CoStar Group (NASDAQ:CSGP) reported fourth-quarter and full-year 2025 results that management said capped a record year for bookings and set the stage for meaningful margin expansion in 2026 as investment levels moderate following the national brand launch of Homes.com.
Financial results and 2026 outlook
Founder and CEO Andy Florance said fourth-quarter revenue rose 27% year-over-year to $900 million, while full-year 2025 revenue increased 19% to $3.2 billion. Florance noted the company has now delivered its “59th consecutive quarter of double-digit revenue growth.”
CFO Chris Lown said 2025 revenue and adjusted EBITDA both came in above expectations, citing higher-than-expected contributions from CoStar, Matterport, and Domain, as well as lower-than-anticipated personnel costs. The company posted $7 million of net income for 2025, which Lown said was above the high end of the firm’s prior guidance range.
For 2026, management reaffirmed guidance previously provided on January 7. The company expects revenue of $3.78 billion to $3.82 billion (16% to 18% growth) and adjusted EBITDA of $740 million to $800 million (20% to 21% margin). First-quarter 2026 revenue is expected to be $890 million to $900 million, with adjusted EBITDA of $95 million to $115 million.
Lown also guided to substantial intra-year margin improvement, stating adjusted EBITDA margins are expected to increase by roughly five percentage points each quarter throughout 2026, reflecting marketing that is weighted to the first half of the year and Domain’s seasonal revenue pattern.
New segments: Commercial and residential
CoStar revised its reporting into two segments: commercial and residential. Lown said the change aligns with how management views and manages the business and will be the framework used going forward.
- Commercial segment: 2025 revenue totaled $1.79 billion, up 18% year-over-year. Lown said the 2025 acquisitions of Matterport and Domain contributed about 10 percentage points of that growth.
- Residential segment: 2025 revenue totaled $1.46 billion, up 20% year-over-year, with 12% organic growth.
For 2026, CoStar expects commercial revenue of $1.955 billion to $1.975 billion and residential revenue of $1.825 billion to $1.845 billion. The company guided to 2026 adjusted EBITDA margins of 33% to 34% for commercial and 5% to 7% for residential, citing significant investment across commercial initiatives and ongoing spending in residential, particularly earlier in the year.
Bookings, salesforce expansion, and buybacks
Florance said CoStar delivered its strongest year ever for annualized net new sales bookings in 2025, reaching $308 million, up 23% from 2024. Fourth-quarter net new bookings were $75 million, up 42% year-over-year. In response to an analyst question about the quarter’s bookings, Lown pointed to the investor deck and said the fourth-quarter result was the company’s second-highest fourth-quarter net new bookings since 2015.
Management emphasized continued investment in sales capacity. Lown said the company ended 2025 with a sales force of 2,175 people, up by nearly 800 year-over-year, including 185 representatives from acquisitions. Florance said newly hired reps typically ramp over multiple years, adding that reps with five years of experience can produce “two to three times” what they did in their first year.
On capital return, Lown said CoStar completed its $500 million share repurchase program in 2025, buying back 7.1 million shares. The board has authorized a new $1.5 billion repurchase program, and the company expects to repurchase $700 million of shares in 2026, including a planned $500 million accelerated share repurchase in the current quarter and $200 million of open-market repurchases through the rest of the year.
Commercial operations: market recovery, product launches, and international expansion
Florance said CoStar’s commercial real estate businesses (including CoStar, LoopNet, Real Estate Manager, Ten-X, BizBuySell, and elements of Matterport) generated $471 million of revenue in the fourth quarter and $1.79 billion for the full year, pointing to improving market fundamentals. He cited two consecutive quarters of positive office absorption, dropping vacancies, and commercial sales volumes that have climbed 30% year-over-year and are now above long-term averages.
Within the CoStar suite, Florance highlighted a 20% year-over-year increase in the CoStar sales team to 492 reps, an all-time-high net promoter score of 70, and a 94% quarterly renewal rate. He said CoStar surpassed 300,000 subscribers (up 26% year-over-year in Q4) and logged 422 million total searches (up 14%).
Florance discussed international progress and plans, including profitability in Canada and the U.K., and said a U.K. competitor, EG Radius, shut down in December 2025; CoStar onboarded 166 of the competitor’s reported clients, with 75% signing three-year deals. He said CoStar France is expected to be released in the second quarter, and the company is staffing research and photography teams in Australia with a product launch planned for late 2026.
Management also outlined multiple commercial product initiatives, including a Rent Benchmark product expected in the second quarter, a new dataset covering nearly 4,000 data centers worldwide, and an expansion of CoStar Debt Solutions. Florance said CoStar Debt Solutions has surpassed a $100 million annual run-rate revenue level, with debt benchmarking expected in the second half of the year and loan origination planned for the first quarter of 2027.
LoopNet, Florance said, generated $312 million in 2025 revenue and delivered 17% year-over-year growth in the fourth quarter, its fastest growth since 2021. He said the company plans to add 80 LoopNet sales reps in 2026, expanding the team by 43%.
Residential: Apartments.com strength, Homes.com scale-up, and Homes AI
In residential, Florance said segment revenue was $429 million in the fourth quarter, up 35% year-over-year, and $1.46 billion for the year, up 20%. He said the residential business is projected to be profitable in 2026.
Apartments.com generated $308 million in fourth-quarter revenue (up 11%) and $1.25 billion for the full year. Florance cited 67% brand awareness in December, 89,275 paying properties at year-end (after adding nearly 14,000 properties in 2025), a 99% monthly renewal rate, and a 92 NPS. He also described a marketing campaign that delivered more than 12 billion media impressions and included a Super Bowl ad co-branding Apartments.com with Homes.com.
Homes.com, Florance said, became the fastest-growing residential portal in the U.S. within two years, with the Homes.com network posting over 2.1 billion views in 2025 and averaging 100 million monthly unique visitors. He said Homes.com has over 31,000 agent subscribers, a $100 million annualized revenue run rate, and a dedicated 600-rep sales force focused on the top 750,000 agents.
Florance also highlighted the launch of Homes AI, describing it as a fully integrated real estate AI application. He said in the first week after release, users who engaged with AI mode spent 16 minutes and 50 seconds on site versus 4 minutes and 24 seconds for non-users, conducted nearly four times as many searches, and submitted seven times as many email leads. Management said the company plans to deploy the AI capability across other CoStar platforms over time.
In Q&A, Florance said industry “instabilities” around listings and syndication could create opportunities for Homes.com’s “Your Listing, Your Lead” model, though he said it was difficult to predict exactly how changes would unfold. He also said CoStar expects to reduce net investment in Homes.com in 2026 versus 2025 and continue stepping down investment toward run-rate profitability in 2029 and full-year profitability in 2030.
About CoStar Group (NASDAQ:CSGP)
CoStar Group, Inc is a provider of information, analytics and online marketplaces for the commercial real estate industry. The company gathers property-level data, builds market analytics and supplies research tools used by brokers, owners, lenders, investors and other real estate professionals to evaluate markets, track inventory and manage listings. CoStar’s offerings are delivered primarily through subscription-based platforms that combine proprietary databases, mapping and workflow applications to support decision-making across the property life cycle.
In addition to its core CoStar research service, the company operates prominent online listing and marketing platforms that connect buyers, sellers, tenants and brokers.
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