)

Deferred commissions

 

(33,397

)

 

(29,554

)

Lease right-of-use and other assets

 

11,095

 

 

(1,444

)

Accounts payable and other liabilities

 

4,137

 

 

(16,619

)

Deferred revenue

 

10,633

 

 

2,546

 

Net cash provided by operating activities

 

233,567

 

 

119,317

 

 

 

 

 

 

Investing activities:

 

 

 

 

Purchases of property and equipment and other assets

 

(14,387

)

 

(15,851

)

Cash paid for acquisitions, net of cash acquired

 

(13,721

)

 

(340,074

)

Net cash used in investing activities

 

(28,108

)

 

(355,925

)

 

 

 

 

 

Financing activities:

 

 

 

 

Repurchase of restricted stock to satisfy tax withholding obligations

 

(24,225

)

 

(22,394

)

Proceeds from exercise of stock options and employee stock purchase plan

 

16,695

 

 

14,214

 

Other financing activities

 

(123

)

 

 

Net cash used in financing activities

 

(7,653

)

 

(8,180

)

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

(410

)

 

(397

)

Net increase (decrease) in cash and cash equivalents

 

197,396

 

 

(245,185

)

Cash and cash equivalents at the beginning of period

 

1,100,416

 

 

1,211,463

 

Cash and cash equivalents at the end of period

 

$

1,297,812

 

 

$

966,278

 

   

  

CoStar Group, Inc.

Disaggregated Revenues - Unaudited

(in thousands)

 

 

 

Three Months Ended June 30,

 

2019

 

2018

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

 

 

 

 

 

CoStar Suite

$

145,910

 

$

6,915

 

$

152,825

 

$

127,289

 

$

6,523

 

$

133,812

Information services

 

18,659

 

 

2,118

 

 

20,777

 

 

13,474

 

 

2,207

 

 

15,681

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

120,488

 

 

 

120,488

 

 

104,793

 

 

 

104,793

Commercial property and land

 

49,505

 

 

165

 

 

49,670

 

 

42,732

 

 

 

42,732

Total revenues

$

334,562

 

$

9,198

 

$

343,760

 

$

288,288

 

$

8,730

 

$

297,018

 

 

 

 

Six Months Ended June 30,

 

2019

 

2018

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

 

 

 

 

 

CoStar Suite

$

286,883

 

$

13,643

 

$

300,526

 

$

251,176

 

$

12,997

 

$

264,173

Information services

 

35,250

 

 

4,377

 

 

39,627

 

 

26,234

 

 

4,656

 

 

30,890

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

234,756

 

 

 

234,756

 

 

192,476

 

 

 

192,476

Commercial property and land

 

96,910

 

 

366

 

 

97,276

 

 

83,197

 

 

 

83,197

Total revenues

$

653,799

 

$

18,386

 

$

672,185

 

$

553,083

 

$

17,653

 

$

570,736

 

CoStar Group, Inc.

Results of Segments - Unaudited

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

EBITDA

 

 

 

 

 

 

 

North America

$

95,001

 

 

$

64,762

 

 

$

210,269

 

 

$

135,817

 

International

 

(1,447

)

 

 

(404

)

 

 

(3,564

)

 

 

(1,031

)

Total EBITDA

$

93,554

 

 

$

64,358

 

 

$

206,705

 

 

$

134,786

 

 
 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures with 2018-2019 Quarterly Results - Unaudited

(in millions, except per share data)

 

 

 

 

 

 

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

 

 

 

 

 

 

2018

 

2019

 

Q1

Q2

Q3

Q4

Q1

Q2

 

 

 

 

 

 

 

Net income

$

52.2

 

$

43.8

 

$

58.8

 

$

83.5

 

$

85.2

 

$

63.2

 

Income tax expense

 

3.5

 

 

1.9

 

 

14.2

 

 

26.1

 

 

12.5

 

 

16.8

 

Income before income taxes

 

55.7

 

 

45.7

 

 

73.0

 

 

109.6

 

 

97.7

 

 

80.0

 

Amortization of acquired intangible assets

 

10.4

 

 

14.1

 

 

13.6

 

 

13.3

 

 

13.2

 

 

12.2

 

Stock-based compensation expense

 

10.4

 

 

11.2

 

 

9.0

 

 

12.1

 

 

12.0

 

 

13.8

 

Acquisition and integration related costs

 

3.5

 

 

9.5

 

 

7.2

 

 

1.5

 

 

0.2

 

 

0.5

 

Restructuring and related costs

 

2.3

 

 

0.1

 

 

2.2

 

Non-GAAP income before income taxes

 

80.1

 

 

80.6

 

 

105.1

 

 

136.5

 

 

123.2

 

 

108.7

 

Assumed rate for income tax expense *

 

25

%

 

25

%

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(20.0

)

 

(20.1

)

 

(26.3

)

 

(34.1

)

 

(30.8

)

 

(27.2

)

Non-GAAP net income

$

60.1

 

$

60.4

 

$

78.8

 

$

102.3

 

$

92.4

 

$

81.5

 

 

 

 

 

 

 

 

Non-GAAP net income per share - diluted

$

1.65

 

$

1.66

 

$

2.16

 

$

2.81

 

$

2.53

 

$

2.23

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

35.9

 

 

36.1

 

 

36.1

 

 

36.1

 

 

36.2

 

 

36.3

 

Weighted average outstanding shares - diluted

 

36.4

 

 

36.5

 

 

36.5

 

 

36.5

 

 

36.6

 

 

36.6

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed for 2019 and 2018, which approximates our statutory corporate tax rate.

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

2018

 

2019

 

Q1

Q2

Q3

Q4

Q1

Q2

 

 

 

 

 

 

 

Net income

$

52.2

 

$

43.8

 

$

58.8

 

$

83.5

 

$

85.2

 

$

63.2

 

Amortization of acquired intangible assets

 

10.4

 

 

14.1

 

 

13.6

 

 

13.3

 

 

13.2

 

 

12.2

 

Depreciation and other amortization

 

6.6

 

 

6.4

 

 

6.8

 

 

6.5

 

 

6.5

 

 

6.5

 

Interest and other income

 

(3.0

)

 

(2.6

)

 

(3.0

)

 

(4.6

)

 

(4.9

)

 

(5.9

)

Interest and other expense

 

0.7

 

 

0.7

 

 

0.7

 

 

0.7

 

 

0.7

 

 

0.7

 

Income tax expense

 

3.5

 

 

1.9

 

 

14.2

 

 

26.1

 

 

12.5

 

 

16.8

 

EBITDA

$

70.4

 

$

64.3

 

$

91.1

 

$

125.5

 

$

113.2

 

$

93.5

 

Stock-based compensation expense

 

10.4

 

 

11.2

 

 

9.0

 

 

12.1

 

 

12.0

 

 

13.8

 

Acquisition and integration related costs

 

3.5

 

 

9.5

 

 

7.2

 

 

1.5

 

 

0.2

 

 

0.5

 

Restructuring and related costs

 

2.3

 

 

0.1

 

 

2.2

 

Adjusted EBITDA

$

84.4

 

$

85.1

 

$

109.6

 

$

139.0

 

$

125.5

 

$

110.0

 

 

CoStar Group, Inc.

Reconciliation of Forward-Looking Guidance - Unaudited

(in thousands, except per share data)

 

 

 

 

 

 

 

 

Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income

 

Guidance Range

 

Guidance Range

 

For the Three Months

 

For the Twelve Months

 

Ended September 30, 2019

 

Ended December 31, 2019

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

Net income

$

65,000

 

 

$

72,000

 

 

$

281,000

 

 

$

291,000

 

Income tax expense

22,000

 

 

24,000

 

 

94,000

 

 

97,000

 

Income before income taxes

87,000

 

 

96,000

 

 

375,000

 

 

388,000

 

Amortization of acquired intangible assets

12,000

 

 

12,000

 

 

49,000

 

 

49,000

 

Stock-based compensation expense

15,000

 

 

13,000

 

 

56,000

 

 

53,000

 

Acquisition and integration related costs

2,000

 

 

1,000

 

 

3,000

 

 

2,000

 

Restructuring and related costs

3,000

 

 

1,000

 

 

5,000

 

 

3,000

 

Non-GAAP income before income taxes

119,000

 

 

123,000

 

 

488,000

 

 

495,000

 

Assumed rate for income tax expense *

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

(29,800

)

 

(30,800

)

 

(122,000

)

 

(123,800

)

Non-GAAP net income

$

89,200

 

 

$

92,200

 

 

$

366,000

 

 

$

371,200

 

 

 

 

 

 

 

 

 

Net income per share - diluted

$

1.78

 

 

$

1.97

 

 

$

7.68

 

 

$

7.95

 

Non-GAAP net income per share - diluted

$

2.44

 

 

$

2.52

 

 

$

10.00

 

 

$

10.14

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - diluted

36,600

 

 

36,600

 

 

36,600

 

 

36,600

 

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed, which approximates our statutory corporate tax rate.

 

 

 

 

 

 

 

 

Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA

 

 

 

 

 

Guidance Range

 

Guidance Range

 

For the Three Months

 

For the Twelve Months

 

Ended September 30, 2019

 

Ended December 31, 2019

 

Low

 

High

 

Low

 

High

Net income

$

65,000

 

 

$

72,000

 

 

$

281,000

 

 

$

291,000

 

Amortization of acquired intangible assets

12,000

 

 

12,000

 

 

49,000

 

 

49,000

 

Depreciation and other amortization

7,000

 

 

7,000

 

 

26,000

 

 

26,000

 

Interest and other expense, net

(3,000

)

 

(3,000

)

 

(16,000

)

 

(16,000

)

Income tax expense

22,000

 

 

24,000

 

 

94,000

 

 

97,000

 

Stock-based compensation expense

15,000

 

 

13,000

 

 

56,000

 

 

53,000

 

Acquisition and integration related costs

2,000

 

 

1,000

 

 

3,000

 

 

2,000

 

Restructuring and related costs

3,000

 

 

1,000

 

 

5,000

 

 

3,000

 

Adjusted EBITDA

$

123,000

 

 

$

127,000

 

 

$

498,000

 

 

$

505,000

 

 

About CoStar Group, Inc.

CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. LoopNet is the most heavily trafficked commercial real estate marketplace online with 5.8 million monthly unique visitors. Realla is the UK’s most comprehensive commercial property digital marketplace. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. CoStar Group’s websites attracted an average of over 52 million unique monthly visitors in aggregate in the second quarter of 2019. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Canada with a staff of over 3,900 worldwide, including the industry’s largest professional research organization. For more information, visit www.costargroup.com.

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about CoStar Group's financial expectations, the Company's plans, objectives, expectations and intentions and other statements including words such as “hope,” "anticipate," "may," "believe," "expect," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or other comparable terminology. Such statements are based upon the current beliefs and expectations of management of CoStar Group and are subject to significant risks and uncertainties. Actual results may differ materially from the results anticipated in the forward-looking statements. The following factors, among others, could cause or contribute to such differences: the risk that the trends stated or implied by this release cannot or will not be sustained at the current pace, including trends related to revenue, net income, non-GAAP net income, EBITDA, adjusted EBITDA, sales bookings and traffic; the risk that the Company is unable to sustain current revenue, earnings and bookings growth rates or increase them; the risk that the Company’s Apartments.com marketing investment plans change; the risk that additional marketing investments in Apartments.com do not produce the expected results, including acceleration of the rate at which the Company captures market share; the risk that revenues for the third quarter and full year 2019 will not be as stated in this press release; the risk that net income for the third quarter and full year 2019 will not be as stated in this press release; the risk that adjusted EBITDA for the third quarter and full year 2019 will not be as stated in this press release; the risk that non-GAAP net income and non-GAAP net income per diluted share for the third quarter and full year 2019 will not be as stated in this press release; and the risk that the tax rate estimates stated in this press release are incorrect or may change. Additional factors that could cause results to differ materially from those anticipated in the forward-looking statements can be found in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2018, and CoStar’s Quarterly Report on Form 10-Q for the period ended March 31, 2019, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, and the Company’s other filings with the SEC available at the SEC’s website (www.sec.gov). CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Scott Wheeler
Chief Financial Officer
(202) 336-6920
swheeler@costar.com

Richard Simonelli
Vice President
Investor Relations
(202) 346-6394
rsimonelli@costar.com

Source: CoStar Group, Inc.

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