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CoStar Group (CSGP) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Apr 28, 2026

Source: earnings call transcript

Executive summary

CoStar Group Q1 FY26 — Double-Digit Growth Continues, Homes.com Investment Delivering Strong ROI

CoStar Group delivered an exceptional quarter, extending its double-digit revenue growth streak to 60 quarters, driven by strong performance across its commercial and residential segments. The significant investment in Homes.com is yielding substantial returns for agent subscribers and driving consumer engagement, positioning the segment for accelerated monetization. The company is focused on leveraging AI and expanding sales force productivity to sustain growth and achieve its long-term EBITDA targets.

Highlights

5

  • Total revenue grew 23% year-over-year to $897 million, marking the 60th consecutive quarter of double-digit revenue growth.

  • Adjusted EBITDA doubled year-over-year to $132 million, exceeding the high end of guidance by $17 million.

  • Homes.com revenue grew 58% year-over-year to $26 million, with agent members increasing 205% from Q1 FY25 to 35,175.

  • Homes.com subscribers saw an average commission increase of $36,400 in their first year, representing an 11x ROI on the average $3,400 annual subscription cost.

  • The company repurchased 11.4 million shares for $505 million in Q1 FY26, part of a new $1.5 billion buyback program.

Concerns

4

  • Apartments.com revenue growth moderated to 10% year-over-year, despite strong engagement metrics.

  • Net new bookings of $67 million, while up 20% year-over-year, represented the third consecutive quarter of sequential decline.

  • Residential adjusted EBITDA was negative $29 million in Q1 FY26, though expected to turn positive in Q2 FY26.

  • The activist campaign over the last year weighed heavily on Homes.com sales and potential partnerships.

Guidance & targets

CategoryTargetConfidence
Q2 FY26 Revenue
$922 million to $932 million
high materiality
High
Q2 FY26 Commercial Revenue
$479 million to $484 million
medium materiality
High
Q2 FY26 Residential Revenue
$443 million to $448 million
medium materiality
High
Q2 FY26 Adjusted EBITDA
$160 million to $180 million
high materiality
High
Q2 FY26 Commercial Adjusted EBITDA
$160 million to $170 million
medium materiality
High
Q2 FY26 Residential Adjusted EBITDA
breakeven to $10 million
medium materiality
High
Q2 FY26 Adjusted EPS
$0.27 to $0.30 per share
high materiality
High
Full Year FY26 Revenue
$3.78 billion to $3.82 billion
high materiality
High
Full Year FY26 Commercial Revenue
$1.955 billion to $1.975 billion
medium materiality
High
Full Year FY26 Residential Revenue
$1.825 billion to $1.845 billion
medium materiality
High
Full Year FY26 Adjusted EBITDA
$780 million to $820 million
high materiality
High
Full Year FY26 Adjusted EPS
$1.32 to $1.39
high materiality
High
Homes.com Net Investment Target
$550 million
high materiality
High
Homes.com Pricing Strategy
Raise subscription fees for new customers
medium materiality
High
Homes.com Rental Tools Availability
Every tool available on Apartments.com will be available on Homes.com
low materiality
High
CoStar New Homes Module Launch
Phase 1 planned for Q2
low materiality
High
CoStar France Launch
Launches in Q2
low materiality
High
CoStar Australia and LoopNet Australia Launch
Q3 and Q4
low materiality
High
CoStar Real Estate Manager AI Lease Abstraction
Extend capabilities later this year
low materiality
High
OnTheMarket AI Search Functionality
Continue building in Q2
low materiality
High
Share Repurchase Program
$195 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Commercial
Revenue and adjusted EBITDA were in line with guidance. Organic growth was 7%.
Organic Growth Rate: 7%Adjusted EBITDA Margin: 34%
$472 million15%—$161 million
Residential
Revenue was at the high end of guidance. Adjusted EBITDA was better than guidance, though still negative.
Organic Growth Rate: 13%
$425 million32%—-$29 million
CoStar
Growth driven by both volume and price, with strong international growth. CoStar Debt Solutions crossed $100 million in revenue.
Annualized Net New Bookings (core product): up 16% year-over-yearUsers: 317,000 (up 22% year-over-year)Broker Sales: up 29% year-over-yearTenant Sales: up 27% year-over-yearNPS: 69Quarterly Renewal Rate: 92%
$331 million9%——
LoopNet
Growth attributable to increased paid listings from focus on selling silver ads. Asset-based pricing rolled out across U.S. markets.
Organic Growth Rate: 11%Paid Listings Growth (U.S.): 10% year-over-yearPaid Listings Growth (Canada): 35% year-over-yearPaid Listings Growth (U.K.): 63% year-over-yearSilver Listings Sold ($300+): grew 650% (Feb to March)Listings Sold (below $40): grew 1100% (Feb to March)Average Monthly Unique Visitors (Europe): over 900,000 (up 102% year-over-year)
$85 million16%——
Other Commercial
Year-over-year increase primarily due to inorganic contribution from Matterport acquisition.
Matterport Subscription Revenue Growth: 19%
$56 million81%——
Apartments.com
15th consecutive quarter of double-digit revenue growth. Smart Search users spend 94% more time on site and view 63% more listings.
Renter Visits: 220 millionTours: 370,000Applications Submitted: 300,000Matterport Tours: 40 millionMonthly Renewal Rate: 99%Brand Media Impressions: 1.7 billion (up 189% year-over-year)Unique Visitors (comScore): up 3% year-over-year (March)Sales Meetings: 185,000NPS: 89Matterport 3D Tours on Platform: 250,000Matterport 3D Exteriors: 1,500Time on Listings with Matterport: 46% moreTour Requests per Listing with Matterport: 56x more
$312 million10%——
Homes.com
Investment is delivering as expected, with accelerating membership growth and monetization. ROI for agents is significant. Fastest organic revenue build for a new product.
Member Agents: 35,175 (up 205% from Q1 FY25)Agents on Annual Contracts: 76%Net New Bookings: $11 millionMarch Annual Revenue Run Rate: $106 million (up 92% year-over-year)Trailing 12-month Average ARPU: $287Promoted Active Listings: 260,000 (8.7% of U.S. homes for sale)Organic Traffic: up 119% year-over-year (March)Average Annual Session Duration: up 26% year-over-year (March)Bounce Rate: down 29% (March)AI Users Searches: nearly 4x as manyAI Users Favorites: 7x as manyAI Users Leads: 7x as manyTime on Site (AI Users): 18 minutesTime on Site (Non-AI Users): 4 minutes, 32 secondsNew Homebuilders Signed: 663New Home Activity Coverage: 75% of U.S. productionPaid Single-Family Rental Listings Growth: 33% year-over-yearHomes.com Rental Visits Increase: 13 million (Q1 FY26 vs Q1 FY25)Independent Owners using Rental Tools: 214,000
$26 million58%——
Land.com
Boosted by replacing site-specific ads with county-targeted network ads.
Net New Bookings: up 126% year-over-year (record)Inventory: tripledAds Sold: quadrupled
—8%——
Domain Australia
Strong Q1 with sustained elevated audience volume and uptake of premium products. Discontinued SPA ads due to low profitability.
Core Residential Revenue Growth: 11% year-over-yearMonthly Unique Audience: 8 million (average), 8.4 million (March)Total Users: 21.9 million (up 47% year-over-year)Listings: up 28%
$68 million———
OnTheMarket
Eclipsed Zoopla as U.K.'s #2 portal by inventory and has more new home listings than Rightmove. Growth accelerated by signing Connells Group.
Positive Net New Bookings: 23rd consecutive monthTotal Time on Site: up 16% year-over-yearPage Views: up 24% year-over-yearLeads: up 23% year-over-yearEstate Agents and New Home Developer Customers: 17,500NPS: 46%
————
BizBuySell
Rapidly turning into a true end-to-end transaction platform with integrated financing, 3D tours, and document sharing.
Broker Subscribers: 2,345 completed sales transactionsEnterprise Value of Transactions: $2 billionTransactions Involving Commercial Real Estate: 59%Buyer Profiles: 24,000Broker Adoption: 15%
$8.8 million———

CSGP operating KPIs by quarter

CSGP operating KPIs stated on its earnings calls, by fiscal quarter
KPI Dec 2025 Q4 FY25This call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Monthly renewal rate Apartments.com
99% This increase in properties, coupled with our 99% monthly renewal rate and 92 NPS confirms that property owners and managers understand the value of the Apartments.com site built specifically for the apartment industry. Source: earnings call transcript
—
99% Apartments ended the quarter with nearly 93,000 paid properties, up 12% year-over-year, sustaining 18 months of adding approximately 1,000 paid properties each month with monthly renewal rates holding strong at 99%. Source: earnings call transcript
—
Promoted active listings Homes.com
216K Homes.com subscribers paid to promote 216,000 active listings, representing 9.4% of 2.3 million homes for sale in the US in Q4 '25. Source: earnings call transcript
260K Homes.com subscribers paid to promote 260,000 active listings in Q1, representing 8.7% of the nearly 3 million homes for sale in the US In 2025, the Homes.com network grew nearly 2.1 billion views and 108 million average monthly unique visitors. Source: earnings call transcript
<305K Subscribers paid to promote close to 305,000 active listings in Q2. Source: earnings call transcript
—
Agent subscribers Homes.com
31K+ We now have over 31,000 agent subscribers generating $100 million in annualized revenue run rate with 76% of them on annual contracts. Source: earnings call transcript
—
36K+ We now have over 36,000 agent subscribers, up 107% from a year ago. Source: earnings call transcript
—
Contract renewal rate —
89% Our contract renewal rate has held consistently at 89% for the past 7 quarters. Source: earnings call transcript
89% Our contract renewal rate remains strong at 89%, with customers of five years or more renewing at 94% Subscription revenue on annual contracts was 72% for the second quarter, consistent with post-domain acquisition subscription rates. Source: earnings call transcript
0 pt
Renewal rate Customers with 5+ Years Subscription
95% Our contract renewal rate was 89% in the fourth quarter of 2025, and customers who have been subscribers for 5 years or longer have a 95% renewal rate. Source: earnings call transcript
95% Customers who have been subscribers for at least 5 years have an impressive 95% renewal rate. Source: earnings call transcript
94% Our contract renewal rate remains strong at 89%, with customers of five years or more renewing at 94% Subscription revenue on annual contracts was 72% for the second quarter, consistent with post-domain acquisition subscription rates. Source: earnings call transcript
-1 pt
Net new bookings
$75M Net new bookings for the fourth quarter were $75 million, a 42% year-over-year increase. Source: earnings call transcript
$67M Q1 net bookings of $67 million were up 20% year-over-year. Source: earnings call transcript
$69M Net new bookings for the quarter were $69 million, up 3% from the first quarter. Source: earnings call transcript
+3%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

eXp Realty Expanded partnership for premarket listings on Homes.com

Expanded relationship in April 2026, allowing eXp's 3,000 agents to prominently display premarket coming soon listings on Homes.com. Follows a December 2024 partnership with eXp Commercial.

Connells Group Signed as a customer for OnTheMarket

Connells Group, the U.K.'s largest estate agent with over 80 brands and 1,200 branch locations, signed with OnTheMarket, accelerating its growth.

Risks & headwinds

Activist Campaign Distraction last year

weighed heavily on Homes.com sales and potential partnerships

Mitigation:The distraction is now behind us, allowing for more focused energy on accelerating revenue across the portfolio.

Soft Rental Search Demand current

overall rental search demand remains soft

Mitigation:Apartments.com network unique visitors still up 3% YoY in March, outperforming competitors (Zillow down 5%, Zillow+Realtor+Redfin down 3%).

Market Cyclicality (Australia) Q1 FY26

The Australian market is highly cyclical and Q1 is always seasonally soft

Mitigation:Despite seasonality, core Domain Residential revenue grew 11% YoY, and EBITDA growth was delivered despite significant investments.

What to watch in Q2 FY26

Residential Adjusted EBITDA

Q2 FY26
Current -$29 million
Target positive (breakeven to $10 million)

Why it matters

This indicates the Residential segment's path to profitability, a key milestone for the Homes.com investment.

Residential adjusted EBITDA is anticipated to be positive in Q2 2026, ranging between breakeven and $10 million.

Find out whether CSGP delivers this. Inve re-checks your case every morning.

Q&A highlights

How do Q1 net new bookings align with expectations, and how should investors translate bookings into revenue growth, considering the mix of subscription vs. non-subscription revenue and the 15% revenue CAGR target?

Q1 bookings were broadly in line with expectations, supporting reaffirmed revenue and increased EBITDA guidance. Approximately 15% of revenue is non-subscription. For FY26, about 40% of the revenue increase is from acquisitions/non-subscription, with the remaining $330M driven by net new bookings. For FY27-28, subscription revenue needs to grow by $1B, with Homes.com growing significantly faster than other brands. The company is committed to 2028/2030 adjusted EBITDA targets, achievable through 15% revenue CAGR, investing in growth, or cost rationalization.

“We are committed to delivering on the adjusted EBITDA targets we set out for 2028 and 2030. And this can occur in a number of ways. We can deliver it through our 15% revenue CAGR, which we're very committed to.”

asked by Ryan Tomasello · answered by Christian Lown

2 min read 6 chapters

Detailed narrative

Homes.com Performance and Strategy

Homes.com is delivering on its investment thesis, with revenue up 58% YoY to $26 million in Q1. Agent membership grew 205% from Q1 FY25 to 35,175, with 76% on annual contracts. The March annual revenue run rate reached $106 million, up 92% YoY. Analysis shows Homes.com subscribers earned an average of $36,400 more in commissions in their first year, an 11x ROI on the average $3,400 annual subscription. This strong performance supports a planned price increase for new customers on May 1 and evaluation of renewal increases.

AI Innovation and Engagement

AI is a significant driver of engagement and future innovation. Homes AI users run nearly 4x as many searches, favorite 7x as many properties, and submit 7x as many leads, spending 18 minutes on site compared to 4 minutes 32 seconds for non-AI users. Apartments.com introduced Smart Search, an AI-powered voice search, with users spending 94% more time and viewing 63% more listings. Apartments AI, a conversational search experience, will launch ahead of the June Apartmentalize trade show.

International Expansion and Product Development

CoStar is expanding its international footprint with strong growth in the U.K. (revenue up 25%, net new bookings up 44%) and Canada (revenue up 22%). CoStar France is set to launch in Q2, leveraging 32,000 existing subscribers from Business Immo. CoStar and LoopNet are expected to launch in Australia in Q3 and Q4. New products like CoStar Rent Benchmark and CoStar New Homes (Phase 1 in Q2) are in development, enhancing data offerings and market insights.

Sales Force Productivity and Growth

The company is focused on enhancing sales force productivity across all brands. Total sales headcount at the end of March was 2,090, with Homes.com having the largest team at 570 reps. Productivity is building, especially from sales reps hired in 2025. The company plans to add 50 more field sales personnel for Homes.com in batches of 5 cities and continue growing field sales teams for Apartments.com and LoopNet, as these roles consistently demonstrate higher productivity.

Matterport Integration and Differentiation

Matterport is proving to be a critical differentiator, driving engagement and conversion across CoStar Group platforms. Subscription revenue for Matterport was up 19% YoY, with new enterprise accounts up 31% YoY in March. Matterport listings on Apartments.com see 46% more time on site and 56x more tour requests. The company is refocusing Matterport towards professional users with higher SaaS subscriptions and is aggressively developing new features like Matterport Exteriors with X-ray.

Share Repurchase Program

CoStar Group completed its first share repurchase program in 2025, buying back $500 million worth of stock (7.1 million shares). A new $1.5 billion buyback program was announced in January 2026. In Q1 FY26, the company repurchased 11.4 million shares for $505 million, primarily through an accelerated share repurchase plan. An additional $195 million is expected to be repurchased in the remaining 9 months of 2026, totaling $700 million for the year.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.