CoStar revenue still going strong, but income keeps falling 

While CoStar Group continues to post strong revenue gains, its latest earnings report suggests that its momentum may be slowing. 

Revenue hit $709 million for the quarter, which exceeded analyst estimates of $701 million, according to The Motley Fool. Income, however, was down each quarter of 2024 compared to the same period in 2023, and earnings per share fell short of investor expectations.

Still, relative to many of its industry peers, CoStar Group — which operates a wide variety of real estate services including Homes.com and Apartments.com — has maintained an impressive run. Its 11% growth in revenue last quarter marked the company's 55th consecutive quarter of double-digit revenue gains.

"CoStar Group delivered another strong year of profitable revenue in 2024," said Founder and CEO Andy Florance, but the company is tempering expectations for the year ahead. In its 2025 outlook, CoStar forecast slightly lower levels of revenue growth: 9% for the first quarter and 10% for the full year. 

The company is also embarking on a stock buyback plan of up to $500 million in 2025, according to Nasdaq.com.

After initially falling in after-hours trading on Feb. 18, CoStar's stock rebounded on Feb. 19, rising nearly 4% by midday.

Homes.com sales force and traffic growth

Florance told investors during a Feb. 18 earnings call that after some initial staffing challenges, the company has grown the Homes.com sales team nearly six-fold to 277 employees. He expects that number to reach 500 by the end of the year, slightly less than the 600 sales reps Florance predicted in October.

A larger team could boost sales in 2025 following declines last year. Wall Street analyst John Campbell said in November that while Homes.com has a solid foundation and "crushed it" in terms of sales in the first quarter of 2024, those numbers fell sharply as the year progressed. 

Traffic-wise, however, the Homes.com network continues to grow, with the company reporting an 11% year-over-year increase in unique users in the fourth quarter. In its presentation to investors, CoStar said the latest numbers show that the "Homes.com Network solidified its position as the #2 U.S. residential real estate marketplace."

Plans to 'win away' rentals from rivals

Florance also addressed Zillow's ongoing push into rentals, which includes a recent partnership agreement with Redfin and a similar deal with Realtor.com earlier in the year. CoStar's Apartments.com rentals site continues to have higher brand awareness than Zillow, Florance said, adding that the company plans to increase Apartment.com's sales staff by 23%.

"We see a large opportunity to win away many of the properties formerly marketed on Rent.com without paying Redfin a massive sum of money," Florance said, referring to the $100 million Zillow paid Redfin upfront to be its exclusive provider of multifamily rental listings.

Key numbers

Revenue: $709 million in the fourth quarter, up 11% year-over-year. For the full year, the company reported $2.74 billion in revenue, which was also up 11% compared to 2023.

Cash and cash equivalents: $4.68 billion at the end of 2024, down from $5.22 billion at the end of 2023.

Gross profit: $568.5 million in Q4, up from $503.8 million a year ago.

Net income: $59.8 million in Q4, down from $96.4 million a year ago.

EBITDA (earnings before interest, taxes, depreciation and amortization): $72.9 million in Q4, down from $98 million a year ago.

Website traffic: The Homes.com network had 110 million average monthly unique visitors in the fourth quarter of 2024, up 11% year-over-year, the company reported. Traffic to all of the CoStar Group sites reached 134 million average monthly unique visitors for the fourth quarter, up 17% year-over-year.

Notable moves

CoStar announced on Feb. 14 that it acquired the agricultural data company Ag-Analytics. The acquisition will enhance CoStar's Land.com platform, according to a company news release.