CoStar Group Second Quarter 2021 Revenue Increases 21% Year-over-Year, Visitors to CoStar Group Marketplaces up over 45% Year-over-Year

July 27, 2021

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, 2021 was $480 million, an increase of 21% over revenue of $397 million for the second quarter of 2020.

Net income for the second quarter of 2021 was $61 million, or $0.16 per diluted share. Non-GAAP net income for the second quarter of 2021 (which excludes amortization of acquired intangible assets, stock-based compensation, and other items as described below) was $103 million or $0.26 per diluted share, an increase of $15 million or 16% versus the second quarter of 2020.

EBITDA for the second quarter of 2021 was $133 million, an increase of 22% versus EBITDA of $109 million for the second quarter of 2020. Adjusted EBITDA (which excludes stock-based compensation, acquisition and integration related costs and other items as described below) for the second quarter of 2021 was $150 million, an increase of 17% compared to adjusted EBITDA of $129 million for the second quarter of 2020.

“We saw incredibly strong performance across all of our businesses in the second quarter, with total revenue and profit ahead of forecast and the total numbers of visitors to our platforms up over 45% year-over-year,” said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “CoStar Group net new bookings in the second quarter of 2021 increased 47% over the second quarter of 2020 to $51 million. CoStar Suite net new bookings were the strongest in years, up over 900% year-over-year and 19% quarter-over-quarter in the second quarter.”

“Apartments.com set a new traffic record with network visitors up 30% year-over-year in the second quarter of 2021, which resulted in a 57% year-over-year increase in leads to our customers. Total leads generated by Apartments.com are up over 120% since 2018,” continued Florance. “During the second quarter of 2021, our most economical ad packages generated more leads than our top-level packages were generating just a year ago. Without significant price increases during the pandemic, our effective price per lead dropped dramatically. This caused net new bookings in Apartments.com to fall from the record high levels achieved in the second quarter of 2020. Moving forward, we intend to adjust pricing to reflect the strength of our dramatically higher lead flows, which we believe will accelerate net new bookings.”

“LoopNet Signature Ad revenue grew 71% year-over-year in the second quarter of 2021 while unique visitors to our LoopNet network increased 33%,” stated Florance. “Ten-X revenue increased over 40% year-over-year on a proforma basis in the second quarter of 2021, as we are seeing increased volume of assets and higher value assets sold through our platform. Homesnap also performed very well in the second quarter of 2021, with total revenue growth up 50% year-over-year on a proforma basis, and total agent subscribers expanding 80% to over 63,000 at the end of the second quarter.”

“With great momentum in our core business, we are focused on significantly expanding our total addressable market by leveraging our strengths into the digitization of residential real estate and into international markets. We are committed to accelerating future growth, as evidenced by the acquisition of Homes.com in May of this year; the steps we have taken to improve that experience for sellers, buyers and real estate agents; and our planned investment in residential technology and content in the second half of 2021,” concluded Florance.

Year 2020-2021 Quarterly Results - Unaudited

(in millions, except per share data)

 

2020

 

2021

 

Q1

Q2

Q3

Q4

 

Q1

Q2

 

 

 

 

 

 

 

 

Revenues

$392

$397

$426

$444

 

$458

$480

Net income

73

60

58

36

 

74

61

Net income per share - diluted(1)

0.20

0.16

0.15

0.09

 

0.19

0.16

Weighted average outstanding shares - diluted(1)

368

377

394

394

 

394

394

 

 

 

 

 

 

 

 

EBITDA

100

109

108

88

 

136

133

Adjusted EBITDA

124

129

134

167

 

160

150

Non-GAAP net income

90

88

89

112

 

108

103

Non-GAAP net income per share - diluted(1)

0.24

0.23

0.23

0.29

 

0.27

0.26

__________________________              

(1) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

As of June 30, 2021, the Company had approximately $3.7 billion in cash, cash equivalents and long-term investments and outstanding debt of approximately $987 million.

2021 Outlook

The Company is increasing its revenue guidance for the full year of 2021 to a new range of $1.940 billion to $1.950 billion, representing growth of approximately 17% year-over-year at the midpoint of the range. Revenue for the third quarter of 2021 is expected to be in the range of $495 million to $500 million, representing revenue growth of approximately 17% over the third quarter of 2020 at the midpoint of the range.

The Company is lowering its adjusted EBITDA guidance for the full year of 2021 to a new range of $605 million to $615 million to reflect the expected negative EBITDA results of Homes.com and planned investments to integrate and develop the residential marketplace. The revised adjusted EBITDA guidance represents growth of approximately 10% year-over-year at the midpoint of the range. For the third quarter of 2021, the Company expects adjusted EBITDA in a range of $130 million to $135 million.

The Company is lowering its non-GAAP net income per diluted share guidance for full-year 2021 to a new range of $1.04 to $1.06 per share based on 395 million shares. For the third quarter of 2021, we expect non-GAAP net income per diluted share in a range of $0.22 to $0.23 per share based on 395 million shares. These ranges include an estimated non-GAAP tax rate of 25% for the full year and the third quarter of 2021.

The preceding forward-looking statements reflect CoStar Group’s expectations as of July 27, 2021, including forward-looking non-GAAP financial measures on a consolidated basis, based on current estimates, expectations, observations, and trends. Given the risk factors, rapidly evolving economic environment, and uncertainties and assumptions discussed in this release and in our quarterly reports on Form 10-Q and annual reports on Form 10-K, including uncertainties as a result of the COVID-19 pandemic and responses to it by, and the impact on, global economies and the commercial real estate industry, 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 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 (expense) income and other (expense) income, 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 2021, 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 to discuss second quarter 2021 results and the Company’s outlook at 5:00 PM EDT on Tuesday, July 27, 2021. A live audio webcast of the conference will be available in listen-only mode through the Investors section of the CoStar Group website: https://investors.costargroup.com. A replay of the webcast audio will also be available in the Investors section of our 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,

 

 

2021

 

2020

 

2021

 

2020

Revenues

 

$

480,333

 

 

$

397,159

 

 

$

938,030

 

 

$

789,006

 

Cost of revenues

 

89,566

 

 

74,040

 

 

178,314

 

 

152,949

 

Gross profit

 

390,767

 

 

323,119

 

 

759,716

 

 

636,057

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing (excluding customer base amortization)

 

164,612

 

 

130,461

 

 

303,299

 

 

255,568

 

Software development

 

48,573

 

 

39,001

 

 

95,357

 

 

80,611

 

General and administrative

 

58,226

 

 

57,403

 

 

122,076

 

 

116,276

 

Customer base amortization

 

18,345

 

 

14,935

 

 

36,764

 

 

26,419

 

 

 

289,756

 

 

241,800

 

 

557,496

 

 

478,874

 

 

 

 

 

 

 

 

 

 

Income from operations

 

101,011

 

 

81,319

 

 

202,220

 

 

157,183

 

Interest expense

 

(7,877)

 

 

(3,596)

 

 

(15,755)

 

 

(1,945)

 

Other income (expense)

 

847

 

 

(474)

 

 

797

 

 

367

 

Income before income taxes

 

93,981

 

 

77,249

 

 

187,262

 

 

155,605

 

Income tax expense

 

32,833

 

 

16,889

 

 

51,902

 

 

22,452

 

Net income

 

$

61,148

 

 

$

60,360

 

 

$

135,360

 

 

$

133,153

 

 

 

 

 

 

 

 

 

 

Net income per share - basic(1)

 

$

0.16

 

 

$

0.16

 

 

$

0.35

 

 

$

0.36

 

Net income per share - diluted(1)

 

$

0.16

 

 

$

0.16

 

 

$

0.34

 

 

$

0.36

 

 

 

 

 

 

 

 

 

 

Weighted-average outstanding shares - basic(1)

 

392,306

 

 

375,239

 

 

391,942

 

 

369,972

 

Weighted-average outstanding shares - diluted(1)

 

394,098

 

 

377,336

 

 

393,906

 

 

372,548

 

__________________________                        

(1) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

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,

 

 

2021

 

2020

 

2021

 

2020

Net income

 

$

61,148

 

 

$

60,360

 

 

$

135,360

 

 

$

133,153

 

Income tax expense

 

32,833

 

 

16,889

 

 

51,902

 

 

22,452

 

Income before income taxes

 

93,981

 

 

77,249

 

 

187,262

 

 

155,605

 

Amortization of acquired intangible assets

 

25,293

 

 

20,989

 

 

51,120

 

 

38,478

 

Stock-based compensation expense

 

15,144

 

 

9,527

 

 

30,689

 

 

24,707

 

Acquisition and integration related costs

 

2,001

 

 

10,031

 

 

10,463

 

 

18,744

 

Other expense

 

786

 

 

 

 

1,857

 

 

 

Non-GAAP income before income taxes

 

137,205

 

 

117,796

 

 

281,391

 

 

237,534

 

Assumed rate for income tax expense *

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(34,301)

 

 

(29,449)

 

 

(70,348)

 

 

(59,384)

 

Non-GAAP net income

 

$

102,904

 

 

$

88,347

 

 

$

211,043

 

 

$

178,150

 

 

 

 

 

 

 

 

 

 

Net income per share - diluted(1)

 

$

0.16

 

 

$

0.16

 

 

$

0.34

 

 

$

0.36

 

Non-GAAP net income per share - diluted(1)

 

$

0.26

 

 

$

0.23

 

 

$

0.54

 

 

$

0.48

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic(1)

 

392,306

 

 

375,239

 

 

391,942

 

 

369,972

 

Weighted average outstanding shares - diluted(1)

 

394,098

 

 

377,336

 

 

393,906

 

 

372,548

 

__________________________

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed for 2021 and 2020, which approximates our statutory federal and state corporate tax rate.

(1) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2021

 

2020

 

2021

 

2020

Net income

 

$

61,148

 

 

$

60,360

 

 

$

135,360

 

 

$

133,153

 

Amortization of acquired intangible assets in cost of revenues

 

6,948

 

 

6,054

 

 

14,356

 

 

12,059

 

Amortization of acquired intangible assets in operating expenses

 

18,345

 

 

14,935

 

 

36,764

 

 

26,419

 

Depreciation and other amortization

 

7,028

 

 

6,990

 

 

15,528

 

 

13,757

 

Interest expense

 

7,877

 

 

3,596

 

 

15,755

 

 

1,945

 

Other (income) expense

 

(847)

 

 

474

 

 

(797)

 

 

(367)

 

Income tax expense

 

32,833

 

 

16,889

 

 

51,902

 

 

22,452

 

EBITDA

 

$

133,332

 

 

$

109,298

 

 

$

268,868

 

 

$

209,418

 

Stock-based compensation expense

 

15,144

 

 

9,527

 

 

30,689

 

 

24,707

 

Acquisition and integration related costs

 

2,001

 

 

10,031

 

 

10,463

 

 

18,744

 

Adjusted EBITDA

 

$

150,477

 

 

$

128,856

 

 

$

310,020

 

 

$

252,869

 

 

CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)

 

 

 

 

 

 

 

June 30,
2021

 

December 31,
2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

3,674,909

 

 

$

3,755,912

 

Accounts receivable

 

122,702

 

 

119,059

 

Less: Allowance for credit losses

 

(14,433)

 

 

(15,110)

 

Accounts receivable, net

 

108,269

 

 

103,949

 

Prepaid expenses and other current assets

 

34,753

 

 

28,651

 

Total current assets

 

3,817,931

 

 

3,888,512

 

 

 

 

 

 

Deferred income taxes, net

 

3,034

 

 

4,983

 

Property and equipment, net

 

239,125

 

 

126,325

 

Lease right-of-use assets

 

119,290

 

 

108,740

 

Goodwill

 

2,294,452

 

 

2,235,999

 

Intangible assets, net

 

476,179

 

 

426,745

 

Deferred commission costs, net

 

94,387

 

 

93,274

 

Deposits and other assets

 

16,230

 

 

15,856

 

Income tax receivable

 

14,986

 

 

14,986

 

Total assets

 

$

7,075,614

 

 

$

6,915,420

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

16,376

 

 

$

15,732

 

Accrued wages and commissions

 

76,014

 

 

80,998

 

Accrued expenses

 

89,284

 

 

110,305

 

Income taxes payable

 

25,527

 

 

16,316

 

Lease liabilities

 

28,779

 

 

32,648

 

Deferred revenue

 

92,698

 

 

74,851

 

Total current liabilities

 

328,678

 

 

330,850

 

 

 

 

 

 

Long-term debt, net

 

987,325

 

 

986,715

 

Deferred income taxes, net

 

76,979

 

 

72,991

 

Income taxes payable

 

25,480

 

 

25,282

 

Lease and other long-term liabilities

 

129,925

 

 

124,223

 

Total liabilities

 

$

1,548,387

 

 

$

1,540,061

 

 

 

 

 

 

Total stockholders’ equity

 

5,527,227

 

 

5,375,359

 

Total liabilities and stockholders’ equity

 

$

7,075,614

 

 

$

6,915,420

 

CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)

 

 

 

Six Months Ended
June 30,

 

2021

 

2020

Operating activities:

 

 

 

Net income

$

135,360

 

 

$

133,153

 

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

 

 

 

Depreciation and amortization

68,516

 

 

52,235

 

Amortization of deferred commissions costs

30,847

 

 

29,662

 

Amortization of Senior Notes discount and issuance costs

1,159

 

 

508

 

Realized loss on investments

 

 

541

 

Non-cash lease expense

13,136

 

 

12,400

 

Stock-based compensation expense

30,689

 

 

24,053

 

Deferred income taxes, net

9,929

 

 

3,569

 

Credit loss expense

6,086

 

 

15,688

 

Other operating activities, net

(24)

 

 

(789)

 

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

(8,526)

 

 

(37,364)

 

Prepaid expenses and other current assets

(14,567)

 

 

4,371

 

Deferred commissions

(31,922)

 

 

(32,122)

 

Accounts payable and other liabilities

(32,474)

 

 

37,793

 

Lease liabilities

(15,674)

 

 

(14,126)

 

Income taxes payable

9,415

 

 

12,328

 

Deferred revenue

16,148

 

 

13,503

 

Other assets

2,191

 

 

(6,757)

 

Net cash provided by operating activities

220,289

 

 

248,646

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from sale and settlement of investments

 

 

10,259

 

Proceeds from sale of property and equipment and other assets

201

 

 

 

Purchase of Richmond assets and other intangibles

(123,623)

 

 

 

Purchases of property and equipment and other assets

(13,093)

 

 

(12,782)

 

Cash paid for acquisitions, net of cash acquired

(148,275)

 

 

(184,502)

 

Net cash used in investing activities

(284,790)

 

 

(187,025)

 

 

 

 

 

Financing activities:

 

 

 

Proceeds from long-term debt

 

 

745,000

 

Repurchase of restricted stock to satisfy tax withholding obligations

(28,405)

 

 

(33,653)

 

Proceeds from equity offering, net of transaction costs

 

 

1,690,148

 

Proceeds from exercise of stock options and employee stock purchase plan

12,324

 

 

16,513

 

Other financing activities

(57)

 

 

(1,650)

 

Net cash (used in) provided by financing activities

(16,138)

 

 

2,416,358

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

(364)

 

 

(305)

 

Net (decrease) increase in cash, cash equivalents and restricted cash

(81,003)

 

 

2,477,674

 

Cash, cash equivalents and restricted cash at the beginning of period

3,755,912

 

 

1,070,731

 

Cash, cash equivalents and restricted cash at the end of period

$

3,674,909

 

 

$

3,548,405

 

CoStar Group, Inc.

Disaggregated Revenues - Unaudited

(in thousands)

 

 

 

Three Months Ended June 30,

 

2021

 

2020

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

 

 

 

 

 

CoStar

$

167,845

 

 

$

9,134

 

 

$

176,979

 

 

$

157,793

 

 

$

7,260

 

 

$

165,053

 

Information services

28,096

 

 

7,061

 

 

35,157

 

 

25,022

 

 

5,514

 

 

30,536

 

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

Multifamily

171,357

 

 

 

 

171,357

 

 

145,541

 

 

 

 

145,541

 

Commercial property and land

96,476

 

 

364

 

 

96,840

 

 

56,006

 

 

23

 

 

56,029

 

Total revenues

$

463,774

 

 

$

16,559

 

 

$

480,333

 

 

$

384,362

 

 

$

12,797

 

 

$

397,159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

2021

 

2020

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

 

 

 

 

 

CoStar

$

331,399

 

 

$

17,764

 

 

$

349,163

 

 

$

315,128

 

 

$

14,881

 

 

$

330,009

 

Information services

55,782

 

 

14,071

 

 

69,853

 

 

50,712

 

 

12,206

 

 

62,918

 

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

Multifamily

337,504

 

 

 

 

337,504

 

 

283,001

 

 

 

 

283,001

 

Commercial property and land

180,852

 

 

658

 

 

181,510

 

 

112,968

 

 

110

 

 

113,078

 

Total revenues

$

905,537

 

 

$

32,493

 

 

$

938,030

 

 

$

761,809

 

 

$

27,197

 

 

$

789,006

 

CoStar Group, Inc.

Results of Segments - Unaudited

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2021

 

2020

 

2021

 

2020

EBITDA

 

 

 

 

 

 

 

North America

$

130,176

 

 

$

112,292

 

 

$

266,034

 

 

$

214,705

 

International

3,156

 

 

(2,994)

 

 

2,834

 

 

(5,287)

 

Total EBITDA

$

133,332

 

 

$

109,298

 

 

$

268,868

 

 

$

209,418

 

 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures with 2020-2021 Quarterly Results - Unaudited

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

 

Q1

Q2

Q3

Q4

 

Q1

Q2

 

 

 

 

 

 

 

 

 

Net income

 

$72.8

$60.4

$58.2

$35.8

 

$74.2

$61.1

Income tax expense

 

5.6

16.9

10.7

10.7

 

19.1

32.8

Income before income taxes

 

78.4

77.3

68.9

46.4

 

93.3

93.9

Amortization of acquired intangible assets

 

17.5

21.0

24.9

24.8

 

25.8

25.3

Stock-based compensation expense

 

15.2

9.5

16.7

12.7

 

15.5

15.1

Acquisition and integration related costs

 

8.7

10.0

7.9

65.9

 

8.5

2.0

Restructuring and related costs

 

0.4

 

Other expense

 

0.1

 

1.1

0.8

Non-GAAP income before income taxes

 

119.8

117.8

118.9

149.8

 

144.2

137.1

Assumed rate for income tax expense *

 

25%

25%

25%

25%

 

25%

25%

Assumed provision for income tax expense

 

(30.0)

(29.5)

(29.7)

(37.5)

 

(36.0)

(34.3)

Non-GAAP net income

 

$89.8

$88.3

$89.2

$112.3

 

$108.2

$102.8

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share - diluted(1)

 

$0.24

$0.23

$0.23

$0.29

 

$0.27

$0.26

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic(1)

 

364.7

375.2

391.6

391.4

 

391.6

392.3

Weighted average outstanding shares - diluted(1)

 

367.8

377.3

394.0

394.0

 

393.7

394.1

__________________________

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed for 2021 and 2020, which approximates our statutory federal and state corporate tax rate.

(1) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

 

Q1

Q2

Q3

Q4

 

Q1

Q2

 

 

 

 

 

 

 

 

 

Net income

 

$72.8

$60.4

$58.2

$35.8

 

$74.2

$61.1

Amortization of acquired intangible assets

 

17.5

21.0

24.9

24.8

 

25.8

25.3

Depreciation and other amortization

 

6.8

7.0

6.8

8.2

 

8.5

7.0

Interest (income) expense

 

(1.7)

3.6

7.5

7.9

 

7.9

7.9

Other (income) expense

 

(0.8)

0.4

0.3

0.9

 

0.1

(0.8)

Income tax expense

 

5.6

16.9

10.7

10.7

 

19.1

32.8

EBITDA

 

$100.2

$109.3

$108.4

$88.3

 

$135.6

$133.3

Stock-based compensation expense

 

15.1

9.5

16.7

12.7

 

15.5

15.1

Acquisition and integration related costs

 

8.7

10.0

7.9

65.9

 

8.5

2.0

Restructuring and related costs

 

0.4

 

Adjusted EBITDA

 

$124.0

$128.8

$133.4

$166.9

 

$159.6

$150.4

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 Year Ending

 

Ending September 30, 2021

 

December 31, 2021

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

Net income

$

49,000

 

 

$

56,000

 

 

$

264,000

 

 

$

275,000

 

Income tax expense

17,000

 

 

19,000

 

 

95,000

 

 

98,000

 

Income before income taxes

66,000

 

 

75,000

 

 

359,000

 

 

373,000

 

Amortization of acquired intangible assets

26,000

 

 

26,000

 

 

103,000

 

 

103,000

 

Stock-based compensation expense

18,000

 

 

16,000

 

 

66,000

 

 

64,000

 

Acquisition and integration related costs

6,000

 

 

4,000

 

 

18,000

 

 

16,000

 

Other expense

1,000

 

 

1,000

 

 

4,000

 

 

4,000

 

Non-GAAP income before income taxes

117,000

 

 

122,000

 

 

550,000

 

 

560,000

 

Assumed rate for income tax expense *

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

(29,300)

 

 

(30,500)

 

 

(138,000)

 

 

(140,000)

 

Non-GAAP net income

$

87,700

 

 

$

91,500

 

 

$

412,000

 

 

$

420,000

 

 

 

 

 

 

 

 

 

Net income per share - diluted(1)

$

0.12

 

 

$

0.14

 

 

$

0.67

 

 

$

0.70

 

Non-GAAP net income per share - diluted(1)

$

0.22

 

 

$

0.23

 

 

$

1.04

 

 

$

1.06

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - diluted(1)

394,700

 

 

394,700

 

 

394,500

 

 

394,500

 

__________________________

 

 

 

 

 

 

 

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

(1) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

 

 

 

 

 

 

 

 

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

 

 

 

 

 

Guidance Range

 

Guidance Range

 

For the Three Months

 

For the Year Ending

 

Ending September 30, 2021

 

December 31, 2021

 

Low

 

High

 

Low

 

High

Net income

$

49,000

 

 

$

56,000

 

 

$

264,000

 

 

$

275,000

 

Amortization of acquired intangible assets

26,000

 

 

26,000

 

 

103,000

 

 

103,000

 

Depreciation and other amortization

7,000

 

 

7,000

 

 

30,000

 

 

30,000

 

Interest expense

8,000

 

 

8,000

 

 

32,000

 

 

32,000

 

Other (income)

(1,000)

 

 

(1,000)

 

 

(3,000)

 

 

(3,000)

 

Income tax expense

17,000

 

 

19,000

 

 

95,000

 

 

98,000

 

Stock-based compensation expense

18,000

 

 

16,000

 

 

66,000

 

 

64,000

 

Acquisition and integration related costs

6,000

 

 

4,000

 

 

18,000

 

 

16,000

 

Adjusted EBITDA

$

130,000

 

 

$

135,000

 

 

$

605,000

 

 

$

615,000

 

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. STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality sector. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online. 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. Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homes.com offers real estate professionals advertising and marketing services for residential properties. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe, Canada and Asia with a staff of approximately 4,900 worldwide, including the industry’s largest professional research organization. For more information, visit www.costargroup.com.

This news release and the Company’s earnings conference call contain “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 plans, objectives, expectations, beliefs 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 many risks and uncertainties. Actual results may differ materially from the results anticipated in the forward-looking statements and the assumptions and estimates used as a basis for 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 or in the earnings conference call cannot or will not be sustained at the current pace or may increase or decrease or expectations are not met, including trends and expectations related to revenue, net income, non-GAAP net income, EBITDA, adjusted EBITDA, adjusted EBITDA margin, gross margin, site traffic and visitors, sales, renewal rates, leads, the volume and value of assets sold through the Ten-X auction platform, and the number of Homesnap agent subscribers; the risk that the Company is unable to sustain current revenue and earnings, as well as CoStar Suite and Company-wide net new sales growth rates or increase them; the risk that the Company’s business or investment plans change or that investments do not produce the expected results, including investments in residential marketplace technology and content; the risk that Apartments.com adjusted pricing does not accelerate net new bookings; the risk that revenues for the third quarter and full year 2021 will not be as stated in this press release; the risk that net income for the third quarter and full year 2021 will not be as stated in this press release; the risk that adjusted EBITDA for the third quarter and full year 2021 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 2021 will not be as stated in this press release; the risk that the tax rate estimates stated in this press release may change; uncertainty surrounding the impact of the COVID-19 pandemic, including volatility in the international and U.S. economy and the commercial real estate industry, employee attrition, absenteeism or decreased productivity, quarantines or other travel or health-related restrictions; the length and severity of the COVID-19 pandemic; the pace of recovery following the COVID-19 pandemic; and government and private actions taken to control the spread of COVID-19. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar Group’s filings from time to time with the Securities and Exchange Commission, including in CoStar Group’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar Group’s other filings with the SEC (including Current Reports on Form 8-K) available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar Group on the date hereof, and CoStar Group assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations:
Bill Warmington
Vice President
CoStar Group Investor Relations
(202) 346-5661
wwarmington@costar.com

News Media:
Matthew Blocher
Vice President
CoStar Group Corporate Marketing & Communications
(202) 346-6775
mblocher@costargroup.com

Source: CoStar Group, Inc.