US ▾
CSCSGP

CoStar Group (CSGP) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Jul 28, 2026

Source: earnings call transcript

Executive summary

CoStar Group Q2 FY26 — Profitability Inflection and Strong EBITDA Growth

CoStar Group achieved a significant profitability inflection in Q2 FY26, with adjusted EBITDA more than doubling year-over-year and the residential segment turning profitable for the first time. The company is affirming its full-year adjusted EBITDA guidance, reflecting successful expense management and strategic optimizations in its sales forces. While these actions moderated near-term revenue growth, management believes they position the businesses for increased long-term profitability and sustained growth.

Highlights

5

  • Adjusted EBITDA more than doubled year-over-year to $184 million, the second highest quarterly level in company history.

  • Residential segment achieved positive adjusted EBITDA of $12 million for the first time, driven by strong revenue growth of 33% year-over-year to $440 million.

  • CoStar Debt Solutions delivered its best quarter ever with over $4 million in net new monthly bookings, up 96% year-over-year.

  • Homes.com monthly cancel rate dropped to a record low of 2.4% in June, down from 6.5% in June 2025, indicating strong agent ROI.

  • Apartments.com delivered 2.5x lead-to-lease conversion rate compared to its next closest competitor, maintaining price integrity despite competitive discounting.

Concerns

5

  • Net new bookings for the quarter were $69 million, up 3% sequentially but down roughly 26% year-over-year, primarily due to Ten-X restructuring and Homes.com sales force optimization.

  • Ten-X revenue declined by $4 million in Q2 due to restructuring efforts, partially offsetting commercial revenue growth.

  • Apartments.com average revenue per property was down 3.6% year-over-year, primarily due to a mix shift in sales to smaller communities.

  • The multifamily market is stressed with elevated supply, widespread concessions (40% of communities), and increased price sensitivity among property owners.

  • Homes.com sales force was reduced from 660 reps at the end of Q4 2025 to approximately 400, impacting near-term revenue growth as the company optimizes for productivity.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Adjusted EBITDA
$780 million to $820 million
high materiality
High
Full-year 2026 Adjusted EPS
$1.32 to $1.39
high materiality
High
Full-year 2026 Revenue
$3.715 billion to $3.755 billion
high materiality
High
Full-year 2026 Commercial Revenue
$1.94 billion to $1.96 billion
medium materiality
High
Full-year 2026 Residential Revenue
$1.775 billion to $1.795 billion
medium materiality
High
Q3 2026 Revenue
$935 million and $945 million
high materiality
High
Q3 2026 Commercial Revenue
$489 million to $494 million
medium materiality
High
Q3 2026 Residential Revenue
$446 million to $451 million
medium materiality
High
Q3 2026 Adjusted EBITDA
$190 million to $210 million
high materiality
High
Q3 2026 Commercial Adjusted EBITDA
$162 million and $172 million
medium materiality
High
Q3 2026 Residential Adjusted EBITDA
$28 million to $38 million
medium materiality
High
Q3 2026 Adjusted EPS
$0.31 to $0.34
high materiality
High
Total Share Repurchases
$700 million
medium materiality
High
Matterport 4 Delivery
late '27
low materiality
Medium
CoStar Australia Launch
second half of this year
low materiality
High
LoopNet Australia Release
late 2027
low materiality
Medium
Australian Noncore Software Divestitures
finalize all divestitures by the end of 2026
low materiality
High
Homes.com Platinum Marketing Tier Rollout
third quarter
medium materiality
High
Homes.com Revenue from Depth Advertising
majority
medium materiality
Medium
Homes.com Independent Owner Tools
every tool... also be available on Homes.com
low materiality
High
Zonda Acquisition Close
second half of this year
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Commercial
Revenue growth was partly offset by Ten-X restructuring. Adjusted EBITDA up 7% year-over-year.
Adjusted EBITDA: $172 millionAdjusted EBITDA Margin: 36%
$481 million8%—$172 million
Residential
Achieved positive adjusted EBITDA for the first time since Q1 2024. Revenue was $444 million, up $19 million sequentially.
Adjusted EBITDA: $12 million
$440 million33%—$12 million
CoStar
Strong growth in revenue and subscriber base. CoStar Debt Solutions delivered best quarter ever.
Net New Bookings Acceleration: 24%Renewal Rates: 93%NPS: 68Net New Bookings to Brokers: 48% year-over-yearSubscribers: 327,000Subscriber Growth: 19% year-over-year
$337 million9%——
CoStar Debt Solutions
Delivered its best quarter ever, applying benchmarking expertise from STR.
Net New Monthly Bookings: >$4 millionNet New Monthly Bookings Growth: 96% year-over-yearLender Clients: 300Active Loans Contributed: >100,000Outstanding Debt Contributed: >$1.2 trillion
————
Ten-X
Restructuring for future growth and cost control, leading to a revenue decline. Will be separated from LoopNet with dedicated sales, marketing, and leadership.
Revenue Decline: $4 millionCost Reduction Year-to-Date: $7 million
————
Matterport
Performed well, with subscription revenue growth in the high teens. New pricing plan to accelerate adoption and subscription revenue growth.
Subscription Revenue Growth: 16% year-over-yearEnterprise Customer Acquisition: All-time best month in June
————
LoopNet
Continued momentum in paid listings and sales force expansion. Investment in Wikicasa adds Italian coverage.
Paid Listings (U.S.): 220,000Paid Listings Growth (U.S.): 9% year-over-yearPaid Listings Growth (Canada): 24% year-over-yearPaid Listings Growth (U.K.): 52% year-over-yearSales Force: 225 repsSales Force Growth: Up from 191 a year agoEuropean Revenue Growth: 10% year-over-yearAverage Monthly Unique Visitors (Europe): Up 88%
$87 million14%——
STR
Strong Q2 performance, with growth driven by market expansion. Continued expansion despite Iran conflict.
Net New Revenue from New Logos: Nearly 70%New Logos Landed: 261 globally
————
BizBuySell
Moderate revenue growth, expanding with benchmarking tools and SBA lender partnerships.
Buyer Profiles: >32,000 totalBuyer Profiles Added (Q2): 8,700
—5%——
Apartments.com
Continued growth despite competitive distortions and multifamily market stress. AI integration showing strong early engagement and conversion improvements.
Gross Sales (June): Third highest in historyPaid Properties: 93,000Paid Properties Growth: 12% year-over-yearMonthly Renewal Rates: 99%Average Revenue per Property: Down 3.6% year-over-yearLead-to-Lease Conversion: 2.5x next closest competitorSales Meetings (Q2): 196,000NPS: 88Renter Visits: 228 millionTraffic Growth (June): 7% year-over-yearUnaided Consumer Awareness: 66%AI Sessions: ~0.5 millionAI User Site Time: 3x non-AI rentersAI User Listings Viewed: 2x non-AI rentersAI User Time per Listing: 40% moreAI 3D Tour Usage: Up 225%AI Traffic to Lead Conversion: Up 256%
$318 million9%——
Homes.com
Strong revenue and subscriber growth. Sales force optimized for efficiency. Platinum marketing tier to launch in Q3.
Annualized Run Rate: $116 millionAnnualized Run Rate Growth: 78% year-over-yearAgent Subscribers: 36,000Agent Subscriber Growth: 107% year-over-year12-month Trailing ARPU: ~$265Average Subscriber Price (June): $305Listings Promoted: 305,000Listings Promoted (% of US homes for sale): 9.3%Member Agent Listings Growth: 92% year-over-yearMonthly Cancel Rate (June): 2.4%Organic Traffic Growth Year-to-Date: 115%Average Session Duration Growth (June): 52% year-over-yearBounce Rate: 34%Sales Reps: ~400Sales Rep Productivity Increase: 19%
$28.5 million66%——
Domain (Australia)
Strong Q2, with record upgrade activity and positive response to Matterport integration. Program to divest noncore software assets progressing.
Core Residential Revenue Growth (excluding developers, agent solutions, print): 15% year-over-yearAverage Monthly Visits: 41 millionAverage Monthly Visits Growth: 35% year-over-year
—9%——
OnTheMarket (U.K.)
Became the second largest property portal in the U.K. by inventory. Strong engagement and lead growth.
Total Property Inventory Growth: 12%Net New Bookings: 26th consecutive month of positiveLeads Growth (H1): 14%Average Engagement Growth (Q2): 43% year-over-yearPages Viewed per Active User Growth: 64%Total Time on Site Growth: 16%
————
Land.com
Consistent revenue growth and strong performance in sales and signature ads.
First Half Sales Net New Bookings Growth: 22%Signature Ads Growth: 55% year-over-year
—9%——

CSGP operating KPIs by quarter

CSGP operating KPIs stated on its earnings calls, by fiscal quarter
KPI Dec 2025 Q4 FY25 Mar 2026 Q1 FY26This call 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

Zonda Leading provider of new home construction data, analytics software, and online marketplaces.

Zonda serves over 3,000 builders, developers, lenders, manufacturers, and suppliers across North America. Announced agreement in May.

Wikicasa Investment to add Italian coverage to LoopNet.

Partnered with dozens of Italy's largest brokerage firms. Wikicasa lists over 100,000 commercial real estate listings from more than 12,000 broker branches.

ChatGPT Partnership for Apartments.com, expanding to 500 markets.

Apartments.com launched a ChatGPT partnership in 100 markets in April and expanded to 500. Criteo reports greater visibility for Apartments.com than any other competitor.

Capital programs

Richmond Headquarters Campus completed

Benefit:Scalable from 2,500 employees today to 4,000

Delivered on schedule and under budget. Consolidates nearly a dozen scattered spaces into one facility. Positioned for future sale-leaseback to unlock liquid capital.

Risks & headwinds

Net new bookings decline Q2 FY26

Down roughly 26% year-over-year to $69 million in Q2

Mitigation:Strategic decisions to drive efficiencies in Homes.com sales force, restructuring at Ten-X, new product launches on commercial side, continued sales force expansion.

Ten-X restructuring impact Q2 FY26

Revenue declined by $4 million in Q2; represented roughly 25% of the revenue guidance change

Mitigation:Restructuring business for future growth and cost control; separating Ten-X from LoopNet with dedicated sales, marketing, and leadership.

Multifamily market stress and competition Q2 FY26 and ongoing

Elevated supply, 40% of communities offering concessions, average revenue per property down 3.6% YoY for Apartments.com

Mitigation:Maintaining price integrity based on 2.5x lead-to-lease conversion rate; focusing on ROI for customers; leveraging AI to improve lead-to-lease conversion.

Homes.com sales force optimization Q2 FY26

Reduced inside sales reps from 660 to ~400; average sales headcount reduced by 21% sequentially

Mitigation:Focusing on productivity and efficiency, retaining top producers, expanding field sales team for higher productivity, launching Platinum marketing tier.

Regulatory and legal challenges for Zillow Pending

FTC and multiple state attorney generals suing Zillow for alleged unlawful agreement; CoStar Group suing Zillow for unauthorized use of copyrighted photographs

Mitigation:CoStar Group believes its ROFR product will win out over the medium term due to superior performance and product quality.

Iran conflict impact on STR Middle East expansion Q2 FY26 and ongoing

Weighing on the Middle East

Mitigation:Continued expansion with Alistithmar in Saudi Arabia and secured a significant Indian win with Samhi Hotel Investments.

What to watch in Q3 FY26

Homes.com Platinum Marketing Tier Launch

Q3 FY26
Current Not yet launched
Target Successful rollout and initial revenue contribution

Why it matters

This is Homes.com's first depth advertising offering, expected to be priced at multiples over standard listings and generate the majority of future Homes.com revenue.

In the third quarter, we plan to roll out our platinum marketing tier, Homes.com's first step advertising offering.

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

Q&A highlights

Net new bookings were down 26% YoY in Q2. What are the primary drivers of this decline, particularly in specific product lines or end markets, and what gives confidence in future bookings growth?

The decline was partly due to strategic decisions to drive efficiencies in Homes.com sales force and restructuring at Ten-X, which is a transactional business. Apartments.com faced competition but maintained strong performance. Confidence in growth comes from new product launches on the commercial side, continued expansion of sales forces, and the upcoming launch of depth advertising for Homes.com.

“As was mentioned, we gave you a net new bookings for Homes.com. We continue to scale that business. We made a very strategic decision to drive efficiencies and improve profitability and performance of that sales force. So that will continue to grow.”

asked by Keen Fai Tong · answered by Christian Lown

2 min read 6 chapters

Detailed narrative

Profitability Inflection and Expense Management

CoStar Group achieved a significant profitability inflection in Q2 2026, with adjusted EBITDA more than doubling year-over-year to $184 million, marking the second-highest quarterly level in company history. This was driven by stringent focus on expense management, particularly in personnel and operating expenses, and efficiency gains, including early benefits from AI. The company reduced its projected 2026 expense base by approximately $100 million, establishing a new baseline for expenses that is expected to benefit future quarters and contribute to achieving long-term adjusted EBITDA targets.

Residential Segment Achieves Profitability

The residential segment generated a record adjusted EBITDA of $12 million in Q2 2026, marking its first quarter of profit since the launch of Homes.com in Q1 2024. This was supported by 33% year-over-year revenue growth to $440 million. The company expects continued growth and margin expansion in this segment as it focuses on monetizing investments and driving profitable growth, despite competitive pressures and market stress in the multifamily rental marketplace.

Strategic Sales Force Optimization

CoStar is optimizing its sales force across segments for productivity and efficiency. Homes.com reduced its inside sales reps from 660 at the end of Q4 2025 to approximately 400, while retaining top producers and expanding its field team to 50 reps in five major metros. This shift aims to leverage the higher productivity observed in field sales, similar to Apartments.com and CoStar, and is expected to drive better long-term results despite moderating near-term revenue growth. Productivity per rep at Homes.com increased by 19%.

Product Innovation and International Expansion

The company launched four major product initiatives on the core CoStar platform in Q2, including CoStar Rent Benchmark (AI-abstracted leases), CoStar in France (covering 290,000+ properties), public record search in the U.K., and AI-powered lease abstraction for CoStar Real Estate Manager. International expansion continues with CoStar Australia launch in H2 2026 and Matterport integrated with Domain in Australia. The Matterport 4 camera prototypes have been produced, targeting late 2027 delivery with enhanced accuracy and resolution.

AI Integration and Cost Efficiency

CoStar is actively integrating AI across its platforms, including Apartments.com AI for conversational search and AI-powered lease abstraction. Early results from Apartments.com AI show users spending 3x longer on site, viewing 2x more listings, and a 256% increase in traffic to lead conversion. The company reports that AI initiatives are currently generating more cost savings than token cost increases, with token consumption below budget, indicating a positive impact on overall profitability and efficiency.

Richmond Headquarters and Capital Strategy

The consolidated headquarters campus in Richmond, Virginia, was delivered on schedule and under budget, designed to scale from 2,500 to 4,000 employees with limited capital cost. This strategic deployment of capital eliminates fragmented lease costs, enhances employee efficiency, and creates substantial equity value. The company plans to replicate a successful sale-leaseback playbook from its former D.C. headquarters, potentially unlocking hundreds of millions in liquid capital for acquisitions or share buybacks while retaining operational control.

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