news/CSGP/2023.02.21/CoStar Group 2022 Revenue Increased 12% Year-over-Year and Full Year Net New Bookings G...txt

CoStar Group, Inc. (NASDAQ: CSGP), a leading provider of online real estate marketplaces, information and analytics in the property markets, announced today that revenue for the year ended December 31, 2022 was $2.18 billion, an increase of 12% over revenue of $1.94 billion for the full year of 2021. Revenue for the fourth quarter of 2022 was $573 million, an increase of 13% over revenue of $507 million for the fourth quarter of 2021.

Net income for the year ended December 31, 2022, was $369 million, an increase of 26% compared to net income of $293 million for the full year of 2021. Net income for the fourth quarter of 2022 was $124 million, or $0.31 per diluted share, an increase of 34% compared to net income of $93 million for the fourth quarter of 2021. Adjusted EBITDA was $672 million for the full year and $182 million for the fourth quarter of 2022.

“2022 was an outstanding year for CoStar Group,” said Andy Florance, Founder and Chief Executive Officer of CoStar Group. “We delivered 12% year over year revenue growth while setting a record for full year net new sales bookings of $305 million, an increase of 41% over 2021. Our two largest product platforms, CoStar and Apartments.com, delivered revenue growth of 15% and 16%, respectively, in the fourth quarter, while LoopNet revenue grew 12% to end the year. I believe our efforts to expand our sales team in 2022 are starting to pay off,” continued Florance.

“I’m particularly pleased with the revenue growth acceleration in Apartments.com, which began the year with 6% year-over-year revenue growth in the first quarter and ended the year with 16% year-over-year revenue growth in the fourth quarter,” stated Florance. "Net new bookings for Apartments.com in the fourth quarter were the highest ever, increasing 177% compared to the same period in 2021. This performance is expected to return Apartments.com to 20% or higher revenue growth during 2023,” continued Florance.

“We've made great progress on our residential strategy in 2022,” stated Florance. “Traffic to our Homes.com network has passed 20 million unique monthly visitors and has doubled in the last few months. Our new product received an incredible response from agents at the National Association of Realtors trade show recently, while our 'your listing, your lead' strategy is delivering hundreds of thousands of valuable consumer leads directly to listing agents. Given the strong momentum of Homes.com, we plan to increase our residential investments in the year ahead,” continued Florance.

Year 2021-2022 Quarterly Results - Unaudited

(in millions, except per share data)

 

2021

 

2022

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

Q4

 

 

 

 

 

 

 

 

 

 

Revenues

$458

$480

$499

$507

 

$516

$536

$557

$573

Net income

74

61

64

93

 

89

83

72

124

Net income per share - diluted(1)

0.19

0.16

0.16

0.24

 

0.23

0.21

0.18

0.31

Weighted average outstanding shares - diluted(1)

394

394

394

395

 

394

394

396

406

 

 

 

 

 

 

 

 

 

 

EBITDA

136

133

123

173

 

158

140

129

155

Adjusted EBITDA

160

150

144

193

 

178

159

153

182

Non-GAAP net income

108

103

99

138

 

123

112

118

153

Non-GAAP net income per share - diluted(1)

0.27

0.26

0.25

0.35

 

0.31

0.28

0.30

0.38

__________________________

 

 

 

 

 

 

 

 

 

(1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

2023 Outlook

The Company expects revenue in the range of $2.46 billion to $2.48 billion for the full year of 2023, representing growth of approximately 13% year-over-year at the midpoint of the range. The Company expects revenue for the first quarter of 2023 in the range of $575 million to $580 million, representing revenue growth of approximately 12% year-over-year at the midpoint of the range.

The Company expects adjusted EBITDA in the range of $500 million to $520 million for the full year of 2023. For the first quarter of 2023, the Company expects adjusted EBITDA in the range of $111 million to $116 million.

The Company expects full year 2023 non-GAAP net income per diluted share in a range of $1.06 to $1.09 based on 408 million shares. For the first quarter of 2023, the Company expects non-GAAP net income per diluted share in a range of $0.25 to $0.26 based on 407 million shares. These ranges include an estimated non-GAAP tax rate of 26% for the full year and the first quarter of 2023.

The preceding forward-looking statements reflect CoStar Group’s expectations as of February 21, 2023, including forward-looking non-GAAP financial measures on a consolidated basis, based on current estimates, expectations, observations, and trends. Given the risk factors, rapidly evolving economic environment, and uncertainties and assumptions discussed in this release and in our quarterly reports on Form 10-Q and annual reports on Form 10-K, actual results may differ materially. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.

Reconciliation of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share to their GAAP basis results are shown in detail below, along with definitions for those terms. A reconciliation of forward-looking non-GAAP guidance to the most directly comparable GAAP measure, net income, can be found within the tables included in this release.

Non-GAAP Financial Measures

For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Company’s financial condition and results of operations, please refer to the Company’s latest periodic report.

EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before interest (expense) income and other (expense) income, loss on debt extinguishment, income taxes, depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, and settlements and impairments incurred outside the Company’s normal course of business. Adjusted EBITDA margin represents adjusted EBITDA divided by revenues for the period.

Non-GAAP net income is a non-GAAP financial measure determined by adjusting GAAP net income attributable to CoStar Group for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside the Company's normal course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes. In 2023, the Company is assuming a 26% tax rate in order to approximate its statutory corporate tax rate excluding the impact of discrete items.

Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share. For periods with GAAP net losses and non-GAAP net income, the weighted average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.

Operating Metrics

Net new bookings is calculated based on the annualized amount of change in the Company's sales bookings resulting from new subscription-based contracts and changes to existing subscription-based contracts for the period reported. Information regarding net new bookings is not comparable to, nor should it be substituted for, an analysis of the Company's revenues over time.

Earnings Conference Call

Management will conduct a conference call to discuss the fourth quarter and full year 2022 results and the Company’s outlook at 5:00 PM EST on Tuesday, February 21, 2023. A live audio webcast of the conference will be available in listen-only mode through the Investors section of the CoStar Group website: https://investors.costargroup.com. A replay of the webcast audio will also be available in the Investors section of our website for a period of time following the call.

CoStar Group, Inc.

Condensed Consolidated Statements of Operations - Unaudited

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2022

 

2021

 

2022

2021

Revenues

 

$

573,345

 

 

$

506,786

 

 

$

2,182,399

 

$

1,944,135

 

Cost of revenues

 

 

109,194

 

 

 

86,330

 

 

 

414,008

 

 

357,241

 

Gross profit

 

 

464,151

 

 

 

420,456

 

 

 

1,768,391

 

 

1,586,894

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing (excluding customer base amortization)

 

 

173,486

 

 

 

138,653

 

 

 

684,222

 

 

622,007

 

Software development

 

 

58,403

 

 

 

52,522

 

 

 

220,923

 

 

201,022

 

General and administrative

 

 

92,161

 

 

 

69,964

 

 

 

338,737

 

 

256,711

 

Customer base amortization

 

 

12,939

 

 

 

18,932

 

 

 

73,560

 

 

74,817

 

 

 

 

336,989

 

 

 

280,071

 

 

 

1,317,442

 

 

1,154,557

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

127,162

 

 

 

140,385

 

 

 

450,949

 

 

432,337

 

Interest income (expense), net

 

 

32,586

 

 

 

(7,923

)

 

 

32,125

 

 

(31,621

)

Other income (expense), net

 

 

(213

)

 

 

909

 

 

 

3,383

 

 

3,252

 

Income before income taxes

 

 

159,535

 

 

 

133,371

 

 

 

486,457

 

 

403,968

 

Income tax expense

 

 

35,163

 

 

 

40,471

 

 

 

117,004

 

 

111,404

 

Net income

 

$

124,372

 

 

$

92,900

 

 

$

369,453

 

$

292,564

 

 

 

 

 

 

 

 

 

 

Net income per share - basic

 

$

0.31

 

 

$

0.24

 

 

$

0.93

 

$

0.75

 

Net income per share - diluted

 

$

0.31

 

 

$

0.24

 

 

$

0.93

 

$

0.74

 

 

 

 

 

 

 

 

 

 

Weighted-average outstanding shares - basic

 

 

404,185

 

 

 

392,538

 

 

 

396,284

 

 

392,210

 

Weighted-average outstanding shares - diluted

 

 

406,087

 

 

 

394,532

 

 

 

397,752

 

 

394,160

 

 

 

 

 

 

 

 

 

 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures - Unaudited

(in thousands, except per share data)

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2022

 

2021

 

2022

 

2021

Net income

 

$

124,372

 

 

$

92,900

 

 

$

369,453

 

 

$

292,564

 

Income tax expense

 

 

35,163

 

 

 

40,471

 

 

 

117,004

 

 

 

111,404

 

Income before income taxes

 

 

159,535

 

 

 

133,371

 

 

 

486,457

 

 

 

403,968

 

Amortization of acquired intangible assets

 

 

19,978

 

 

 

26,176

 

 

 

102,579

 

 

 

103,626

 

Stock-based compensation expense

 

 

21,110

 

 

 

16,721

 

 

 

75,207

 

 

 

63,709

 

Acquisition and integration related costs

 

 

2,167

 

 

 

3,243

 

 

 

5,405

 

 

 

18,718

 

Restructuring and related costs

 

 

1,984

 

 

 

—

 

 

 

2,175

 

 

 

—

 

Settlements and impairments

 

 

1,969

 

 

 

—

 

 

 

6,069

 

 

 

—

 

Other expense, net

 

 

—

 

 

 

4,112

 

 

 

6,162

 

 

 

6,903

 

Non-GAAP income before income taxes

 

 

206,743

 

 

 

183,623

 

 

 

684,054

 

 

 

596,924

 

Assumed rate for income tax expense(1)

 

 

26

%

 

 

25

%

 

 

26

%

 

 

25

%

Assumed provision for income tax expense

 

 

(53,753

)

 

 

(45,906

)

 

 

(177,854

)

 

 

(149,231

)

Non-GAAP net income

 

$

152,990

 

 

$

137,717

 

 

$

506,200

 

 

$

447,693

 

 

 

 

 

 

 

 

 

 

Net income per share - diluted

 

$

0.31

 

 

$

0.24

 

 

$

0.93

 

 

$

0.74

 

Non-GAAP net income per share - diluted

 

$

0.38

 

 

$

0.35

 

 

$

1.27

 

 

$

1.14

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

 

404,185

 

 

 

392,538

 

 

 

396,284

 

 

 

392,210

 

Weighted average outstanding shares - diluted

 

 

406,087

 

 

 

394,532

 

 

 

397,752

 

 

 

394,160

 

__________________________

 

 

 

 

 

 

 

 

(1) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period.

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2022

 

2021

 

2022

 

2021

Net income

 

$

124,372

 

 

$

92,900

 

 

$

369,453

 

 

$

292,564

 

Amortization of acquired intangible assets in cost of revenues

 

 

7,039

 

 

 

7,244

 

 

 

29,019

 

 

 

28,809

 

Amortization of acquired intangible assets in operating expenses

 

 

12,939

 

 

 

18,932

 

 

 

73,560

 

 

 

74,817

 

Depreciation and other amortization

 

 

7,928

 

 

 

6,880

 

 

 

29,127

 

 

 

29,018

 

Interest (income) expense, net

 

 

(32,586

)

 

 

7,923

 

 

 

(32,125

)

 

 

31,621

 

Other (income) expense, net

 

 

213

 

 

 

(909

)

 

 

(3,383

)

 

 

(3,252

)

Income tax expense

 

 

35,163

 

 

 

40,471

 

 

 

117,004

 

 

 

111,404

 

EBITDA

 

$

155,068

 

 

$

173,441

 

 

$

582,655

 

 

$

564,981

 

Stock-based compensation expense

 

 

21,110

 

 

 

16,721

 

 

 

75,207

 

 

 

63,709

 

Acquisition and integration related costs

 

 

2,167

 

 

 

3,243

 

 

 

5,405

 

 

 

18,718

 

Restructuring and related costs

 

 

1,984

 

 

 

—

 

 

 

2,175

 

 

 

—

 

Settlements and impairments

 

 

1,969

 

 

 

—

 

 

 

6,069

 

 

 

—

 

Adjusted EBITDA

 

$

182,298

 

 

$

193,405

 

 

$

671,511

 

 

$

647,408

 

CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)

 

 

 

 

 

 

 

December 31,
2022

 

December 31,
2021

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

4,967,970

 

 

$

3,827,126

 

Accounts receivable

 

 

166,140

 

 

 

138,191

 

Less: Allowance for credit losses

 

 

(12,195

)

 

 

(13,374

)

Accounts receivable, net

 

 

153,945

 

 

 

124,817

 

Prepaid expenses and other current assets

 

 

63,952

 

 

 

36,182

 

Total current assets

 

 

5,185,867

 

 

 

3,988,125

 

 

 

 

 

 

Deferred income taxes, net

 

 

9,722

 

 

 

5,034

 

Lease right-of-use assets

 

 

80,392

 

 

 

100,680

 

Property and equipment, net

 

 

321,250

 

 

 

271,431

 

Goodwill

 

 

2,314,759

 

 

 

2,321,015

 

Intangible assets, net

 

 

329,306

 

 

 

435,662

 

Deferred commission costs, net

 

 

142,482

 

 

 

101,879

 

Deposits and other assets

 

 

16,687

 

 

 

21,762

 

Income tax receivable

 

 

2,005

 

 

 

11,283

 

Total assets

 

$

8,402,470

 

 

$

7,256,871

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

28,460

 

 

$

22,244

 

Accrued wages and commissions

 

 

104,988

 

 

 

81,794

 

Accrued expenses

 

 

89,113

 

 

 

81,676

 

Income taxes payable

 

 

10,438

 

 

 

31,236

 

Lease liabilities

 

 

36,049

 

 

 

26,268

 

Deferred revenue

 

 

103,567

 

 

 

95,471

 

Total current liabilities

 

 

372,615

 

 

 

338,689

 

 

 

 

 

 

Long-term debt, net

 

 

989,210

 

 

 

987,944

 

Deferred income taxes, net

 

 

76,202

 

 

 

98,656

 

Income taxes payable

 

 

14,001

 

 

 

12,496

 

Lease and other long-term liabilities

 

 

80,321

 

 

 

107,414

 

Total liabilities

 

$

1,532,349

 

 

$

1,545,199

 

 

 

 

 

 

Total stockholders' equity

 

 

6,870,121

 

 

 

5,711,672

 

Total liabilities and stockholders' equity

 

$

8,402,470

 

 

$

7,256,871

 

CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)

 

 

 

Year Ended
December 31,

 

2022

 

2021

Operating activities:

 

 

 

Net income

$

369,453

 

 

$

292,564

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

137,885

 

 

 

139,558

 

Amortization of deferred commissions costs

 

76,082

 

 

 

63,391

 

Amortization of Senior Notes discount and issuance costs

 

2,365

 

 

 

2,327

 

Non-cash lease expense

 

38,489

 

 

 

28,485

 

Stock-based compensation expense

 

75,207

 

 

 

63,709

 

Deferred income taxes, net

 

(31,203

)

 

 

24,165

 

Credit loss expense

 

18,309

 

 

 

10,928

 

Other operating activities, net

 

(2,439

)

 

 

(654

)

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(46,403

)

 

 

(29,630

)

Prepaid expenses and other current assets

 

(17,910

)

 

 

(14,873

)

Deferred commissions

 

(116,796

)

 

 

(72,038

)

Accounts payable and other liabilities

 

23,234

 

 

 

(30,051

)

Lease liabilities

 

(37,396

)

 

 

(30,904

)

Income taxes payable

 

(19,259

)

 

 

5,860

 

Deferred revenue

 

6,785

 

 

 

17,396

 

Other assets

 

2,217

 

 

 

(502

)

Other assets

 

—

 

 

 

—

 

Net cash provided by operating activities

 

478,620

 

 

 

469,731

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from sale and settlement of investments

 

864

 

 

 

—

 

Proceeds from sale of property and equipment and other assets

 

30,097

 

 

 

612

 

Purchase of Richmond assets

 

(35,169

)

 

 

(123,764

)

Purchases of property and equipment and other assets

 

(58,574

)

 

 

(65,220

)

Cash paid for acquisitions, net of cash acquired

 

(6,273

)

 

 

(192,971

)

Net cash used in investing activities

 

(69,055

)

 

 

(381,343

)

 

 

 

 

Financing activities:

 

 

 

Proceeds from long-term debt

 

—

 

 

 

—

 

Payments of debt issuance costs

 

—

 

 

 

—

 

Payments of long-term debt

 

(2,155

)

 

 

—

 

Repurchase of restricted stock to satisfy tax withholding obligations

 

(23,108

)

 

 

(33,314

)

Proceeds from equity offering, net of transaction costs

 

745,700

 

 

 

—

 

Proceeds from exercise of stock options and employee stock purchase plan

 

13,540

 

 

 

18,046

 

Other financing activities

 

—

 

 

 

(411

)

Net cash provided by (used in) financing activities

 

733,977

 

 

 

(15,679

)

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

(2,698

)

 

 

(1,495

)

Net increase in cash and cash equivalents

 

1,140,844

 

 

 

71,214

 

Cash and cash equivalents at beginning of year

 

3,827,126

 

 

 

3,755,912

 

Cash and cash equivalents at end of year

$

4,967,970

 

 

$

3,827,126

 

CoStar Group, Inc.

Disaggregated Revenues - Unaudited

(in thousands)

 

 

 

Three Months Ended December 31,

 

2022

 

2021

 

North America

 

International

 

Total

 

North America

 

International

 

Total

CoStar

$

210,042

 

$

9,033

 

$

219,075

 

$

181,478

 

$

8,915

 

$

190,393

Information Services

 

31,645

 

 

9,007

 

 

40,652

 

 

28,764

 

 

7,112

 

 

35,876

Multifamily

 

198,016

 

 

—

 

 

198,016

 

 

170,051

 

 

—

 

 

170,051

LoopNet

 

59,341

 

 

1,955

 

 

61,296

 

 

53,046

 

 

1,613

 

 

54,659

Residential

 

16,182

 

 

—

 

 

16,182

 

 

20,644

 

 

—

 

 

20,644

Other Marketplaces

 

38,124

 

 

—

 

 

38,124

 

 

35,163

 

 

—

 

 

35,163

Total revenues

$

553,350

 

$

19,995

 

$

573,345

 

$

489,146

 

$

17,640

 

$

506,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

2022

 

2021

 

North America

 

International

 

Total

 

North America

 

International

 

Total

CoStar

$

800,183

 

$

36,797

 

$

836,980

 

$

686,948

 

$

35,873

 

$

722,821

Information Services

 

124,951

 

 

32,431

 

 

157,382

 

 

113,723

 

 

27,932

 

 

141,655

Multifamily

 

745,388

 

 

—

 

 

745,388

 

 

678,680

 

 

—

 

 

678,680

LoopNet

 

223,758

 

 

7,183

 

 

230,941

 

 

204,816

 

 

2,695

 

 

207,511

Residential

 

73,747

 

 

—

 

 

73,747

 

 

74,583

 

 

—

 

 

74,583

Other Marketplaces

 

137,961

 

 

—

 

 

137,961

 

 

118,885

 

 

—

 

 

118,885

Total revenues

$

2,105,988

 

$

76,411

 

$

2,182,399

 

$

1,877,635

 

$

66,500

 

$

1,944,135

 

 

 

 

 

 

 

 

 

 

 

CoStar Group, Inc.

Results of Segments - Unaudited

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2022

 

2021

 

2022

 

2021

EBITDA

 

 

 

 

 

 

 

North America

$

154,788

 

$

171,268

 

$

577,242

 

$

557,125

International

 

280

 

 

2,173

 

 

5,413

 

 

7,856

Total EBITDA

$

155,068

 

$

173,441

 

$

582,655

 

$

564,981

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures with Quarterly Results - Unaudited

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

2022

 

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

Q4

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$74.2

$61.1

$64.3

$92.9

 

$89.3

$83.5

$72.3

$124.4

Income tax expense

 

19.1

32.8

19.0

40.5

 

32.1

24.7

25.1

35.2

Income before income taxes

 

93.3

93.9

83.3

133.4

 

121.4

108.1

97.4

159.5

Amortization of acquired intangible assets

 

25.8

25.3

26.3

26.2

 

23.2

22.8

36.6

20.0

Stock-based compensation expense

 

15.5

15.1

16.3

16.7

 

17.8

18.1

18.1

21.1

Acquisition and integration related costs

 

8.5

2.0

5.0

3.2

 

1.6

0.5

1.1

2.2

Restructuring and related costs

 

—

—

—

—

 

—

—

0.2

2.0

Settlements and impairments

 

—

—

—

—

 

—

—

4.1

2.0

Other expense, net

 

1.1

0.8

0.9

4.1

 

2.0

2.1

2.1

—

Non-GAAP income before income taxes(1)

 

144.2

137.1

131.8

183.6

 

166.1

151.6

159.6

206.7

Assumed rate for income tax expense (2)

 

25%

25%

25%

25%

 

26%

26%

26%

26%

Assumed provision for income tax expense

 

(36.0)

(34.3)

(33.0)

(45.9)

 

(43.2)

(39.4)

(41.5)

(53.8)

Non-GAAP net income(1)

 

$108.2

$102.8

$98.8

$137.7

 

$122.9

$112.2

$118.1

$153.0

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share - diluted(3)

 

$0.27

$0.26

$0.25

$0.35

 

$0.31

$0.28

$0.30

$0.38

 

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic(3)

 

391.6

392.3

392.4

392.5

 

392.9

393.3

394.7

404.2

Weighted average outstanding shares - diluted(3)

 

393.7

394.1

394.3

394.5

 

394.2

394.5

396.2

406.1

__________________________

 

 

 

 

 

 

 

 

 

 

(1) Totals may not foot due to rounding.

(2) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period.

(3) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

2022

 

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

Q4

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$74.2

$61.1

$64.3

$92.9

 

$89.3

$83.5

$72.3

$124.4

Amortization of acquired intangible assets

 

25.8

25.3

26.3

26.2

 

23.2

22.8

36.6

20.0

Depreciation and other amortization

 

8.5

7.0

6.6

6.9

 

7.0

7.0

7.2

7.9

Interest (income) expense, net

 

7.9

7.9

7.9

7.9

 

7.7

3.4

(10.7)

(32.6)

Other (income) expense, net

 

0.1

(0.8)

(1.5)

(0.9)

 

(0.9)

(1.3)

(1.4)

0.2

Income tax expense

 

19.1

32.8

19.0

40.5

 

32.1

24.7

25.1

35.2

EBITDA(1)

 

$135.6

$133.3

$122.6

$173.4

 

$158.4

$140.0

$129.1

$155.1

Stock-based compensation expense

 

15.5

15.1

16.3

16.7

 

17.8

18.1

18.1

21.1

Acquisition and integration related costs

 

8.5

2.0

5.0

3.2

 

1.6

0.5

1.1

2.2

Restructuring and related costs

 

—

—

—

—

 

—

—

0.2

2.0

Settlements and impairments

 

—

—

—

—

 

—

—

4.1

2.0

Adjusted EBITDA(1)

 

$159.6

$150.4

$143.9

$193.4

 

$177.9

$158.6

$152.7

$182.3

__________________________

 

 

 

 

 

 

 

 

 

 

(1) Totals may not foot due to rounding.

CoStar Group, Inc.

Reconciliation of Forward-Looking Guidance - Unaudited

(in thousands, except per share data)

 

Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income

 

 

 

 

 

Guidance Range

 

Guidance Range

 

For the Three Months

 

For the Year Ending

 

Ending March 31, 2023

 

December 31, 2023

 

Low

 

High

 

Low

 

High

Net income

$

71,000

 

 

$

75,000

 

 

$

314,000

 

 

$

329,000

 

Income tax expense

 

25,000

 

 

 

26,000

 

 

 

110,000

 

 

 

115,000

 

Income before income taxes

 

96,000

 

 

 

101,000

 

 

 

424,000

 

 

 

444,000

 

Amortization of acquired intangible assets

 

18,000

 

 

 

18,000

 

 

 

69,000

 

 

 

69,000

 

Stock-based compensation expense

 

21,000

 

 

 

21,000

 

 

 

88,000

 

 

 

88,000

 

Acquisition and integration related costs

 

1,000

 

 

 

1,000

 

 

 

1,000

 

 

 

1,000

 

Settlements and impairments

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other expense, net

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Non-GAAP income before income taxes

 

136,000

 

 

 

141,000

 

 

 

582,000

 

 

 

602,000

 

Assumed rate for income tax expense(1)

 

26

%

 

 

26

%

 

 

26

%

 

 

26

%

Assumed provision for income tax expense

 

(35,400

)

 

 

(36,700

)

 

 

(151,300

)

 

 

(156,500

)

Non-GAAP net income

$

100,600

 

 

$

104,300

 

 

$

430,700

 

 

$

445,500

 

 

 

 

 

 

 

 

 

Net income per share - diluted

$

0.17

 

 

$

0.18

 

 

$

0.77

 

 

$

0.81

 

Non-GAAP net income per share - diluted

$

0.25

 

 

$

0.26

 

 

$

1.06

 

 

$

1.09

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - diluted

 

406,600

 

 

 

406,600

 

 

 

407,700

 

 

 

407,700

 

__________________________

 

 

 

 

 

 

 

(1) The assumed tax rate approximates our statutory federal and state corporate tax rate for the applicable period.

 

 

 

 

 

 

 

 

Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA

 

 

 

 

 

Guidance Range

 

Guidance Range

 

For the Three Months

 

For the Year Ending

 

Ending March 31, 2023

 

December 31, 2023

 

Low

 

High

 

Low

 

High

Net income

$

71,000

 

 

$

75,000

 

 

$

314,000

 

 

$

329,000

 

Amortization of acquired intangible assets

 

18,000

 

 

 

18,000

 

 

 

69,000

 

 

 

69,000

 

Depreciation and other amortization

 

8,000

 

 

 

8,000

 

 

 

34,000

 

 

 

34,000

 

Interest (income), net

 

(33,000

)

 

 

(33,000

)

 

 

(116,000

)

 

 

(116,000

)

Other expense, net

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Income tax expense

 

25,000

 

 

 

26,000

 

 

 

110,000

 

 

 

115,000

 

Stock-based compensation expense

 

21,000

 

 

 

21,000

 

 

 

88,000

 

 

 

88,000

 

Acquisition and integration related costs

 

1,000

 

 

 

1,000

 

 

 

1,000

 

 

 

1,000

 

Settlements and impairments

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Adjusted EBITDA

$

111,000

 

 

$

116,000

 

 

$

500,000

 

 

$

520,000

 

About CoStar Group, Inc.

CoStar Group, Inc. (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information and analytics. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our portfolio of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homes.com offers real estate professionals advertising and marketing services for residential properties. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada and Asia. From time-to-time we plan to utilize our corporate website, www.costargroup.com, as a channel of distribution for material company information.

This news release and the Company’s earnings conference call contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about CoStar Group's plans, objectives, expectations, beliefs and intentions and other statements including words such as “hope,” “anticipate,” “may,” “believe,” “expect,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology. Such statements are based upon the current beliefs and expectations of management of CoStar Group and are subject to many risks and uncertainties. Actual results may differ materially from the results anticipated in the forward-looking statements and the assumptions and estimates used as a basis for the forward-looking statements. The following factors, among others, could cause or contribute to such differences: the risk that the trends stated or implied by this release or in the earnings conference call cannot or will not be sustained at the current pace or may increase or decrease, including trends and expectations related to revenue, revenue growth, net income, non-GAAP net income, EBITDA, adjusted EBITDA, adjusted EBITDA margin, sales, net new bookings, site traffic and visitors, leads, and renewal rates; the risk that the Company is unable to sustain current Company-wide, CoStar, Apartments or LoopNet net new bookings; the risk that revenues for the first quarter and full year 2023 will not be as stated in this press release; the risk that net income for the first quarter and full year 2023 will not be as stated in this press release; the risk that EBITDA for the first quarter and full year 2023 will not be as stated in this press release; the risk that adjusted EBITDA for the first quarter and full year 2023 will not be as stated in this press release; the risk that non-GAAP net income and non-GAAP net income per diluted share for the first quarter and full year 2023 will not be as stated in this press release; the risk that we may not successfully integrate acquired businesses or assets and may not achieve anticipated benefits of an acquisition, including expected synergies; the risk that the tax rate estimates stated in this press release may change and the risk that we may experience declines in our revenues, revenue growth rates and profitability due to the impact of economic conditions on the real estate industry and our core customer base. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar Group’s filings from time to time with the Securities and Exchange Commission, including in CoStar Group’s Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Report on Forms 10-Q for the quarters ended March 31, 2022; June 30, 2022 and September 30, 2022, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar Group’s other filings with the SEC (including Current Reports on Form 8-K) available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar Group on the date hereof, and CoStar Group assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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