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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 0-24531
https://cdn.kscope.io/107117c8f20e8ec88634fa5dfffd4ea1-csgp-logoa01a22.jpg
CoStar Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware52-2091509
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1331 L Street, NW
Washington,DC20005
(Address of principal executive offices) (Zip Code)
(202) 346-6500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock ($0.01 par value)CSGPNasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of October 20, 2023, there were 408,363,368 shares of the registrant’s common stock outstanding.



COSTAR GROUP, INC.
FORM 10-Q
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION 
Item 1. 
  
  
  
Item 2. 
Item 3. 
Item 4. 
PART II OTHER INFORMATION
Item 1. 
Item 1A. 
Item 2. 
Item 3. 
Item 4. 
Item 5. 
Item 6. 
2


Glossary of Terms
The following abbreviations or acronyms used in this Quarterly Report on Form 10-Q (this "Report") are defined below:
Abbreviation or AcronymDefinition
2020 Credit Agreement
The second amended and restated credit agreement, which amended and restated in its entirety the then-existing credit agreement originally entered into on April 1, 2014, dated July 1, 2020, as amended by the first amendment to the second amended and restated credit agreement, dated May 8, 2023.
2022 Form 10-K
CoStar Group's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 22, 2023
ASC
Accounting Standards Codification
ASUAccounting Standards Update
BrexitThe June 23, 2016 U.K. referendum in which British citizens approved an exit from the E.U.
Business ImmoThe legal entity BIH, a French société par actions simplifiée, the owner and operator of Business Immo, a leading commercial real estate news service provider in France
Business Immo Acquisition
CoStar UK's acquisition of the issued share capital of Business Immo on April 5, 2022
CECLCurrent expected credit losses
CoStar Group (also the “Company,” “we,” “us” or “our”)The legal entity, CoStar Group, Inc., a Delaware corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of CoStar Group, Inc. and its consolidated subsidiaries
CoStar UKThe legal entity, CoStar UK Limited, a wholly owned subsidiary of CoStar Group
Covenant Suspension PeriodA period of time defined in the 2020 Credit Agreement in which we maintain a corporate investment grade rating from any two of Standard & Poor’s Rating Services, Fitch Ratings, Inc. or Moody’s Investors Services, Inc. and no event of default is continuing
CRICoStar Realty Information, Inc., a Delaware corporation and wholly owned subsidiary of CoStar Group, Inc.
DSUsDeferred Stock Units
E.U.European Union
EBITDA
Net income before interest income or expense, net; other income or expense, net; loss on debt extinguishment; income taxes; depreciation and amortization
ESGEnvironmental, Social and Governance
ESPPEmployee Stock Purchase Plan
EURIBOREuro Interbank Offered Rate
FASB
Financial Accounting Standards Board
GAAPGenerally accepted accounting principles in the U.S.
GILTIGlobal intangible low taxed income inclusion
Halo Merger SubSnapped Halo Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of CoStar Realty Information, Inc.
Homes.com
A homes for-sale listings site
Homesnap
Homesnap is an online and mobile software platform that provides residential real estate professionals access to applications that manage residential real estate agent workflow and marketing campaigns delivered on third-party platforms acquired in the Homesnap Acquisition
Homesnap Acquisition
CRI's acquisition of Homesnap completed on December 22, 2020, pursuant to an Agreement and Plan of Merger dated November 20, 2020 between CRI, Halo Merger Sub, and Homesnap, Inc., a Delaware corporation. Halo Merger Sub was merged with and into Homesnap, Inc., with Homesnap, Inc. surviving the merger as a wholly owned subsidiary of CRI
Land.com NetworkOur network of sites featuring rural lands for sale including: LandsofAmerica, LandAndFarm and LandWatch
LIBORLondon Interbank Offered Rate
3


Abbreviation or AcronymDefinition
Matching RSUsAwards of matching restricted stock units awarded under the Company's Management Stock Purchase Plan
MSPPManagement Stock Purchase Plan
OnTheMarket
OnTheMarket plc is the operator of the onthemarket.com, a leading U.K. residential property portal
ROURight-of-use
SECU.S. Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
Senior Notes
2.800% notes issued by CoStar Group, Inc. due July 15, 2030
SOFRSecured Overnight Financing Rate
SONIASterling Overnight Index Average
STAR Report
A benchmarking tool used by the hospitality industry to compare a hotel's performance against a set of similar hotels in the same geographical area
STR
STR, LLC together with STR Global Ltd is a global data and analytics company that specializes in benchmarking hotel performance and providing market insights to the industry
Ten-XThe legal entity Ten-X Holding Company, Inc. and its directly and indirectly owned subsidiaries
Term SOFRThe forward-looking SOFR term rates administered by CME Group Benchmark Administration Limited
U.K.The United Kingdom of Great Britain and Northern Ireland
U.S.The United States of America
4


PART I — FINANCIAL INFORMATION
Item 1.Financial Statements
COSTAR GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2023202220232022
Revenues$624,669 $556,921 $1,814,941 $1,609,054 
Cost of revenues123,666 108,364 355,224 304,814 
Gross profit501,003 448,557 1,459,717 1,304,240 
Operating expenses:  
Selling and marketing (excluding customer base amortization)266,893 185,395 743,153 510,736 
Software development67,891 56,912 197,850 162,520 
General and administrative94,371 91,270 274,442 246,576 
Customer base amortization10,254 29,651 31,311 60,621 
439,409 363,228 1,246,756 980,453 
Income from operations61,594 85,329 212,961 323,787 
Interest income (expense), net58,422 10,656 153,881 (461)
Other income, net465 1,389 1,655 3,596 
Income before income taxes120,481 97,374 368,497 326,922 
Income tax expense29,907 25,084 90,272 81,841 
Net income$90,574 $72,290 $278,225 $245,081 
Net income per share - basic
$0.22 $0.18 $0.69 $0.62 
Net income per share - diluted
$0.22 $0.18 $0.68 $0.62 
Weighted-average outstanding shares - basic
405,649 394,712 405,190 393,650 
Weighted-average outstanding shares - diluted
407,229 396,209 406,713 394,973 

See accompanying notes.
5


COSTAR GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Net income$90,574 $72,290 $278,225 $245,081 
Other comprehensive (loss) income, net of tax
Foreign currency translation (loss) gain
(6,707)(16,671)764 (40,869)
Total other comprehensive (loss) income, net of tax
(6,707)(16,671)764 (40,869)
Total comprehensive income$83,867 $55,619 $278,989 $204,212 
    

See accompanying notes.
6


COSTAR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 30,
2023
December 31,
2022
ASSETS 
Current assets:  
Cash and cash equivalents$5,229,880 $4,967,970 
Accounts receivable213,742 166,140 
Less: Allowance for credit losses(20,911)(12,195)
Accounts receivable, net192,831 153,945 
Prepaid expenses and other current assets76,013 63,952 
Total current assets5,498,724 5,185,867 
Deferred income taxes, net9,722 9,722 
Property and equipment, net403,195 321,250 
Lease right-of-use assets85,758 80,392 
Goodwill2,315,313 2,314,759 
Intangible assets, net275,095 329,306 
Deferred commission costs, net165,846 142,482 
Deposits and other assets15,997 16,687 
Income tax receivable2,005 2,005 
Total assets$8,771,655 $8,402,470 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$25,866 $28,460 
Accrued wages and commissions91,357 104,988 
Accrued expenses156,009 89,113 
Income taxes payable2,061 10,438 
Lease liabilities40,187 36,049 
Deferred revenue97,583 103,567 
Total current liabilities413,063 372,615 
Long-term debt, net990,185 989,210 
Deferred income taxes, net 63,203 76,202 
Income taxes payable 17,542 14,001 
Lease and other long-term liabilities77,500 80,321 
Total liabilities1,561,493 1,532,349 
Total stockholders' equity7,210,162 6,870,121 
Total liabilities and stockholders' equity$8,771,655 $8,402,470 

See accompanying notes.
7



COSTAR GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Common StockAdditional
Paid-In Capital
Accumulated
Other
Comprehensive Loss
Retained
Earnings
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 2022406,671 $4,066 $5,065,511 $(29,075)$1,829,619 $6,870,121 
Net income— — — — 87,131 87,131 
Other comprehensive income— — — 4,094 — 4,094 
Exercise of stock options24 — 500 — — 500 
Restricted stock grants1,262 13 (13)— —  
Restricted stock grants surrendered(480)(5)(18,642)— — (18,647)
Employee stock purchase plan79 1 5,810 — — 5,811 
Management stock purchase plan67 1 (2,985)— — (2,984)
Stock-based compensation expense— — 19,583 — — 19,583 
Balance at March 31, 2023407,623 $4,076 $5,069,764 $(24,981)$1,916,750 $6,965,609 
Net income— — — — 100,520 100,520 
Other comprehensive income— — — 3,377 — 3,377 
Exercise of stock options396 4 6,946 — — 6,950 
Restricted stock grants9 1 (1)— —  
Restricted stock grants surrendered(67)(1)(813)— — (814)
Employee stock purchase plan50 1 3,889 — — 3,890 
Stock-based compensation expense— — 21,540 — — 21,540 
Balance at June 30, 2023408,011 $4,081 $5,101,325 $(21,604)$2,017,270 $7,101,072 
Net income— — — — 90,574 90,574 
Other comprehensive loss— — — (6,707)— (6,707)
Restricted stock grants49 — — — — — 
Restricted stock grants surrendered(47) (959)— — (959)
Employee stock purchase plan58 1 4,726 — — 4,727 
Management stock purchase plan— — (5)— — (5)
Stock-based compensation expense— — 21,460 — — 21,460 
Balance at September 30, 2023408,071 $4,082 $5,126,547 $(28,311)$2,107,844 $7,210,162 

See accompanying notes.
8


COSTAR GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Common StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive Loss
Retained
Earnings
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 2021
394,936 $3,946 $4,253,318 $(5,758)$1,460,166 $5,711,672 
Net income— — — — 89,318 89,318 
Other comprehensive loss— — — (6,356)— (6,356)
Restricted stock grants1,277 13 (13)— —  
Restricted stock grants surrendered(403)(4)(19,455)— — (19,459)
Employee stock purchase plan64 1 4,117 — — 4,118 
Stock-based compensation expense— — 18,005 — — 18,005 
Balance at March 31, 2022
395,874 $3,956 $4,255,972 $(12,114)$1,549,484 $5,797,298 
Net income— — — — 83,473 83,473 
Other comprehensive loss— — — (17,842)— (17,842)
Restricted stock grants65 1 (1)— —  
Restricted stock grants surrendered(108)(1)(295)— — (296)
Employee stock purchase plan65 1 4,039 — — 4,040 
Stock-based compensation expense— — 17,680 — — 17,680 
Balance at June 30, 2022
395,896 $3,957 $4,277,395 $(29,956)$1,632,957 $5,884,353 
Net income— $— $— $— 72,290 72,290 
Other comprehensive loss— — — (16,671)— (16,671)
Restricted stock grants80 1 (1)— —  
Restricted stock grants surrendered(69)(1)(503)— — (504)
Employee stock purchase plan56 1 3,815 — — 3,816 
Stock-based compensation expense— — 17,928 — — 17,928 
Stock issued for equity offerings, net of transaction costs10,656 107 745,593 — — 745,700 
Balance at September 30, 2022
406,619 $4,065 $5,044,227 $(46,627)$1,705,247 $6,706,912 

See accompanying notes.
9


COSTAR GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September 30,
20232022
Operating activities:  
Net income$278,225 $245,081 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization78,815 109,983 
Amortization of deferred commissions costs69,811 55,373 
Amortization of Senior Notes discount and issuance costs1,799 1,771 
Non-cash lease expense22,092 23,108 
Stock-based compensation expense63,770 54,097 
Deferred income taxes, net(12,949)(21,676)
Credit loss expense25,664 13,468 
Other operating activities, net324 (1,774)
Changes in operating assets and liabilities, net of acquisitions:  
Accounts receivable(64,595)(36,177)
Prepaid expenses and other current assets(20,745)(17,235)
Deferred commissions(93,147)(83,875)
Accounts payable and other liabilities21,067 2,131 
Lease liabilities(26,807)(27,615)
Income taxes payable, net4,444 (29,051)
Deferred revenue(6,045)4,488 
Other assets(738)1,492 
Net cash provided by operating activities340,985 293,589 
Investing activities:  
Proceeds from sale of property and equipment and other assets 5,034 
Purchase of Richmond assets(61,811)(31,530)
Purchases of property and equipment and other assets(14,141)(43,659)
Cash paid for acquisitions, net of cash acquired (6,331)
Net cash used in investing activities(75,952)(76,486)
Financing activities:  
Repayments of long-term debt assumed in acquisition (2,155)
Repurchase of restricted stock to satisfy tax withholding obligations(23,409)(20,259)
Proceeds from equity offering, net of transaction costs 746,170 
Proceeds from exercise of stock options and employee stock purchase plan20,435 10,777 
Net cash (used in) provided by financing activities
(2,974)734,533 
Effect of foreign currency exchange rates on cash and cash equivalents(149)(4,297)
Net increase in cash and cash equivalents261,910 947,339 
Cash and cash equivalents at the beginning of period4,967,970 3,827,126 
Cash and cash equivalents at the end of period$5,229,880 $4,774,465 
Supplemental cash flow disclosures:
Interest paid$29,974 $29,473 
Income taxes paid$108,117 $141,869 
Supplemental non-cash investing and financing activities:
Consideration owed for acquisitions$ $52 
Accrued capital expenditures and non-cash landlord incentives$36,921 $5,808 
Accrued transaction costs from equity offering$ $470 
See accompanying notes.
10


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1.ORGANIZATION
CoStar Group (the “Company”) provides information, analytics, online marketplaces and auction services to the commercial real estate and related business community through its comprehensive, proprietary database of commercial real estate information and related tools. The Company provides online marketplaces for commercial real estate, apartment rentals, residential real estate, land for sale and businesses for sale, and its services are typically distributed to its clients under subscription-based agreements that typically renew automatically, a majority of which have a term of at least one year. The Company operates within two operating segments, North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific and Latin America.
The Company acquired Business Immo in April 2022. See Note 5 for further discussion of this acquisition.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Accounting policies are consistent for each operating segment.
Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information. In the opinion of the Company’s management, the financial statements reflect all adjustments, consisting only of a normal recurring nature, necessary to present fairly the Company’s financial position at September 30, 2023 and December 31, 2022, the results of its operations for the three and nine months ended September 30, 2023 and 2022, its comprehensive income for the three and nine months ended September 30, 2023 and 2022, its changes in stockholders' equity for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 30, 2023 and 2022.
Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Report. Therefore, these financial statements should be read in conjunction with the Company’s 2022 Form 10-K.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, allowance for credit losses, the useful lives and recoverability of long-lived and intangible assets, goodwill, income taxes, accounting for business combinations, stock-based compensation, estimating the Company's incremental borrowing rate for its leases and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ from these estimates.
Revenue Recognition
The Company derives revenues primarily by (i) providing access to its proprietary database of commercial real estate information and (ii) providing online marketplaces for professional property management companies, property owners, real estate agents and brokers and landlords, in each case, typically through a fixed monthly fee for its subscription-based services. Other subscription-based services include (i) real estate and lease management solutions to commercial customers, real estate investors and lenders, (ii) access to applications to manage workflow and advertising and marketing services for residential real estate agents, (iii) benchmarking and analytics for the hospitality industry and (iv) market research, portfolio and debt analysis, management and reporting capabilities.
11


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Subscription contract rates are generally based on the number of sites, number of users, organization size, the client’s business focus, geography, the number of properties reported on or analyzed, the number and types of services to which a client subscribes, the number of properties a client advertises and the prominence and placement of a client's advertised properties in the search results. The Company’s subscription-based license agreements typically renew automatically, and a majority have a term of at least one year. Revenues from our subscription-based contracts were approximately 95% and 92% of total revenues for the three months ended September 30, 2023 and 2022, respectively, and 95% and 93% of total revenues for the nine months ended September 30, 2023 and 2022, respectively.
The Company also derives revenues from transaction-based services including: (i) an online auction platform for commercial real estate through Ten-X, (ii) providing online tenant applications, including background and credit checks, and rental payment processing and (iii) ancillary products and services that are sold on an ad hoc basis.
The Company analyzes contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers, (ii) identification of distinct performance obligations in the contract, (iii) determination of contract transaction price, (iv) allocation of contract transaction price to the performance obligations, and (v) determination of revenue recognition based on timing of satisfaction of the performance obligations.
The Company recognizes revenues upon the satisfaction of its performance obligation(s) (upon transfer of control of promised services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those services. Revenues from subscription-based services are recognized on a straight-line basis over the term of the agreement. Revenues from transaction-based services are recognized when the promised product or services are delivered, which, in the case of Ten-X auctions, is at the time of a successful closing for the sale of a property.
In limited circumstances, the Company's contracts with customers include promises to transfer multiple services, such as contracts for its subscription-based services and professional services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct, which involves the determination of the standalone selling price for each distinct performance obligation.
Deferred revenue results from amounts billed in advance to customers or cash received from customers in advance of the Company's fulfillment of its performance obligation(s) and is recognized as those obligations are satisfied.
Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Contract assets are generated when contractual billing schedules differ from revenue recognition timing.
Certain sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions incurred for obtaining new contracts are deferred and then amortized as selling and marketing expenses on a straight-line basis over a period of benefit that the Company has determined to be three years. The three-year amortization period was determined based on several factors, including the nature of the technology and proprietary data underlying the services being purchased, customer contract renewal rates and industry competition. Sales commissions that do not represent incremental costs of obtaining a contract, or that would otherwise be amortized over a period of one year or less, are not subject to capitalization.
See Note 3 for further discussion of the Company's revenue recognition.
Cost of Revenues
Cost of revenues principally consists of salaries, benefits, bonuses, stock-based compensation expenses and other indirect costs for the Company's researchers who collect and analyze the real estate data that is the basis for the Company's information, analytics and online marketplaces and for employees that support these products. Additionally, cost of revenues includes the cost of data from third-party data sources, product hosting costs and costs related to advertising purchased on behalf of customers, credit card and other transaction fees relating to processing customer transactions, which are expensed as incurred, and the amortization of acquired trade names, technology and certain other intangible assets.
Foreign Currency Translation
The Company’s reporting currency is the U.S. dollar. The functional currency for the majority of its operations is the local currency, with the exception of certain international locations for which the functional currency is the British Pound. Assets and
12


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect as of the balance sheet date. Gains and losses resulting from translation are included in accumulated other comprehensive loss. Currency gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature are also included in accumulated other comprehensive loss. Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in other income, net in the condensed consolidated statements of operations using the average exchange rates in effect during the period. The Company recognized a net foreign currency gain of $0.2 million and $0.8 million for the three months ended September 30, 2023 and 2022, respectively. The Company recognized a net foreign currency loss of $0.6 million for the nine months ended September 30, 2023 and a net foreign currency gain of $2.2 million for the nine months ended September 30, 2022.
Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss, net of tax, were as follows (in thousands):
September 30,
2023
December 31,
2022
Foreign currency translation loss$(28,311)$(29,075)
Total accumulated other comprehensive loss$(28,311)$(29,075)
There were no amounts reclassified out of accumulated other comprehensive loss to the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022.
Income Taxes
Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and the basis reported in the Company’s condensed consolidated financial statements. Deferred tax liabilities and assets are determined based on the difference between the financial statement and the tax basis of assets and liabilities using enacted rates in effect during the year in which the Company expects differences to reverse. Valuation allowances are provided against assets, including net operating losses, if the Company determines it is more likely than not that some portion or all of an asset may not be realized. Interest and penalties related to income tax matters are recognized in income tax expense.
The Company has elected to record the GILTI under the current-period cost method.
See Note 11 for further discussion of the Company's accounting for income taxes.
Net Income Per Share
Net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period on a basic and diluted basis.
13


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
The following table sets forth the calculation of basic and diluted net income per share (in thousands, except per share data):
Three Months Ended
September 30,
Nine Months Ended
September 30,

Numerator:
2023202220232022
Net income$90,574 $72,290 $278,225 $245,081 
Denominator:
Denominator for basic net income per share — weighted-average outstanding shares405,649 394,712 405,190 393,650 
Effect of dilutive securities:
Stock options, restricted stock awards and restricted stock units1,580 1,497 1,523 1,323 
Denominator for diluted net income per share — weighted-average outstanding shares407,229 396,209 406,713 394,973 
 
Net income per share — basic$0.22 $0.18 $0.69 $0.62 
Net income per share — diluted$0.22 $0.18 $0.68 $0.62 
The Company’s potentially dilutive securities include outstanding stock options, unvested stock-based awards, which include restricted stock awards that vest over a specific service period, restricted stock awards with a performance and market condition, restricted stock units and Matching RSUs awarded under the Company's MSPP. Shares underlying unvested restricted stock awards that vest based on a performance and a market condition that have not been achieved as of the end of the period are not included in the computation of basic or diluted earnings per share. Diluted net income per share considers the impact of potentially dilutive securities except when the inclusion of the potentially dilutive securities would have an anti-dilutive effect.
The following table summarizes the shares underlying the unvested performance-based restricted stock and anti-dilutive securities excluded from the basic and diluted earnings per share calculations (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Performance-based restricted stock awards681 621 681 621 
Anti-dilutive securities355 748 839 1,144 
Stock-Based Compensation
Equity instruments issued in exchange for services performed by officers, employees, and directors of the Company are accounted for using a fair-value based method and the fair value of such equity instruments is recognized as expense in the condensed consolidated statements of operations.
For stock-based awards that vest over a specific service period, compensation expense is measured based on the fair value of the awards at the grant date and is recognized on a straight-line basis over the service period of the awards, net of an estimated forfeiture rate. For equity instruments that vest based on achievement of both a performance and market condition, stock-based compensation expense is recognized over the service period of the awards based on the expected achievement of the related performance conditions at the end of each reporting period. If the Company's initial estimates of the achievement of the performance conditions change, the related stock-based compensation expense may fluctuate from period to period based on those estimates. If the performance conditions are not met, no stock-based compensation expense will be recognized, and any previously recognized stock-based compensation expense will be reversed. For awards with both a performance and a market condition, the Company estimates the fair value of each equity instrument granted on the date of grant using a Monte Carlo simulation model. This pricing model uses multiple simulations to evaluate the probability of achieving the market condition to calculate the fair value of the awards, which includes the recent market price and volatility of the Company's shares. When
14


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
determining the grant date fair value of all stock-based awards, the Company considers whether it is in possession of any material, non-public information that upon its release would have a material effect on its share price, and if so, whether the observable share price or expected volatility assumptions used in determining the fair value of the awards should be adjusted.
Stock-based compensation expense for stock options, restricted stock awards and restricted stock units issued under equity incentive plans, stock purchases under the ESPP, DSUs and Matching RSUs awarded under the MSPP included in the Company’s condensed consolidated statements of operations were as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Cost of revenues$3,744 $3,041 $10,649 $9,002 
Selling and marketing (excluding customer base amortization)2,394 1,957 6,983 5,605 
Software development4,497 3,158 12,858 9,262 
General and administrative11,264 9,982 33,280 30,228 
Total stock-based compensation expense$21,899 $18,138 $63,770 $54,097 
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company had no restricted cash as of September 30, 2023 and December 31, 2022.
Allowance for Credit Losses
The Company maintains an allowance for credit losses to cover its current expected credit losses on its trade receivables and contract assets arising from the failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables and historical write-off trends. Based on the Company’s experience, the customer's delinquency status, which is analyzed periodically, is the strongest indicator of the credit quality of the underlying trade receivables. The Company’s policy is to write off trade receivables when they are deemed uncollectible. A majority of the Company's trade receivables are less than 365 days outstanding.
Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on five portfolio segments. The determination of portfolio segments is based primarily on the qualitative consideration of the nature of the Company’s business operations and the characteristics of the underlying trade receivables, as follows:
CoStar Portfolio Segment - The CoStar portfolio segment consists of two classes of trade receivables based on geographical location: North America and International.
Information Services Portfolio Segment - The Information Services portfolio segment consists of four classes of trade receivables: CoStar Real Estate Manager; Information Services, North America; STR, North America; and STR, International.
Multifamily Portfolio Segment - The Multifamily portfolio segment consists of one class of trade receivables.
LoopNet Portfolio Segment - The LoopNet portfolio segment consists of one class of trade receivables.
15


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Other Marketplaces Portfolio Segment - The Other Marketplaces portfolio segment consists of two classes of trade receivables: Ten-X and other marketplaces.
The majority of Residential revenues is e-commerce-based, where payments are collected at the time of sale, and does not result in accounts receivable. Residential accounts receivable and the related allowance for credit losses are not material.
See Note 4 for further discussion of the Company’s accounting for allowance for credit losses.
Leases
The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at the commencement of the arrangement, at which time the Company also measures and recognizes an ROU asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. For the purposes of recognizing ROU assets and lease liabilities associated with the Company’s leases, the Company has elected the practical expedient to not recognize a ROU asset or lease liability for short-term leases, which are leases with a term of twelve months or less. The lease term is defined as the noncancelable portion of the lease term, plus any periods covered by an option to extend the lease if it is reasonably certain that the option will be exercised.
In determining the amount of lease payments used in measuring ROU assets and lease liabilities, the Company has elected the practical expedient not to separate non-lease components from lease components for all classes of underlying assets. Consideration deemed part of the lease payments used to measure ROU assets and lease liabilities generally includes fixed payments and variable payments based on either an index or a rate, offset by lease incentives. Upon commencement, the initial ROU asset also includes any lease prepayments. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The rates implicit within the Company's leases are generally not determinable. Therefore, the Company's incremental borrowing rate is used to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment and is determined at lease commencement and is subsequently reassessed upon a modification to the lease arrangement.
Lease costs related to the Company's operating leases are generally recognized as a single ratable lease cost over the lease term.
See Note 7 for further discussion of the Company’s accounting for leases.
Long-Lived Assets, Intangible Assets and Goodwill
Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company capitalizes interest on borrowings during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying asset and amortized over the estimated useful life of the asset. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company removes the cost and accumulated amortization of intangible assets as they become fully amortized.
Goodwill is tested annually for impairment by each reporting unit on October 1 of each year or more frequently if an event or other circumstance indicates that the Company may not recover the carrying value of the asset. The Company may first assess qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or elect to bypass such assessment. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, or the Company elects to bypass such assessment, the Company then determines the fair value of each reporting unit. The fair value of each reporting unit is compared to the carrying amount of the reporting unit. If the carrying value of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference.
Debt Issuance Costs
Costs incurred in connection with the issuance of long-term debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method for term debt and on a straight-line basis for revolving debt. The
16


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Company made a policy election to classify deferred issuance costs on the revolving credit facility as a long-term asset on its condensed consolidated balance sheets. Upon a refinancing or amendment, previously capitalized debt issuance costs are expensed and included in loss on extinguishment of debt if the Company determines that there has been a substantial modification of the related debt. If the Company determines that there has not been a substantial modification of the related debt, any previously capitalized debt issuance costs are amortized as interest expense over the term of the new debt instrument.
See Note 10 for further discussion of the Company's accounting for its outstanding debt, revolving credit facility and related issuance costs.
Business Combinations
The Company generally allocates the purchase consideration to the tangible assets acquired and liabilities assumed and intangible assets acquired based on their estimated fair values. The purchase price is, generally, determined based on the fair value of the assets transferred, liabilities assumed and equity interests issued, after considering any transactions that are separate from the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The Company applies significant assumptions, estimates and judgments in determining the fair value of assets acquired and liabilities assumed on the acquisition date, especially with respect to intangible assets and contingent liabilities. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer bases, acquired technology and acquired trade names, useful lives, royalty rates and discount rates. Any adjustments to provisional amounts that are identified during the measurement period are recorded in the reporting period in which the adjustment amounts are determined. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
For a given acquisition, the Company may identify certain pre-acquisition contingencies as of the acquisition date and may extend its review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether the Company includes these contingencies as a part of the fair value estimates of assets acquired and liabilities assumed and, if so, to determine their estimated amounts.
If the Company cannot reasonably determine the fair value of a pre-acquisition contingency (non-income tax-related) by the end of the measurement period, which is generally the case given the nature of such matters, the Company will recognize an asset or a liability for such pre-acquisition contingency if: (i) it is probable that an asset existed or a liability had been assumed at the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated. Subsequent to the measurement period, changes in the Company's estimates of such contingencies will affect earnings and could have a material effect on its results of operations and financial position.
In addition, uncertain tax positions and tax-related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. The Company reevaluates these items based upon facts and circumstances that existed as of the acquisition date with any adjustments to its preliminary estimates being recorded to goodwill, provided that the Company is within the measurement period. Subsequent to the measurement period, changes to these uncertain tax positions and tax-related valuation allowances will affect the Company's provision for income taxes in its condensed consolidated statements of operations and comprehensive income and could have a material impact on its results of operations and financial position.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASC 848 contains optional expedients and exceptions for applying GAAP to debt, contracts, hedging relationships and other transactions affected by reference rate reform. The provisions of ASC 848 must be applied to all contracts that are accounted for under a Topic, Subtopic or Industry Subtopic for all transactions other than derivatives, which may be applied at a hedging relationship level. Originally, the guidance was effective for fiscal years beginning after January 1, 2021, including interim periods within those fiscal years. However, in response to the deferral of the cessation date for certain overnight LIBOR measures, the FASB issued ASU 2022-06 on December 21, 2022, which extends the sunset date of Topic 848 to December 31, 2024. The Company's 2020 Credit Agreement provides for a $750 million revolving credit facility and a letter of credit sublimit of $20 million, with interest rates previously benchmarked to LIBOR. The Company adopted this accounting pronouncement with the execution of the First Amendment to the 2020 Credit Agreement in
17


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
May 2023. This guidance provides an optional practical expedient that allows qualifying modifications to be accounted for as a debt modifications rather than be analyzed under existing guidance to determine if the modification should be accounted for as a debt extinguishment. In adopting this accounting standard, we have elected to apply this optional expedient. Adopting this accounting standard did not have a material impact on the Company's condensed consolidated financial statements and related disclosures.
See Note 10 for further discussion of the Company's accounting for its outstanding debt, revolving credit facility and related issuance costs.
3.REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregated Revenue
The Company provides information, analytics and online marketplaces to the commercial real estate industry, hospitality industry, residential industry and related professionals. Revenues by operating segment and type of service consist of the following (in thousands):
Three Months Ended September 30,
20232022
North AmericaInternationalTotalNorth AmericaInternationalTotal
CoStar$223,348 $10,012 $233,360 $203,657 $9,033 $212,690 
Information Services35,163 9,473 44,636 32,524 8,489 41,013 
Multifamily235,343  235,343 189,536  189,536 
LoopNet65,041 2,440 67,481 57,126 1,775 58,901 
Residential10,293  10,293 19,351  19,351 
Other Marketplaces33,556  33,556 35,430  35,430 
Total revenues$602,744 $21,925 $624,669 $537,624 $19,297 $556,921 

Nine Months Ended September 30,
20232022
North AmericaInternationalTotalNorth AmericaInternationalTotal
CoStar$658,734 $28,808 $687,542 $590,141 $27,764 $617,905 
Information Services99,476 28,710 128,186 93,306 23,424 116,730 
Multifamily670,331  670,331 547,372  547,372 
LoopNet189,488 6,793 196,281 164,417 5,228 169,645 
Residential36,154  36,154 57,565  57,565 
Other Marketplaces96,447  96,447 99,837  99,837 
Total revenues$1,750,630 $64,311 $1,814,941 $1,552,638 $56,416 $1,609,054 
18


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Deferred Revenue
Deferred revenue as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
BalanceBalance Sheet CaptionSeptember 30,
2023
December 31,
2022
Current portionDeferred revenue$97,583 $103,567 
Non-current portionLease and other long-term liabilities196 215 
Total deferred revenue$97,779 $103,782 

Changes in deferred revenue for the period were as follows (in thousands):
Balance at December 31, 2022
$103,782 
Revenues recognized in the current period from the amounts in the beginning balance(94,280)
New deferrals, net of amounts recognized in the current period88,235 
Effects of foreign currency42 
Balance at September 30, 2023
$97,779 
Contract Assets
Contract assets are generated when contractual billing schedules differ from revenue recognition timing and represent a conditional right to consideration for satisfied performance obligations that becomes a receivable when the conditions are satisfied. Contract assets as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
BalanceBalance Sheet CaptionSeptember 30,
2023
December 31,
2022
Current portionPrepaid expenses and other current assets$5,599 $3,953 
Non-current portionDeposits and other assets7,887 8,464 
Total contract assets$13,486 $12,417 
Revenues recognized from contract assets for the three and nine months ended September 30, 2023 were $0.2 million and $1.1 million, respectively. Revenues recognized from contract assets for the three and nine months ended September 30, 2022 were $0.8 million and $1.6 million, respectively.
Unsatisfied Performance Obligations
Remaining contract consideration for which revenue has not been recognized due to unsatisfied performance obligations was approximately $379 million at September 30, 2023, which the Company expects to recognize over the next five years. This amount does not include contract consideration for contracts with a duration of one year or less.
Commissions
Commissions expense is included in selling and marketing expense in the Company's condensed consolidated statements of operations. Commissions expense activity for the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):
19


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Commissions incurred$42,055 $40,511 $134,386 $115,749 
Commissions capitalized in the current period(28,119)(29,720)(93,147)(83,875)
Amortization of deferred commissions costs24,544 19,377 69,811 55,373 
Total commissions expense$38,480 $30,168 $111,050 $87,247 
The Company determined that no deferred commissions were impaired as of September 30, 2023 and 2022.
4.ALLOWANCE FOR CREDIT LOSSES
The following tables detail the activity related to the allowance for credit losses for trade receivables by portfolio segment (in thousands):
Nine Months Ended September 30, 2023
CoStarInformation ServicesMultifamilyLoopNetOther MarketplacesTotal
Beginning balance at December 31, 2022
$4,510 $1,051 $4,347 $1,396 $891 $12,195 
Current-period provision for expected credit losses
15,323 810 4,162 4,799 570 25,664 
Write-offs charged against the allowance, net of recoveries and other(12,201)(61)(763)(3,839)(84)(16,948)
Ending balance at September 30, 2023
$7,632 $1,800 $7,746 $2,356 $1,377 $20,911 
Nine Months Ended September 30, 2022
CoStarInformation ServicesMultifamilyLoopNetOther MarketplacesTotal
Beginning balance at December 31, 2021
$5,380 $1,820 $3,393 $1,968 $813 $13,374 
Current-period provision (release) for expected credit losses7,089 (703)4,032 3,000 50 13,468 
Write-offs charged against the allowance, net of recoveries and other(8,917)(198)(4,362)(4,031) (17,508)
Ending balance at September 30, 2022
$3,552 $919 $3,063 $937 $863 $9,334 
Credit loss expense is included in general and administrative expenses on the condensed consolidated statements of operations. Credit loss expense related to contract assets was not material for the nine months ended September 30, 2023 and 2022. The majority of the Residential portfolio segment revenue is e-commerce-based and does not result in accounts receivable.
20


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
5.ACQUISITIONS
Business Immo
In April 2022, the Company acquired Business Immo, a leading commercial real estate news service provider in France, for €5.8 million ($6.3 million), net of cash acquired, and the assumption of outstanding debt. As part of the Business Immo Acquisition, the Company recorded goodwill and intangible assets of $7.1 million and $3.9 million, respectively. The net assets of Business Immo were recorded at their estimated fair value. The Company retired the assumed debt in the second quarter of 2022. The impact of the Business Immo Acquisition on the Company's revenue and net income in the condensed consolidated statements of operations for the nine months ended September 30, 2023 and related pro forma financial information was not material.
6.INVESTMENTS AND FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. There is a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
As of September 30, 2023 and December 31, 2022, the Company's financial assets comprise Level 1 cash equivalents with original maturities of three months or less in the amount of $5.2 billion and $4.8 billion, respectively. The Company had no Level 2 or Level 3 financial assets measured at fair value.
The Company holds other financial instruments, including cash deposits, accounts receivable, accounts payable, accrued expenses and Senior Notes. The carrying value for such financial instruments, other than the Senior Notes, each approximated their fair values as of September 30, 2023 and December 31, 2022. The estimated fair value of the Company's outstanding Senior Notes using quoted prices from the over-the-counter markets, considered Level 2 inputs, was $0.8 billion as of September 30, 2023 and December 31, 2022.
7.LEASES
The Company has operating leases for its office facilities, data centers, and certain vehicles, as well as finance leases for office equipment. The Company's leases have remaining terms of less than one year to nine years. The leases contain various renewal and termination options. The period that is subject to an option to extend the lease is included in the lease term if it is reasonably certain that the option will be exercised. The period that is subject to an option to terminate the lease is included if it is reasonably certain that the option will not be exercised.
Lease costs related to the Company's operating leases included in the condensed consolidated statements of operations were as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Operating lease costs:2023202220232022
Cost of revenues$2,703 $2,439 $7,148 $7,848 
Selling and marketing (excluding customer base amortization)3,906 3,175 11,386 9,219 
Software development1,622 1,998 4,637 5,895 
General and administrative1,018 1,469 3,048 4,378 
Total operating lease costs$9,249 $9,081 26,219 $27,340 
The impact of lease costs related to finance leases and short-term leases was not material for the three and nine months ended September 30, 2023 and 2022.
21


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Supplemental balance sheet information related to operating leases was as follows (in thousands):
BalanceBalance Sheet LocationSeptember 30,
2023
December 31, 2022
Operating lease liabilities$121,672 $118,294
Less: imputed interest(8,754)(6,238)
Present value of lease liabilities112,918 112,056
Less: current portion of lease liabilitiesLease liabilities39,750 36,049
Long-term lease liabilitiesLease and other long-term liabilities$73,168 $76,007
Weighted-average remaining lease term in years4.03.6
Weighted-average discount rate3.5 %3.1 %
Balance sheet information related to finance leases was not material as of September 30, 2023 and December 31, 2022.
Supplemental cash flow information related to leases was as follows (in thousands):
Nine Months Ended
September 30,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases$30,934 $31,847 
ROU assets obtained in exchange for lease obligations:
Operating leases$27,957 $19,184 
8.GOODWILL
The changes in the carrying amount of goodwill by operating segment consist of the following (in thousands):
 North AmericaInternationalTotal
Goodwill, December 31, 2021$2,145,846 $175,169 $2,321,015 
Acquisitions, including measurement period adjustments(1)
3,401 7,095 10,496 
Effect of foreign currency translation (16,752)(16,752)
Goodwill, December 31, 20222,149,247 165,512 2,314,759 
Effect of foreign currency translation 554 554 
Goodwill, September 30, 2023$2,149,247 $166,066 $2,315,313 
__________________________
(1) North America goodwill recorded during the year ended December 31, 2022 relates to a measurement period adjustment for income taxes for Homes.com of $3.4 million. International goodwill recorded in connection with the Business Immo Acquisition was $7.1 million.
No impairments of the Company's goodwill were recognized during the three and nine months ended September 30, 2023 and 2022.
22


COSTAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
9.    INTANGIBLE ASSETS
Intangible assets consist of the following (in thousands, except amortization period data):
September 30,
2023
December 31,
2022
Weighted-
Average
Amortization
Period (in years)
Acquired technology and data$40,048 $40,422 5
Accumulated amortization(26,066)(20,693) 
Acquired technology and data, net13,982 19,729  
Acquired customer base464,462 464,242 10
Accumulated amortization(318,405)(287,051) 
Acquired customer base, net146,057 177,191  
Acquired trade names and other intangible assets247,285 247,361 13
Accumulated amortization(132,229)(114,975) 
Acquired trade names and other intangible assets, net115,056 132,386  
Intangible assets, net$275,095 $329,306  
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. No impairments of the Company's intangible assets were recognized during the nine months ended September 30, 2023 and 2022. During the nine months ended September 30, 2023, the Company removed $0.5 million of intangible assets that were fully amortized from the acquired intangible assets and accumulated amortization, which had no net impact on the Company's financial results.
During the third quarter of 2022, the Company decided to eliminate usage fees related to agent access to a Homesnap product charged to a specific customer class. This resulted in an acceleration of $16.3 million of amortization expense in the third quarter of 2022 for acquired customer base for this customer class.
10.LONG-TERM DEBT
The table below presents the components of outstanding debt (in thousands):
September 30,
2023
December 31,
2022
2.800% Senior Notes due July 15, 2030
$1,000,000 $1,000,000 
2020 Credit Agreement, due July 1, 2025  
Total face amount of long-term debt1,000,000 1,000,000 
Senior Notes unamortized discount and issuance costs(9,815)(10,790)
Long-term debt, net$990,185 $989,210 
Senior Notes
On July 1, 2020, the Company issued $1.0 billion aggregate principal amount of 2.800% Senior Notes due July 15, 2030. The Senior Notes were sold to a group of financial institutions as initial purchasers who subsequently resold the Senior Notes to non-U.S. persons pursuant to Regulation S under the Securities Act, and to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act at a purchase price equal to 99.921% of their principal amount. Interest on the Senior Notes is payable semi-annually in arrears on January 15 and July 15. The Senior Notes may be redeemed in whole or in part by the Company (a) at any time prior to April 15, 2030 at a redemption price equal to 100% of the principal amount of the Senior Notes, plus the Applicable Premium (as calculated in accordance with the indenture governing the Senior Notes), and any accrued and unpaid interest, if any, on the principal amount of Senior Notes being redeemed to, but excluding, the redemption date, and (b) on or after April 15, 2030 at a redemption price equal to 100% of the principal amount
23