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): October 26, 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 October 26, 2021, CoStar Group, Inc. announced its financial results for the quarter ended September 30, 2021. 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 October 26, 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: | October 26, 2021 | /s/ Scott T. Wheeler |
| Name: Scott T. Wheeler | ||
| Title: Chief Financial Officer |
Document
Exhibit 99.1
CoStar Group Third Quarter 2021 Revenue Increased 17% Year-over-Year,
CoStar Accelerated to Double-Digit Revenue Growth with Net Sales Reaching All-Time High
WASHINGTON – October 26, 2021 - CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics, and online marketplaces, announced today that revenue for the quarter ended September 30, 2021, was $499 million, an increase of 17% over revenue of $426 million for the third quarter of 2020.
Net income for the third quarter of 2021 was $64 million, or $0.16 per diluted share. Non-GAAP net income for the third quarter of 2021 (which excludes amortization of acquired intangible assets, stock-based compensation, and other items as described below) was $99 million or $0.25 per diluted share, an increase of $10 million or 11% versus the third quarter of 2020. EBITDA for the third quarter of 2021 was $123 million, an increase of 13% versus EBITDA of $108 million for the third quarter of 2020.
“We achieved another great quarter of strong results, with CoStar Group now at nearly $2 billion in run rate revenue and profit for the third quarter of 2021 well-ahead of our guidance,” commented Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “CoStar performance continues to improve, with revenue returning to double-digit growth rates in the third quarter of 2021 and our CoStar sales team produced net sales bookings 57% higher quarter-over-quarter and 566% higher year-over-year," continued Florance. "I’m very happy with the performance of our Ten-X and Residential businesses as well, both of which delivered exceptional revenue growth of 27% for Ten-X and 38% for Homesnap, on a year-over-year and pro forma basis, respectively.”
“With recent record levels of demand for apartments, vacancies have declined to the lowest levels in decades creating some headwinds for demand in apartment advertising. However, traffic to our network of sites increased 17% year-over-year in the third quarter of 2021,” stated Florance, “with Apartments.com generating millions more high-quality leads for our customers year-over-year in a low-vacancy environment while our clients are increasing their rents to record levels. This tremendous growth in leads and rents has positioned Apartments.com to begin initiating pricing adjustments to better capture the value of the lead flow we are delivering to our clients. We are just beginning to implement the new pricing, and I am encouraged by the initial results of the price changes.”
Companywide net bookings for the third quarter of 2021 were $47 million, which includes stronger than expected CoStar sales offset by sales results slowed by the ultra-low vacancy rates in Multifamily.
| Year 2020-2021 Quarterly Results - Unaudited | |||||||
|---|---|---|---|---|---|---|---|
| (in millions, except per share data) | |||||||
| 2020 | 2021 | ||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | |
| Revenues | $392 | $397 | $426 | $444 | $458 | $480 | $499 |
| Net income | 73 | 60 | 58 | 36 | 74 | 61 | 64 |
| Net income per share - diluted(1) | 0.20 | 0.16 | 0.15 | 0.09 | 0.19 | 0.16 | 0.16 |
| Weighted average outstanding shares - diluted(1) | 368 | 377 | 394 | 394 | 394 | 394 | 394 |
| EBITDA | 100 | 109 | 108 | 88 | 136 | 133 | 123 |
| Adjusted EBITDA | 124 | 129 | 134 | 167 | 160 | 150 | 144 |
| Non-GAAP net income | 90 | 88 | 89 | 112 | 108 | 103 | 99 |
| Non-GAAP net income per share - diluted(1) | 0.24 | 0.23 | 0.23 | 0.29 | 0.27 | 0.26 | 0.25 |
| __________________________ |
(1) 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.
As of September 30, 2021, the Company had approximately $3.8 billion in cash, cash equivalents and restricted cash and outstanding debt of approximately $988 million.
2021 Outlook
“In order to provide additional transparency and insight into the revenue performance of our most promising growth areas, we will now report revenue for both LoopNet and Residential services separately in our quarterly financial results,” said CoStar Group Chief Financial Officer, Scott Wheeler. The Commercial Property and Land sector is being renamed Other Marketplaces and includes Ten-X and the Lands and Businesses for Sale marketplaces.
The Company is adjusting its revenue guidance for the full year of 2021 to a new range of $1.935 billion to $1.940 billion, representing growth of approximately 17% year-over-year at the midpoint of the range. The new guidance includes a reduction in expected revenue from Multifamily which is partially offset by stronger expected revenue from CoStar. Revenue for the fourth quarter of 2021 is expected to be in the range of $498 million to $503 million, representing year-over-year revenue growth of approximately 13% at the midpoint of the range.
The Company is raising its adjusted EBITDA guidance for the full year of 2021 to a new range of $615 million to $620 million, representing growth of approximately 12% at the midpoint of the range. For the fourth quarter of 2021, the Company expects adjusted EBITDA in a range of $161 million to $166 million.
The Company is raising its non-GAAP net income per diluted share guidance for full-year 2021 to a new range of $1.07 to $1.08 per share based on 394 million shares. For the fourth quarter of 2021, we expect non-GAAP net income per diluted share in a range of $0.29 to $0.30 per share based on 394 million shares. These ranges include an estimated non-GAAP tax rate of 25% for the full year and the fourth quarter of 2021.
The preceding forward-looking statements reflect CoStar Group’s expectations as of October 26, 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 and the commercial real estate industry, 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 2021, 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 to discuss third quarter 2021 results and the Company’s outlook at 5:00 PM EDT on Tuesday, October 26, 2021. 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<br>September 30, | Nine Months Ended<br>September 30, | |||||||
| 2021 | 2020 | 2021 | 2020 | |||||
| Revenues | $ | 499,319 | $ | 425,620 | $ | 1,437,349 | $ | 1,214,626 |
| Cost of revenues | 92,597 | 77,865 | 270,911 | 230,814 | ||||
| Gross profit | 406,722 | 347,755 | 1,166,438 | 983,812 | ||||
| Operating expenses: | ||||||||
| Selling and marketing (excluding customer base amortization) | 180,055 | 146,634 | 483,354 | 402,202 | ||||
| Software development | 53,143 | 40,732 | 148,500 | 121,343 | ||||
| General and administrative | 64,671 | 65,322 | 186,747 | 181,598 | ||||
| Customer base amortization | 19,121 | 18,258 | 55,885 | 44,677 | ||||
| 316,990 | 270,946 | 874,486 | 749,820 | |||||
| Income from operations | 89,732 | 76,809 | 291,952 | 233,992 | ||||
| Interest expense, net | (7,943) | (7,537) | (23,698) | (9,482) | ||||
| Other income (expense) | 1,546 | (338) | 2,343 | 29 | ||||
| Income before income taxes | 83,335 | 68,934 | 270,597 | 224,539 | ||||
| Income tax expense | 19,031 | 10,748 | 70,933 | 33,200 | ||||
| Net income | $ | 64,304 | $ | 58,186 | $ | 199,664 | $ | 191,339 |
| Net income per share - basic(1) | $ | 0.16 | $ | 0.15 | $ | 0.51 | $ | 0.51 |
| Net income per share - diluted(1) | $ | 0.16 | $ | 0.15 | $ | 0.51 | $ | 0.50 |
| Weighted-average outstanding shares - basic(1) | 392,419 | 391,586 | 392,101 | 377,177 | ||||
| Weighted-average outstanding shares - diluted(1) | 394,295 | 394,013 | 394,036 | 379,704 | ||||
| __________________________ |
(1) 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.
| 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>September 30, | Nine Months Ended<br>September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net income | $ | 64,304 | $ | 58,186 | $ | 199,664 | $ | 191,339 | ||||
| Income tax expense | 19,031 | 10,748 | 70,933 | 33,200 | ||||||||
| Income before income taxes | 83,335 | 68,934 | 270,597 | 224,539 | ||||||||
| Amortization of acquired intangible assets | 26,330 | 24,870 | 77,450 | 63,348 | ||||||||
| Stock-based compensation expense | 16,299 | 16,730 | 46,988 | 41,437 | ||||||||
| Acquisition and integration related costs | 5,012 | 7,887 | 15,475 | 26,631 | ||||||||
| Restructuring and related costs | — | 413 | — | 413 | ||||||||
| Other expense | 934 | 113 | 2,791 | 113 | ||||||||
| Non-GAAP income before income taxes | 131,910 | 118,947 | 413,301 | 356,481 | ||||||||
| Assumed rate for income tax expense(1) | 25 | % | 25 | % | 25 | % | 25 | % | ||||
| Assumed provision for income tax expense | (32,978) | (29,737) | (103,325) | (89,120) | ||||||||
| Non-GAAP net income | $ | 98,932 | $ | 89,210 | $ | 309,976 | $ | 267,361 | ||||
| Net income per share - diluted(2) | $ | 0.16 | $ | 0.15 | $ | 0.51 | $ | 0.50 | ||||
| Non-GAAP net income per share - diluted(2) | $ | 0.25 | $ | 0.23 | $ | 0.79 | $ | 0.70 | ||||
| Weighted average outstanding shares - basic(2) | 392,419 | 391,586 | 392,101 | 377,177 | ||||||||
| Weighted average outstanding shares - diluted(2) | 394,295 | 394,013 | 394,036 | 379,704 | ||||||||
| __________________________ | ||||||||||||
| (1) A 25% tax rate is assumed for 2021 and 2020, which approximates our statutory federal and state corporate tax rate. | ||||||||||||
| (2) 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 | ||||||||||||
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net income | $ | 64,304 | $ | 58,186 | $ | 199,664 | $ | 191,339 | ||||
| Amortization of acquired intangible assets in cost of revenues | 7,209 | 6,612 | 21,565 | 18,671 | ||||||||
| Amortization of acquired intangible assets in operating expenses | 19,121 | 18,258 | 55,885 | 44,677 | ||||||||
| Depreciation and other amortization | 6,610 | 6,806 | 22,138 | 20,563 | ||||||||
| Interest expense | 7,943 | 7,537 | 23,698 | 9,482 | ||||||||
| Other (income) expense | (1,546) | 338 | (2,343) | (29) | ||||||||
| Income tax expense | 19,031 | 10,748 | 70,933 | 33,200 | ||||||||
| EBITDA | $ | 122,672 | $ | 108,485 | $ | 391,540 | $ | 317,903 | ||||
| Stock-based compensation expense | 16,299 | 16,730 | 46,988 | 41,437 | ||||||||
| Acquisition and integration related costs | 5,012 | 7,887 | 15,475 | 26,631 | ||||||||
| Restructuring and related costs | — | 413 | — | 413 | ||||||||
| Adjusted EBITDA | $ | 143,983 | $ | 133,515 | $ | 454,003 | $ | 386,384 | ||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Condensed Consolidated Balance Sheets - Unaudited | ||||||||||||
| (in thousands) | ||||||||||||
| September 30,<br>2021 | December 31,<br>2020 | |||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash, cash equivalents and restricted cash | $ | 3,761,587 | $ | 3,755,912 | ||||||||
| Accounts receivable | 128,700 | 119,059 | ||||||||||
| Less: Allowance for credit losses | (13,049) | (15,110) | ||||||||||
| Accounts receivable, net | 115,651 | 103,949 | ||||||||||
| Prepaid expenses and other current assets | 37,599 | 28,651 | ||||||||||
| Total current assets | 3,914,837 | 3,888,512 | ||||||||||
| Deferred income taxes, net | 1,975 | 4,983 | ||||||||||
| Property and equipment, net | 238,866 | 126,325 | ||||||||||
| Lease right-of-use assets | 105,964 | 108,740 | ||||||||||
| Goodwill | 2,293,514 | 2,235,999 | ||||||||||
| Intangible assets, net | 447,900 | 426,745 | ||||||||||
| Deferred commission costs, net | 96,303 | 93,274 | ||||||||||
| Deposits and other assets | 16,971 | 15,856 | ||||||||||
| Income tax receivable | 14,986 | 14,986 | ||||||||||
| Total assets | $ | 7,131,316 | $ | 6,915,420 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 17,487 | $ | 15,732 | ||||||||
| Accrued wages and commissions | 82,905 | 80,998 | ||||||||||
| Accrued expenses | 86,788 | 110,305 | ||||||||||
| Income taxes payable | 11,828 | 16,316 | ||||||||||
| Lease liabilities | 29,878 | 32,648 | ||||||||||
| Deferred revenue | 92,631 | 74,851 | ||||||||||
| Total current liabilities | 321,517 | 330,850 | ||||||||||
| Long-term debt, net | 987,633 | 986,715 | ||||||||||
| Deferred income taxes, net | 83,399 | 72,991 | ||||||||||
| Income taxes payable | 26,188 | 25,282 | ||||||||||
| Lease and other long-term liabilities | 109,156 | 124,223 | ||||||||||
| Total liabilities | $ | 1,527,893 | $ | 1,540,061 | ||||||||
| Total stockholders’ equity | 5,603,423 | 5,375,359 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 7,131,316 | $ | 6,915,420 | ||||||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Condensed Consolidated Statements of Cash Flows - Unaudited | ||||||||||||
| (in thousands) | ||||||||||||
| Nine Months Ended<br>September 30, | ||||||||||||
| 2021 | 2020 | |||||||||||
| Operating activities: | ||||||||||||
| Net income | $ | 199,664 | $ | 191,339 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 102,390 | 83,911 | ||||||||||
| Amortization of deferred commissions costs | 46,728 | 45,017 | ||||||||||
| Amortization of Senior Notes discount and issuance costs | 1,742 | 1,082 | ||||||||||
| Non-cash lease expense | 21,118 | 18,801 | ||||||||||
| Stock-based compensation expense | 46,988 | 40,783 | ||||||||||
| Deferred income taxes, net | 16,255 | 6,812 | ||||||||||
| Credit loss expense | 7,797 | 21,395 | ||||||||||
| Other operating activities, net | 10 | (12) | ||||||||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||
| Accounts receivable | (17,715) | (34,131) | ||||||||||
| Prepaid expenses and other current assets | (18,820) | 4,145 | ||||||||||
| Deferred commissions | (49,798) | (48,704) | ||||||||||
| Accounts payable and other liabilities | (27,912) | 47,341 | ||||||||||
| Lease liabilities | (23,596) | (21,247) | ||||||||||
| Income taxes payable | (3,583) | (9,838) | ||||||||||
| Deferred revenue | 15,800 | 7,123 | ||||||||||
| Other assets | 2,150 | 1,521 | ||||||||||
| Net cash provided by operating activities | 319,218 | 355,338 | ||||||||||
| Investing activities: | ||||||||||||
| Proceeds from sale and settlement of investments | — | 10,259 | ||||||||||
| Proceeds from sale of property and equipment and other assets | 245 | — | ||||||||||
| Purchase of Richmond assets and other intangibles | (123,623) | — | ||||||||||
| Purchases of property and equipment and other assets | (21,533) | (42,137) | ||||||||||
| Cash paid for acquisitions, net of cash acquired | (152,594) | (192,002) | ||||||||||
| Net cash used in investing activities | (297,505) | (223,880) | ||||||||||
| Financing activities: | ||||||||||||
| Proceeds from long-term debt | — | 1,744,210 | ||||||||||
| Payments of debt issuance costs | — | (15,747) | ||||||||||
| Payments of long-term debt | — | (745,000) | ||||||||||
| Repurchase of restricted stock to satisfy tax withholding obligations | (29,306) | (34,051) | ||||||||||
| Proceeds from equity offering, net of transaction costs | — | 1,689,971 | ||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 15,025 | 28,169 | ||||||||||
| Other financing activities | (57) | (1,650) | ||||||||||
| Net cash (used in) provided by financing activities | (14,338) | 2,665,902 | ||||||||||
| Effect of foreign currency exchange rates on cash and cash equivalents | (1,700) | (286) | ||||||||||
| Net increase in cash, cash equivalents and restricted cash | 5,675 | 2,797,074 | ||||||||||
| Cash, cash equivalents and restricted cash at the beginning of period | 3,755,912 | 1,070,731 | ||||||||||
| Cash, cash equivalents and restricted cash at the end of period | $ | 3,761,587 | $ | 3,867,805 | ||||||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Disaggregated Revenues - Unaudited | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended September 30, | ||||||||||||
| 2021 | 2020 | |||||||||||
| North America | International | Total | North America | International | Total | |||||||
| CoStar | $ | 174,071 | $ | 9,194 | $ | 183,265 | $ | 158,235 | $ | 7,753 | $ | 165,988 |
| Information Services | 29,177 | 6,749 | 35,926 | 26,357 | 6,817 | 33,174 | ||||||
| Multifamily | 171,125 | — | 171,125 | 155,184 | — | 155,184 | ||||||
| LoopNet(1) | 52,103 | 424 | 52,527 | 44,938 | 146 | 45,084 | ||||||
| Residential(1) | 24,747 | — | 24,747 | — | — | — | ||||||
| Other Marketplaces(1) | 31,729 | — | 31,729 | 26,190 | — | 26,190 | ||||||
| Total revenues | $ | 482,952 | $ | 16,367 | $ | 499,319 | $ | 410,904 | $ | 14,716 | $ | 425,620 |
| __________________________ | ||||||||||||
| (1) As of September 30, 2021, Commercial Property and Land revenue has been further disaggregated into LoopNet, Residential and Other Marketplaces. | ||||||||||||
| Nine Months Ended September 30, | ||||||||||||
| 2021 | 2020 | |||||||||||
| North America | International | Total | North America | International | Total | |||||||
| CoStar | $ | 505,470 | $ | 26,958 | $ | 532,428 | $ | 473,363 | $ | 22,634 | $ | 495,997 |
| Information Services | 84,959 | 20,820 | 105,779 | 77,069 | 19,023 | 96,092 | ||||||
| Multifamily | 508,629 | — | 508,629 | 438,185 | — | 438,185 | ||||||
| LoopNet(1) | 151,770 | 1,082 | 152,852 | 131,348 | 256 | 131,604 | ||||||
| Residential(1) | 53,939 | — | 53,939 | — | — | — | ||||||
| Other Marketplaces(1) | 83,722 | — | 83,722 | 52,748 | — | 52,748 | ||||||
| Total revenues | $ | 1,388,489 | $ | 48,860 | $ | 1,437,349 | $ | 1,172,713 | $ | 41,913 | $ | 1,214,626 |
| __________________________ | ||||||||||||
| (1) As of September 30, 2021, Commercial Property and Land revenue has been further disaggregated into LoopNet, Residential and Other Marketplaces. | ||||||||||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Results of Segments - Unaudited | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| EBITDA | ||||||||||||
| North America | $ | 119,823 | $ | 107,906 | $ | 385,857 | $ | 322,611 | ||||
| International | 2,849 | 579 | 5,683 | (4,708) | ||||||||
| Total EBITDA | $ | 122,672 | $ | 108,485 | $ | 391,540 | $ | 317,903 | ||||
| CoStar Group, Inc. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Reconciliation of Non-GAAP Financial Measures with 2020-2021 Quarterly Results - Unaudited | ||||||||||||
| (in millions, except per share data) | ||||||||||||
| Reconciliation of Net Income to Non-GAAP Net Income | ||||||||||||
| 2020 | 2021 | |||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||
| Net income | $72.8 | $60.4 | $58.2 | $35.8 | $74.2 | $61.1 | $64.3 | |||||
| Income tax expense | 5.6 | 16.9 | 10.7 | 10.7 | 19.1 | 32.8 | 19.0 | |||||
| Income before income taxes | 78.4 | 77.3 | 68.9 | 46.4 | 93.3 | 93.9 | 83.3 | |||||
| Amortization of acquired intangible assets | 17.5 | 21.0 | 24.9 | 24.8 | 25.8 | 25.3 | 26.3 | |||||
| Stock-based compensation expense | 15.2 | 9.5 | 16.7 | 12.7 | 15.5 | 15.1 | 16.3 | |||||
| Acquisition and integration related costs | 8.7 | 10.0 | 7.9 | 65.9 | 8.5 | 2.0 | 5.0 | |||||
| Restructuring and related costs | — | — | 0.4 | — | — | — | — | |||||
| Other expense | — | — | 0.1 | — | 1.1 | 0.8 | 0.9 | |||||
| Non-GAAP income before income taxes | 119.8 | 117.8 | 118.9 | 149.8 | 144.2 | 137.1 | 131.8 | |||||
| Assumed rate for income tax expense (1) | 25% | 25% | 25% | 25% | 25% | 25% | 25% | |||||
| Assumed provision for income tax expense | (30.0) | (29.5) | (29.7) | (37.5) | (36.0) | (34.3) | (33.0) | |||||
| Non-GAAP net income | $89.8 | $88.3 | $89.2 | $112.3 | $108.2 | $102.8 | $98.8 | |||||
| Non-GAAP net income per share - diluted(2) | $0.24 | $0.23 | $0.23 | $0.29 | $0.27 | $0.26 | $0.25 | |||||
| Weighted average outstanding shares - basic(2) | 364.7 | 375.2 | 391.6 | 391.4 | 391.6 | 392.3 | 392.4 | |||||
| Weighted average outstanding shares - diluted(2) | 367.8 | 377.3 | 394.0 | 394.0 | 393.7 | 394.1 | 394.3 | |||||
| __________________________ | ||||||||||||
| (1) A 25% tax rate is assumed for 2021 and 2020, which approximates our statutory federal and state corporate tax rate. | ||||||||||||
| (2) 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 | ||||||||||||
| 2020 | 2021 | |||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||
| Net income | $72.8 | $60.4 | $58.2 | $35.8 | $74.2 | $61.1 | $64.3 | |||||
| Amortization of acquired intangible assets | 17.5 | 21.0 | 24.9 | 24.8 | 25.8 | 25.3 | 26.3 | |||||
| Depreciation and other amortization | 6.8 | 7.0 | 6.8 | 8.2 | 8.5 | 7.0 | 6.6 | |||||
| Interest (income) expense | (1.7) | 3.6 | 7.5 | 7.9 | 7.9 | 7.9 | 7.9 | |||||
| Other (income) expense | (0.8) | 0.4 | 0.3 | 0.9 | 0.1 | (0.8) | (1.5) | |||||
| Income tax expense | 5.6 | 16.9 | 10.7 | 10.7 | 19.1 | 32.8 | 19.0 | |||||
| EBITDA | $100.2 | $109.3 | $108.4 | $88.3 | $135.6 | $133.3 | $122.6 | |||||
| Stock-based compensation expense | 15.1 | 9.5 | 16.7 | 12.7 | 15.5 | 15.1 | 16.3 | |||||
| Acquisition and integration related costs | 8.7 | 10.0 | 7.9 | 65.9 | 8.5 | 2.0 | 5.0 | |||||
| Restructuring and related costs | — | — | 0.4 | — | — | — | — | |||||
| Adjusted EBITDA | $124.0 | $128.8 | $133.4 | $166.9 | $159.6 | $150.4 | $143.9 | |||||
| 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 December 31, 2021 | December 31, 2021 | |||||||||||
| Low | High | Low | High | |||||||||
| Net income | $ | 76,000 | $ | 80,000 | $ | 276,000 | $ | 280,000 | ||||
| Income tax expense | 25,000 | 26,000 | 96,000 | 97,000 | ||||||||
| Income before income taxes | 101,000 | 106,000 | 372,000 | 377,000 | ||||||||
| Amortization of acquired intangible assets | 26,000 | 26,000 | 103,000 | 103,000 | ||||||||
| Stock-based compensation expense | 17,000 | 17,000 | 64,000 | 64,000 | ||||||||
| Acquisition and integration related costs | 2,000 | 2,000 | 17,000 | 17,000 | ||||||||
| Other expense | 5,000 | 5,000 | 8,000 | 8,000 | ||||||||
| Non-GAAP income before income taxes | 151,000 | 156,000 | 564,000 | 569,000 | ||||||||
| Assumed rate for income tax expense(1) | 25 | % | 25 | % | 25 | % | 25 | % | ||||
| Assumed provision for income tax expense | (37,800) | (39,000) | (141,000) | (142,300) | ||||||||
| Non-GAAP net income | $ | 113,200 | $ | 117,000 | $ | 423,000 | $ | 426,700 | ||||
| Net income per share - diluted(2) | $ | 0.19 | $ | 0.20 | $ | 0.70 | $ | 0.71 | ||||
| Non-GAAP net income per share - diluted(2) | $ | 0.29 | $ | 0.30 | $ | 1.07 | $ | 1.08 | ||||
| Weighted average outstanding shares - diluted(2) | 394,400 | 394,400 | 394,000 | 394,000 | ||||||||
| __________________________ | ||||||||||||
| (1) A 25% tax rate is assumed, which approximates our statutory federal and state corporate tax rate. | ||||||||||||
| (2) 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 Forward-Looking Guidance, Net Income to Adjusted EBITDA | ||||||||||||
| Guidance Range | Guidance Range | |||||||||||
| For the Three Months | For the Year Ending | |||||||||||
| Ending December 31, 2021 | December 31, 2021 | |||||||||||
| Low | High | Low | High | |||||||||
| Net income | $ | 76,000 | $ | 80,000 | $ | 276,000 | $ | 280,000 | ||||
| Amortization of acquired intangible assets | 26,000 | 26,000 | 103,000 | 103,000 | ||||||||
| Depreciation and other amortization | 8,000 | 8,000 | 30,000 | 30,000 | ||||||||
| Interest expense | 8,000 | 8,000 | 32,000 | 32,000 | ||||||||
| Other (income) | (1,000) | (1,000) | (3,000) | (3,000) | ||||||||
| Income tax expense | 25,000 | 26,000 | 96,000 | 97,000 | ||||||||
| Stock-based compensation expense | 17,000 | 17,000 | 64,000 | 64,000 | ||||||||
| Acquisition and integration related costs | 2,000 | 2,000 | 17,000 | 17,000 | ||||||||
| Adjusted EBITDA | $ | 161,000 | $ | 166,000 | $ | 615,000 | $ | 620,000 |
Investor Relations:
Bill Warmington
Vice President
CoStar Group Investor Relations
(202) 346-5661
wwarmington@costar.com
News Media:
Matthew Blocher
Vice President
CoStar Group Corporate Marketing & Communications
(202) 346-6775
mblocher@costargroup.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. 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. Realla is the UK’s most comprehensive commercial property digital marketplace. 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 maintains offices throughout the U.S. and in Europe, Canada and Asia with a staff of approximately 4,800 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 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 or expectations are not met, including trends and expectations related to revenue, net income, non-GAAP net income, EBITDA, adjusted EBITDA, adjusted EBITDA margin, gross margin, sales, net new bookings, site traffic and visitors, leads, and renewal rates; the risk that pricing adjustments for Apartments.com do not achieve the anticipated results, including capturing the value of the lead flow delivered; the risk that the Company is unable to sustain current revenue and earnings, including CoStar, Ten-X and Homesnap revenue growth rates or increase them; the risk that the Company is unable to sustain current CoStar net new bookings; the risk that revenues for the fourth quarter and full year 2021 will not be as stated in this press release; the risk that net income for the fourth quarter and full year 2021 will not be as stated in this press release; the risk that adjusted EBITDA for the fourth quarter and full year 2021 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 fourth quarter and full year 2021 will not be as stated in this press release; the risk that the tax rate estimates stated in this press release may change; uncertainty surrounding the impact of the COVID-19 pandemic, including volatility in the international and U.S. economy and the commercial real estate industry, employee attrition, 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; and government and private actions taken to control the spread of COVID-19. 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, 2020 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, 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.