8-K
Costar Group, Inc. (CSGP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 23, 2021
| COSTAR GROUP, INC. | ||||||||
|---|---|---|---|---|---|---|---|---|
| (Exact name of registrant as specified in its charter) | Delaware | 0-24531 | 52-2091509 | |||||
| --- | --- | --- | ||||||
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | 1331 L Street, NW, | Washington, | DC | 20005 | ||
| --- | --- | --- | --- | --- | ||||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (202) 346-6500
| Not Applicable |
|---|
| (Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common Stock ($0.01 par value) | CSGP | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Item 2.02. Results of Operations and Financial Condition.
On February 23, 2021, CoStar Group, Inc. (“CoStar”) announced its financial results for the quarter and year ended December 31, 2020. The full text of the press release (the “Press Release”) issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in the Press Release shall be considered “furnished” pursuant to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, nor shall it be deemed incorporated by reference into any of the Registrant’s reports or filings with the Securities and Exchange Commission, whether made before or after the date hereof, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) List of Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | CoStar Group, Inc. Press Release Dated February 23, 2021 |
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COSTAR GROUP, INC. | ||
|---|---|---|
| By: | ||
| Date: | February 23, 2021 | /s/ Scott T. Wheeler |
| Name: Scott T. Wheeler | ||
| Title: Chief Financial Officer |
Document
Exhibit 99.1
CoStar Group Full Year and Fourth Quarter 2020 Revenues Increased 19% Year-over-Year
Traffic to CoStar Group’s Marketplaces Grew 29% in the Fourth Quarter
WASHINGTON – February 23, 2021 - CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, announced today that revenue for the year ended December 31, 2020, was $1.66 billion, an increase of 19% over revenue of $1.4 billion for the full year of 2019. Revenue for the fourth quarter ended December 31, 2020, was $444 million, an increase of 19% over revenue of $375 million for the fourth quarter of 2019.
Net income for the year ended December 31, 2020, was $227 million, or $5.93 per diluted share. EBITDA for the full year of 2020 was $406 million and includes one-time charges of $59.5 million related to the now terminated RentPath acquisition. Excluding these one-time charges, EBITDA for the full year of 2020 was $466 million, an increase of 5% compared to EBITDA of $445 million for the full year of 2019. Net Income, excluding the one-time charges, was approximately $271 million, or $7.08 per diluted share.
Adjusted EBITDA (which excludes stock-based compensation, acquisition and integration related costs and other items as described below) for the fourth quarter ended December 31, 2020, was $167 million, an increase of 18% compared to adjusted EBITDA of $142 million for the fourth quarter of 2019. Adjusted EBITDA for the year ended December 31, 2020 was $553 million, an increase of 9% compared to adjusted EBITDA of $507 million for the full year of 2019.
“2020 was an exceptional year for CoStar Group in many ways,” said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “Following the initial pandemic disruption early in the year, we demonstrated that our business is strongly countercyclical as our sales rebounded strongly in the second half of the year. In the fourth quarter, we delivered annualized net new sales of $49 million, bringing our total sales bookings to over $100 million in the second half of 2020. Revenue increased by over a quarter of a billion dollars in 2020. I am particularly pleased that CoStar Suite had its best sales quarter of 2020 in the fourth quarter, more than doubling the third quarter sales level. Unique visitors to our marketplaces increased by over 20% for the year and by 29% in the fourth quarter as the pandemic led more people to shop for real estate online. We raised $2.7 billion in the debt and equity markets and completed the acquisitions of Ten-X, Emporis, and Homesnap, and are well into developing additional important acquisition opportunities – all while working remotely.”
“Apartments.com turned in its strongest performance since we first launched the platform in 2015,” continued Florance, “with revenues growing 22% to almost $600 million. Apartments.com net new sales increased 35% for the year, network visits grew 20% to over 1 billion in 2020, and quality leads to our customers increased over 20%. We believe that our increased investment in marketing for Apartments.com in 2020 was a key driver in our performance and produced outstanding results.”
The LoopNet marketplace network also had a record year, with revenue growth of 20% in 2020 and average monthly unique visitors of approximately 9.4 million in the fourth quarter of 2020, an increase of 37% over the fourth quarter of 2019. Our highest ad levels — gold, diamond, and platinum — are proving to be strongly countercyclical, with revenue growing almost 50% in 2020 and net new sales increasing 100% during the year. In 2020, we invested in marketing and successfully accelerated Apartments.com growth. In 2021, we plan to significantly accelerate our investment in LoopNet’s marketing and sales force and believe we will similarly accelerate LoopNet’s growth.
| Year 2019-2020 Quarterly Results - Unaudited | ||||||||
|---|---|---|---|---|---|---|---|---|
| (in millions, except per share data) | ||||||||
| 2019 | 2020 | |||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| Revenues | $328 | $344 | $353 | $375 | $392 | $397 | $426 | $444 |
| Net income | 85 | 63 | 79 | 88 | 73 | 60 | 58 | 36 |
| Net income per share - diluted | 2.33 | 1.73 | 2.15 | 2.39 | 1.98 | 1.60 | 1.48 | 0.91 |
| Weighted average outstanding shares - diluted | 36.6 | 36.6 | 36.7 | 36.7 | 36.8 | 37.7 | 39.4 | 39.4 |
| EBITDA | 113 | 94 | 113 | 125 | 100 | 109 | 108 | 88 |
| Adjusted EBITDA | 125 | 110 | 129 | 142 | 124 | 129 | 134 | 167 |
| Non-GAAP net income | 92 | 82 | 96 | 103 | 90 | 88 | 89 | 112 |
| Non-GAAP net income per share - diluted | 2.53 | 2.23 | 2.61 | 2.82 | 2.44 | 2.34 | 2.26 | 2.85 |
Non-GAAP net income (which excludes amortization of acquired intangible assets, stock-based compensation and other items as described below) for the full year of 2020 was $380 million or $9.91 per diluted share. Non-GAAP net income for the fourth quarter of 2020 was $112 million or $2.85 per diluted share.
2021 Outlook
The Company expects revenue in the range of $1.925 billion to $1.945 billion for the full year of 2021, representing growth of approximately 17% year-over-year at the midpoint of the range. This guidance includes an estimated 2021 revenue contribution from Homesnap of approximately $50 million. We expect revenue for the first quarter of 2021 in the range of $450 million to $455 million, representing revenue growth of 15% year-over-year at the midpoint of the range.
The Company expects adjusted EBITDA in a range of $640 million to $650 million for the full year of 2021, an increase of 17% at the midpoint of the range compared to 2020. Homesnap is expected to have negative adjusted EBITDA of approximately $5 million for the year. For the first quarter of 2021, the Company expects adjusted EBITDA in a range of $140 million to $145 million.
We expect full year 2021 non-GAAP net income per diluted share in a range of $10.83 to $11.03 based on 39.7 million shares. For the first quarter of 2021, we expect non-GAAP net income per diluted share in a range of $2.33 to $2.43 based on 39.5 million shares. These ranges include an estimated non-GAAP tax rate of 25% for the full year and the first quarter 2021.
The preceding forward-looking statements reflect CoStar Group’s expectations as of February 23, 2021, 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, including uncertainties as a result of the COVID-19 pandemic and responses to it by, and the impact on, global economies, 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.
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 2020, the Company is assuming a 25% tax rate in order to approximate our 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.
Earnings Conference Call
Management will conduct a conference call at 5:00 PM EST on Tuesday, February 23, 2021 to discuss earnings results for the fourth quarter and year ended 2020 and the Company’s outlook.
The audio portion of the conference call will be broadcast live over the Internet at investors.costargroup.com. To participate in the conference call, please register online in advance at http://www.directeventreg.com/registration/event/6192488. After registering, participants will receive dial-in information as well as a passcode and registrant ID. At the time of the call, participants will dial in using the numbers on the confirmation email and enter their passcode and ID, upon which they will be entered into the conference.
The webcast replay will also be available in the Investors section of CoStar Group's 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<br>December 31, | Year Ended<br>December 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Revenues | $ | 444,393 | $ | 374,726 | $ | 1,659,019 | $ | 1,399,719 | ||||
| Cost of revenues | 78,154 | 74,996 | 308,968 | 289,239 | ||||||||
| Gross profit | 366,239 | 299,730 | 1,350,051 | 1,110,480 | ||||||||
| Operating expenses: | ||||||||||||
| Selling and marketing (excluding customer base amortization) | 133,576 | 99,845 | 535,778 | 408,596 | ||||||||
| Software development | 41,573 | 36,580 | 162,916 | 125,602 | ||||||||
| General and administrative | 118,100 | 50,797 | 299,698 | 178,740 | ||||||||
| Customer base amortization | 17,780 | 11,522 | 62,457 | 33,995 | ||||||||
| 311,029 | 198,744 | 1,060,849 | 746,933 | |||||||||
| Income from operations | 55,210 | 100,986 | 289,202 | 363,547 | ||||||||
| Interest (expense) income | (7,913) | 3,439 | (17,395) | 16,742 | ||||||||
| Other (expense) income | (856) | 9,880 | (827) | 10,660 | ||||||||
| Income before income taxes | 46,441 | 114,305 | 270,980 | 390,949 | ||||||||
| Income tax expense | 10,652 | 26,378 | 43,852 | 75,986 | ||||||||
| Net income | $ | 35,789 | $ | 87,927 | $ | 227,128 | $ | 314,963 | ||||
| Net income per share - basic | $ | 0.91 | $ | 2.42 | $ | 5.97 | $ | 8.67 | ||||
| Net income per share - diluted | $ | 0.91 | $ | 2.39 | $ | 5.93 | $ | 8.60 | ||||
| Weighted-average outstanding shares - basic | 39,137 | 36,359 | 38,073 | 36,310 | ||||||||
| Weighted-average outstanding shares - diluted | 39,395 | 36,674 | 38,326 | 36,630 | ||||||||
| 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<br>December 31, | Year Ended<br>December 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net income | $ | 35,789 | $ | 87,927 | $ | 227,128 | $ | 314,963 | ||||
| Income tax expense | 10,652 | 26,378 | 43,852 | 75,986 | ||||||||
| Income before income taxes | 46,441 | 114,305 | 270,980 | 390,949 | ||||||||
| Amortization of acquired intangible assets | 24,784 | 17,406 | 88,132 | 55,352 | ||||||||
| Stock-based compensation expense | 12,667 | 13,271 | 54,104 | 52,255 | ||||||||
| Acquisition and integration related costs | 65,892 | 3,651 | 92,523 | 6,679 | ||||||||
| Restructuring and related costs | — | — | 413 | 3,054 | ||||||||
| Other (income) expense | — | (10,750) | 113 | (10,750) | ||||||||
| Non-GAAP income before income taxes | 149,784 | 137,883 | 506,265 | 497,539 | ||||||||
| Assumed rate for income tax expense * | 25 | % | 25 | % | 25 | % | 25 | % | ||||
| Assumed provision for income tax expense | (37,446) | (34,470) | (126,566) | (124,385) | ||||||||
| Non-GAAP net income | $ | 112,338 | $ | 103,413 | $ | 379,699 | $ | 373,154 | ||||
| Net income per share - diluted | $ | 0.91 | $ | 2.39 | $ | 5.93 | $ | 8.60 | ||||
| Non-GAAP net income per share - diluted | $ | 2.85 | $ | 2.82 | $ | 9.91 | $ | 10.19 | ||||
| Weighted average outstanding shares - basic | 39,137 | 36,359 | 38,073 | 36,310 | ||||||||
| Weighted average outstanding shares - diluted | 39,395 | 36,674 | 38,326 | 36,630 | ||||||||
| * A 25% tax rate is assumed for 2020 and 2019, which approximates our statutory federal and state corporate tax rate. | ||||||||||||
| Reconciliation of Net Income to EBITDA and Adjusted EBITDA | ||||||||||||
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net income | $ | 35,789 | $ | 87,927 | $ | 227,128 | $ | 314,963 | ||||
| Amortization of acquired intangible assets in cost of revenues | 7,004 | 5,854 | 25,675 | 21,357 | ||||||||
| Amortization of acquired intangible assets in operating expenses | 17,780 | 11,552 | 62,457 | 33,995 | ||||||||
| Depreciation and other amortization | 8,249 | 6,524 | 28,812 | 25,813 | ||||||||
| Interest expense (income) | 7,913 | (3,439) | 17,395 | (16,742) | ||||||||
| Other expense (income) | 856 | (9,880) | 827 | (10,660) | ||||||||
| Income tax expense | 10,652 | 26,378 | 43,852 | 75,986 | ||||||||
| EBITDA | $ | 88,243 | $ | 124,916 | $ | 406,146 | $ | 444,712 | ||||
| Stock-based compensation expense | 12,667 | 13,271 | 54,104 | 52,255 | ||||||||
| Acquisition and integration related costs | 65,892 | 3,651 | 92,523 | 6,679 | ||||||||
| Restructuring and related costs | — | — | 413 | 3,054 | ||||||||
| Adjusted EBITDA | $ | 166,802 | $ | 141,838 | $ | 553,186 | $ | 506,700 | ||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Condensed Consolidated Balance Sheets - Unaudited | ||||||||||||
| (in thousands) | ||||||||||||
| December 31,<br>2020 | December 31,<br>2019 | |||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash, cash equivalents and restricted cash | $ | 3,755,912 | $ | 1,070,731 | ||||||||
| Accounts receivable | 119,059 | 96,788 | ||||||||||
| Less: Allowance for credit losses | (15,110) | (4,548) | ||||||||||
| Accounts receivable, net | 103,949 | 92,240 | ||||||||||
| Prepaid expenses and other current assets | 28,651 | 36,194 | ||||||||||
| Total current assets | 3,888,512 | 1,199,165 | ||||||||||
| Long-term investments | — | 10,070 | ||||||||||
| Deferred income taxes, net | 4,983 | 5,408 | ||||||||||
| Property and equipment, net | 126,325 | 107,529 | ||||||||||
| Lease right-of-use assets | 108,740 | 115,084 | ||||||||||
| Goodwill | 2,235,999 | 1,882,020 | ||||||||||
| Intangible assets, net | 426,745 | 421,196 | ||||||||||
| Deferred commission costs, net | 93,274 | 89,374 | ||||||||||
| Deposits and other assets | 15,856 | 9,232 | ||||||||||
| Income tax receivable | 14,986 | 14,908 | ||||||||||
| Total assets | $ | 6,915,420 | $ | 3,853,986 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 15,732 | $ | 7,640 | ||||||||
| Accrued wages and commissions | 80,998 | 53,087 | ||||||||||
| Accrued expenses | 110,305 | 38,680 | ||||||||||
| Income taxes payable | 16,316 | 10,705 | ||||||||||
| Lease liabilities | 32,648 | 29,670 | ||||||||||
| Deferred revenue | 74,851 | 67,274 | ||||||||||
| Total current liabilities | 330,850 | 207,056 | ||||||||||
| Long-term debt, net | 986,715 | — | ||||||||||
| Deferred income taxes, net | 72,991 | 87,096 | ||||||||||
| Income taxes payable | 25,282 | 20,521 | ||||||||||
| Lease and other long-term liabilities | 124,223 | 133,720 | ||||||||||
| Total liabilities | $ | 1,540,061 | $ | 448,393 | ||||||||
| Total stockholders’ equity | 5,375,359 | 3,405,593 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 6,915,420 | $ | 3,853,986 | ||||||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Condensed Consolidated Statements of Cash Flows - Unaudited | ||||||||||||
| (in thousands) | ||||||||||||
| Year Ended<br>December 31, | ||||||||||||
| 2020 | 2019 | |||||||||||
| Operating activities: | ||||||||||||
| Net income | $ | 227,128 | $ | 314,963 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 116,944 | 81,165 | ||||||||||
| Amortization of deferred commissions costs | 60,516 | 53,421 | ||||||||||
| Amortization of senior notes discount and issuance costs | 1,658 | 876 | ||||||||||
| Non-cash lease expense | 26,326 | 22,748 | ||||||||||
| Stock-based compensation expense | 53,450 | 52,255 | ||||||||||
| Deferred income taxes, net | (11,530) | 8,220 | ||||||||||
| Credit loss expense | 25,212 | 10,978 | ||||||||||
| Other operating activities, net | 288 | 105 | ||||||||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||
| Accounts receivable | (36,118) | (5,014) | ||||||||||
| Income taxes payable | 10,352 | (577) | ||||||||||
| Prepaid expenses and other current assets | 1,936 | (14,244) | ||||||||||
| Deferred commissions | (64,355) | (66,688) | ||||||||||
| Other assets | 1,762 | (648) | ||||||||||
| Accounts payable and other liabilities | 100,846 | 17,751 | ||||||||||
| Lease liabilities | (30,497) | (25,442) | ||||||||||
| Deferred revenue | 2,188 | 7,911 | ||||||||||
| Net cash provided by operating activities | 486,106 | 457,780 | ||||||||||
| Investing activities: | ||||||||||||
| Proceeds from sale and settlement of investments | 10,259 | — | ||||||||||
| Purchases of property and equipment and other assets | (48,347) | (46,197) | ||||||||||
| Cash paid for acquisitions, net of cash acquired | (426,075) | (437,556) | ||||||||||
| Net cash used in investing activities | (464,163) | (483,753) | ||||||||||
| Financing activities: | ||||||||||||
| Proceeds from long-term debt | 1,744,210 | — | ||||||||||
| Payments of debt issuance costs | (16,647) | — | ||||||||||
| Payments of long-term debt | (745,000) | — | ||||||||||
| Repurchase of restricted stock to satisfy tax withholding obligations | (38,867) | (27,577) | ||||||||||
| Proceeds from equity offering, net of transaction costs | 1,689,971 | — | ||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 30,280 | 25,080 | ||||||||||
| Other financing activities | (1,650) | (1,657) | ||||||||||
| Net cash provided by (used in) financing activities | 2,662,297 | (4,154) | ||||||||||
| Effect of foreign currency exchange rates on cash and cash equivalents | 941 | 442 | ||||||||||
| Net increase in cash, cash equivalents and restricted cash | 2,685,181 | (29,685) | ||||||||||
| Cash, cash equivalents and restricted cash at the beginning of period | 1,070,731 | 1,100,416 | ||||||||||
| Cash, cash equivalents and restricted cash at the end of period | $ | 3,755,912 | $ | 1,070,731 | ||||||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Disaggregated Revenues - Unaudited | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended December 31, | ||||||||||||
| 2020 | 2019 | |||||||||||
| North America | International | Total | North America | International | Total | |||||||
| Information and analytics | ||||||||||||
| CoStar Suite | $ | 160,842 | $ | 7,896 | $ | 168,738 | $ | 154,152 | $ | 7,107 | $ | 161,259 |
| Information services | 27,048 | 6,930 | 33,978 | 24,318 | 5,030 | 29,348 | ||||||
| Online marketplaces | ||||||||||||
| Multifamily | 160,370 | — | 160,370 | 130,168 | — | 130,168 | ||||||
| Commercial property and land | 81,129 | 178 | 81,307 | 53,846 | 105 | 53,951 | ||||||
| Total revenues | $ | 429,389 | $ | 15,004 | $ | 444,393 | $ | 362,484 | $ | 12,242 | $ | 374,726 |
| Year Ended December 31, | ||||||||||||
| 2020 | 2019 | |||||||||||
| North America | International | Total | North America | International | Total | |||||||
| Information and analytics | ||||||||||||
| CoStar Suite | $ | 634,205 | $ | 30,530 | $ | 664,735 | $ | 590,222 | $ | 27,576 | $ | 617,798 |
| Information services | 104,117 | 25,953 | 130,070 | 76,950 | 11,496 | 88,446 | ||||||
| Online marketplaces | ||||||||||||
| Multifamily | 598,555 | — | 598,555 | 490,631 | — | 490,631 | ||||||
| Commercial property and land | 265,225 | 434 | 265,659 | 202,264 | 580 | 202,844 | ||||||
| Total revenues | $ | 1,602,102 | $ | 56,917 | $ | 1,659,019 | $ | 1,360,067 | $ | 39,652 | $ | 1,399,719 |
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Results of Segments - Unaudited | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| EBITDA | ||||||||||||
| North America | $ | 88,241 | $ | 125,457 | $ | 410,852 | $ | 451,699 | ||||
| International | 2 | (541) | (4,706) | (6,987) | ||||||||
| Total EBITDA | $ | 88,243 | $ | 124,916 | $ | 406,146 | $ | 444,712 | ||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Reconciliation of Non-GAAP Financial Measures with 2019-2020 Quarterly Results - Unaudited | ||||||||||||
| (in millions, except per share data) | ||||||||||||
| Reconciliation of Net Income to Non-GAAP Net Income | ||||||||||||
| 2019 | 2020 | |||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||
| Net income | $85.2 | $63.2 | $78.6 | $87.9 | $72.8 | $60.4 | $58.2 | $35.8 | ||||
| Income tax expense | 12.5 | 16.8 | 20.3 | 26.4 | 5.6 | 16.9 | 10.7 | 10.7 | ||||
| Income before income taxes | 97.7 | 80.0 | 98.9 | 114.3 | 78.4 | 77.3 | 68.9 | 46.4 | ||||
| Amortization of acquired intangible assets | 13.2 | 12.2 | 12.5 | 17.4 | 17.5 | 21.0 | 24.9 | 24.8 | ||||
| Stock-based compensation expense | 12.0 | 13.8 | 13.1 | 13.3 | 15.2 | 9.5 | 16.7 | 12.7 | ||||
| Acquisition and integration related costs | 0.2 | 0.5 | 2.3 | 3.7 | 8.7 | 10.0 | 7.9 | 65.9 | ||||
| Restructuring and related costs | 0.1 | 2.2 | 0.8 | — | — | — | 0.4 | — | ||||
| Other (income) expense | — | — | — | (10.8) | — | — | 0.1 | — | ||||
| Non-GAAP income before income taxes | 123.2 | 108.7 | 127.6 | 137.9 | 119.8 | 117.8 | 118.9 | 149.8 | ||||
| Assumed rate for income tax expense * | 25% | 25% | 25% | 25% | 25% | 25% | 25% | 25% | ||||
| Assumed provision for income tax expense | (30.8) | (27.2) | (31.9) | (34.5) | (30.0) | (29.5) | (29.7) | (37.5) | ||||
| Non-GAAP net income | $92.4 | $81.5 | $95.7 | $103.4 | $89.8 | $88.3 | $89.2 | $112.3 | ||||
| Non-GAAP net income per share - diluted | $2.53 | $2.23 | $2.61 | $2.82 | $2.44 | $2.34 | $2.26 | $2.85 | ||||
| Weighted average outstanding shares - basic | 36.2 | 36.3 | 36.3 | 36.4 | 36.5 | 37.5 | 39.2 | 39.1 | ||||
| Weighted average outstanding shares - diluted | 36.6 | 36.6 | 36.7 | 36.7 | 36.8 | 37.7 | 39.4 | 39.4 | ||||
| * A 25% tax rate is assumed for 2020 and 2019, which approximates our statutory federal and state corporate tax rate. | ||||||||||||
| Reconciliation of Net Income to EBITDA and Adjusted EBITDA | ||||||||||||
| 2019 | 2020 | |||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||
| Net income | $85.2 | $63.2 | $78.6 | $87.9 | $72.8 | $60.4 | $58.2 | $35.8 | ||||
| Amortization of acquired intangible assets | 13.2 | 12.2 | 12.5 | 17.4 | 17.5 | 21.0 | 24.9 | 24.8 | ||||
| Depreciation and other amortization | 6.5 | 6.5 | 6.3 | 6.5 | 6.8 | 7.0 | 6.8 | 8.2 | ||||
| Interest (income) expense | (4.2) | (4.7) | (4.4) | (3.4) | (1.7) | 3.6 | 7.5 | 7.9 | ||||
| Other (income) expense | — | (0.5) | (0.3) | (9.9) | (0.8) | 0.4 | 0.3 | 0.9 | ||||
| Income tax expense | 12.5 | 16.8 | 20.3 | 26.4 | 5.6 | 16.9 | 10.7 | 10.7 | ||||
| EBITDA | $113.2 | $93.5 | $113.0 | $124.9 | $100.2 | $109.3 | $108.4 | $88.3 | ||||
| Stock-based compensation expense | 12.0 | 13.8 | 13.1 | 13.3 | 15.1 | 9.5 | 16.7 | 12.7 | ||||
| Acquisition and integration related costs | 0.2 | 0.5 | 2.3 | 3.7 | 8.7 | 10.0 | 7.9 | 65.9 | ||||
| Restructuring and related costs | 0.1 | 2.2 | 0.8 | — | — | — | 0.4 | — | ||||
| Adjusted EBITDA | $125.5 | $110.0 | $129.2 | $141.9 | $124.0 | $128.8 | $133.4 | $166.9 | ||||
| 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, 2021 | December 31, 2021 | |||||||||||
| Low | High | Low | High | |||||||||
| Net income | $ | 64,000 | $ | 70,000 | $ | 313,000 | $ | 324,000 | ||||
| Income tax expense | 11,000 | 12,000 | 89,000 | 92,000 | ||||||||
| Income before income taxes | 75,000 | 82,000 | 402,000 | 416,000 | ||||||||
| Amortization of acquired intangible assets | 24,000 | 24,000 | 92,000 | 92,000 | ||||||||
| Stock-based compensation expense | 17,000 | 16,000 | 68,000 | 66,000 | ||||||||
| Acquisition and integration related costs | 7,000 | 6,000 | 12,000 | 10,000 | ||||||||
| Non-GAAP income before income taxes | 123,000 | 128,000 | 574,000 | 584,000 | ||||||||
| Assumed rate for income tax expense * | 25 | % | 25 | % | 25 | % | 25 | % | ||||
| Assumed provision for income tax expense | (30,800) | (32,000) | (144,000) | (146,000) | ||||||||
| Non-GAAP net income | $ | 92,200 | $ | 96,000 | $ | 430,000 | $ | 438,000 | ||||
| Net income per share - diluted | $ | 1.62 | $ | 1.77 | $ | 7.88 | $ | 8.16 | ||||
| Non-GAAP net income per share - diluted | $ | 2.33 | $ | 2.43 | $ | 10.83 | $ | 11.03 | ||||
| Weighted average outstanding shares - diluted | 39,500 | 39,500 | 39,700 | 39,700 | ||||||||
| * A 25% tax rate is assumed, which approximates our statutory federal and state corporate tax rate. | ||||||||||||
| 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, 2021 | December 31, 2021 | |||||||||||
| Low | High | Low | High | |||||||||
| Net income | $ | 64,000 | $ | 70,000 | $ | 313,000 | $ | 324,000 | ||||
| Amortization of acquired intangible assets | 24,000 | 24,000 | 92,000 | 92,000 | ||||||||
| Depreciation and other amortization | 9,000 | 9,000 | 32,000 | 32,000 | ||||||||
| Interest and other expense, net | 8,000 | 8,000 | 34,000 | 34,000 | ||||||||
| Income tax expense | 11,000 | 12,000 | 89,000 | 92,000 | ||||||||
| Stock-based compensation expense | 17,000 | 16,000 | 68,000 | 66,000 | ||||||||
| Acquisition and integration related costs | 7,000 | 6,000 | 12,000 | 10,000 | ||||||||
| Adjusted EBITDA | $ | 140,000 | $ | 145,000 | $ | 640,000 | $ | 650,000 |
All Contacts
Scott Wheeler
Chief Financial Officer
(202) 336-6920
swheeler@costar.com
Bill Warmington
Vice President
Investor Relations
(202) 346-5661
wwarmington@costar.com
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite 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 sector. 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. Realla is the UK’s most comprehensive commercial property digital marketplace. 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. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe, Canada and Asia with a staff of over 4,600 worldwide, including the industry’s largest professional research organization. For more information, visit www.costargroup.com.
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'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 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: uncertainty surrounding the impact of the COVID-19 pandemic, including volatility in the international and U.S. economy, worker absenteeism or decreased productivity, quarantines or other travel or health-related restrictions; the length and severity of the COVID-19 pandemic; the pace of recovery following the COVID-19 pandemic; government and private actions taken to control the spread of COVID-19; 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 related to revenue, net income, non-GAAP net income, EBITDA, adjusted EBITDA, site traffic and visitors, leads generated, and sales; the risk that the Company is unable to sustain current revenue, earnings and net new sales bookings growth rates or increase them; the risk that acquisition opportunities do not continue to develop or that any completed acquisitions do not produce the expected results; the risk that the Company’s investment plans change or that those investments do not produce the expected results, including accelerated growth; the risk that revenues for the first quarter and full year 2021 will not be as stated in this press release; the risk that Homesnap revenues for 2021 differ from expectations; the risk that net income for the first quarter and full year 2021 will not be as stated in this press release; the risk that adjusted EBITDA for the first quarter and full year 2021 will not be as stated in this press release; the risk that Homesnap adjusted EBITDA for 2021 differs from expectations; the risk that non-GAAP net income and non-GAAP net income per diluted share for the first quarter and full year 2021 will not be as stated in this press release; and the risk that the tax rate estimates stated in this press release may change. 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’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2019, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 2020, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.