CSGP Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

Revenue: $897 million, up 23% year-over-year, aligning with guidance.
Adjusted EBITDA: $132 million, doubling from Q1 2025 and exceeding guidance by $17 million.
Net New Bookings: $67 million, a 20% increase year-over-year.
Commercial Revenue: $472 million, a 15% increase year-over-year.
Residential Revenue: $425 million, a 32% increase year-over-year.
Adjusted EPS: $0.23, significantly higher than guidance.
Sales Headcount: 2,090 total, with Homes.com having the largest team at 570.

2. Strategic Updates and Business Highlights

Homes.com: Revenue grew 58% year-over-year to $26 million, with a significant increase in agent subscriptions and engagement metrics. The platform is now the fastest-growing residential portal in the U.S.
CoStar Products: Strong performance with CoStar revenue at $331 million, and a 22% increase in users. New products like CoStar rent benchmarks and debt solutions are in development.
Matterport Integration: Continued growth with a 19% increase in subscription revenue, enhancing engagement across CoStar platforms.
International Growth: CoStar U.K. revenue up 25%, and CoStar Canada revenue up 22% year-over-year.
LoopNet: Revenue rose 16% year-over-year, driven by increased paid listings and successful implementation of asset-based pricing.

3. Forward Guidance and Outlook

Q2 2026 Guidance: Expected revenue of $922 million to $932 million, representing an 18% to 19% increase year-over-year. Adjusted EBITDA expected between $160 million and $180 million.
Full-Year 2026 Guidance: Revenue reaffirmed at $3.78 billion to $3.82 billion, with adjusted EBITDA expected to range from $780 million to $820 million, reflecting a margin increase.

4. Bad News, Challenges, or Points of Concern

Sales Productivity: Despite hiring increases, there are concerns about the productivity of the sales force, particularly at Homes.com, which has a relatively inexperienced team.
Sequential Decline in Net Bookings: This marks the third consecutive quarter of sequential decline, raising questions about future revenue growth.
Competitive Pressures: The competitive landscape remains challenging, particularly in the Apartments.com segment, where pricing strategies may impact bookings.
Market Conditions: General rental search demand remains soft, which could affect future growth.

5. Notable Q&A Insights

Bookings Guidance: The company does not provide specific bookings guidance but emphasized the importance of transparency regarding Homes.com bookings.
Sales Strategy: The focus will be on increasing field sales resources, particularly for Homes.com and Apartments.com, to improve productivity and capture more market share.
Pricing Strategy: Plans to raise subscription fees for new Homes.com customers were discussed, with confidence in the platform's value proposition.
Matterport's Role: Matterport is seen as a critical differentiator, enhancing user engagement across platforms and driving value for customers.

Overall, CoStar Group demonstrated strong financial performance in Q1 2026, with significant growth in revenue and EBITDA, while also outlining strategic initiatives for continued expansion. However, challenges related to sales productivity and competitive pressures remain areas of concern.

CSGP — CoStar Group, Inc.