Another strong quarter for CoStar as revenue, site traffic climbs
The commercial and residential real estate giant continues to grow revenue and income while also investing in Homes.com.
CoStar Group, which operates real estate search portals including Homes.com and Apartments.com, reported solid revenue growth and traffic to its websites.
The company, which also offers numerous commercial property services, reported revenue of $606 million, a 13% increase compared to a year ago. Earnings came in at 31 cents per share, slightly beating expectations of 30 cents per share.
Traffic to all of CoStar's websites hit a new high of 105 million unique visitors in June, exceeding 100 million in the second quarter for the first time, the company reported, while Homes.com traffic grew 130% year-over-year in June to 38 million unique visitors.
"I'm very encouraged by the progress we are making with our Homes.com strategy, as our traffic growth continues ahead of our initial expectations," said Andy Florance, founder and CEO of CoStar Group.
In a conference call following the release of the earnings report, Florance emphasized that reaching Homes.com's goals is a marathon, not a sprint.
"I believe we have a lot of runway ahead as we continue to implement our content, product and marketing plans," Florance said during the call. "We're clear that we have more and bigger traffic levers to pull to grow traffic over the quarters to come."
Florance estimated the company was "in the second inning" in terms of delivering content and other additions to Homes.com.
"What we'll be able to do with that content in the next year or so will be really quite impressive and I think it will be a really compelling value proposition for our platform," Florance said.
Key numbers
Revenue: $606 million in the second quarter, up 13% from a year ago.
Cash and cash equivalents: $5.2 billion at the end of June, up from $4.97 billion at the end of 2022.
Gross profit: $493 million for the quarter, up nearly $60 million year-over-year.
Net income: $187.7 million for the first half of 2023, up 8.6% compared to the same period of 2022. For the second quarter, net income was $101 million, up 20% year-over-year.
EBITDA (earnings before interest, taxes, depreciation and amortization): $105 million, down from $140 million a year ago but up slightly from the first quarter.
Net income per share: 31 cents, up from 28 cents a year ago.
What CoStar had to say
"We achieved another great quarter of very strong results in terms of revenue, sales and traffic to our websites," said Florance.
"Achieving these results, despite commercial property transactions plummeting 63% in the second quarter, demonstrates the resilience of our platforms."
Looking ahead, CoStar expects third-quarter revenue to be in the $622 million to $627 million range, with the midpoint representing 12% year-over-year growth.