Costar group first quarter 2023 revenue increased 13% year-over-year and net new bookings grew 17% to $80 million
Washington--(business wire)--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 quarter ended march 31, 2023 was $584 million, an increase of 13% over revenue of $516 million for the quarter ended march 31, 2022. net income was $87 million and net income per diluted share was $0.21 for the first quarter of 2023. “costar group delivered exceptional revenue, sales and marketplace traffic results in the first quarter against a backdrop of rising interest rates and continued disruption in the commercial and residential property markets,” said andy florance, founder and chief executive officer of costar group. “company-wide revenue grew 13% year-over-year, with apartments.com delivering 20% revenue growth and loopnet achieving 16% revenue growth in the first quarter.” “our expanded sales team delivered the second highest quarterly net new bookings in our history of $80 million, an increase of 17% over the first quarter of 2022. apartments.com reached its highest sales quarter ever with a 110% increase in net new bookings over the prior year, and loopnet increased net new bookings by 100% on a year-over-year basis,” continued florance. “we are very pleased with the progress we are making building the new homes.com. when we acquired homes.com in may of 2021, the site had six million unique visitors according to google analytics,” said florance. “traffic in march of 2023 to the homes.com network surpassed 27 million unique monthly visitors. sequentially, homes.com’s unique visitors grew 41% in march over february of this year, and month to date in april homes.com’s traffic has grown 53% sequentially over the same period in march.” “last year we communicated an initial traffic goal of 25 million unique visitors and an intermediate traffic goal of 50 million unique visitors,” continued florance. “we are pleased to be crossing our initial goal and making great progress towards that intermediate goal. in march, we reached a new high of 94 million monthly unique visitors in total across homes.com, apartments.com, loopnet, and the rest of our marketplaces. we believe that by focusing on building a great user experience, combined with the lower friction of our “your listing, your lead” business model, many home buyers are coming to prefer homes.com.” year 2022-2023 quarterly results - unaudited (in millions, except per share data) 2022 2023 q1 q2 q3 q4 q1 revenues $516 $536 $557 $573 $584 net income 89 83 72 124 87 net income per share - diluted 0.23 0.21 0.18 0.31 0.21 weighted average outstanding shares - diluted 394 394 396 406 406 ebitda 158 140 129 155 98 adjusted ebitda 178 159 153 182 123 non-gaap net income 123 112 118 153 118 non-gaap net income per share - diluted 0.31 0.28 0.30 0.38 0.29 2023 outlook the company now expects revenue in the range of $2.465 billion to $2.48 billion for the full year of 2023, representing growth of approximately 13% to 14% for the year. the company expects revenue for the second quarter of 2023 in the range of $603 million to $608 million, representing revenue growth of approximately 13% year-over-year at the midpoint of the range. the company expects adjusted ebitda in the range of $505 million to $520 million for the full year of 2023. for the second quarter of 2023, the company expects adjusted ebitda in the range of $118 million to $123 million. the company is raising its full year 2023 non-gaap net income per diluted share outlook to reflect higher expected rates of return on investments. the new outlook range for non-gaap net income per diluted share is $1.21 to $1.24 based on 407 million shares, an increase of $0.15 per diluted share compared to the prior outlook. for the second quarter of 2023, the company expects non-gaap net income per diluted share in a range of $0.29 to $0.30 based on 407 million shares. these ranges include an estimated non-gaap tax rate of 26% for the full year and the second quarter of 2023. the preceding forward-looking statements reflect costar group’s expectations as of april 25, 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. reconciliations of ebitda, adjusted ebitda, non-gaap net income and non-gaap net income per diluted share to the most directly comparable gaap measures 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 income or expense, net and other income or expense, net; 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 ordinary 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 ordinary 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, changes to existing subscription-based contracts and cancellations of 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 first quarter 2023 results and the company’s outlook at 5:00 pm et on tuesday, april 25, 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 march 31, 2023 2022 revenues $ 584,366 $ 515,825 cost of revenues 119,196 95,479 gross profit 465,170 420,346 operating expenses: selling and marketing (excluding customer base amortization) 226,234 143,997 software development 66,590 54,021 general and administrative 89,508 77,961 customer base amortization 10,617 16,092 392,949 292,071 income from operations 72,221 128,275 interest income (expense), net 43,548 (7,718 ) other income, net 581 864 income before income taxes 116,350 121,421 income tax expense 29,219 32,103 net income $ 87,131 $ 89,318 net income per share - basic $ 0.22 $ 0.23 net income per share - diluted $ 0.21 $ 0.23 weighted-average outstanding shares - basic 404,490 392,895 weighted-average outstanding shares - diluted 406,157 394,234 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 march 31, 2023 2022 net income $ 87,131 $ 89,318 income tax expense 29,219 32,103 income before income taxes 116,350 121,421 amortization of acquired intangible assets 17,681 23,190 stock-based compensation expense 20,045 17,847 acquisition and integration related costs 1,655 1,639 restructuring and related costs 3,422 — settlements and impairments (77 ) — other expense, net — 2,036 non-gaap income before income taxes 159,076 166,133 assumed rate for income tax expense(1) 26 % 26 % assumed provision for income tax expense (41,360 ) (43,195 ) non-gaap net income $ 117,716 $ 122,938 net income per share - diluted $ 0.21 $ 0.23 non-gaap net income per share - diluted $ 0.29 $ 0.31 weighted average outstanding shares - basic 404,490 392,895 weighted average outstanding shares - diluted 406,157 394,234 __________________________ (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 march 31, 2023 2022 net income $ 87,131 $ 89,318 amortization of acquired intangible assets in cost of revenues 7,064 7,098 amortization of acquired intangible assets in operating expenses 10,617 16,092 depreciation and other amortization 7,946 6,965 interest (income) expense, net (43,548 ) 7,718 other income, net (581 ) (864 ) income tax expense 29,219 32,103 ebitda $ 97,848 $ 158,430 stock-based compensation expense 20,045 17,847 acquisition and integration related costs 1,655 1,639 restructuring and related costs 3,422 — settlements and impairments (77 ) — adjusted ebitda $ 122,893 $ 177,916 costar group, inc. condensed consolidated balance sheets - unaudited (in thousands) march 31, 2023 december 31, 2022 assets current assets: cash and cash equivalents $ 5,055,646 $ 4,967,970 accounts receivable 196,655 166,140 less: allowance for credit losses (14,897 ) (12,195 ) accounts receivable, net 181,758 153,945 prepaid expenses and other current assets 60,232 63,952 total current assets 5,297,636 5,185,867 deferred income taxes, net 9,722 9,722 property and equipment, net 330,836 321,250 lease right-of-use assets 76,174 80,392 goodwill 2,318,133 2,314,759 intangible assets, net 312,420 329,306 deferred commission costs, net 152,929 142,482 deposits and other assets 17,057 16,687 income tax receivable 2,005 2,005 total assets $ 8,516,912 $ 8,402,470 liabilities and stockholders' equity current liabilities: accounts payable $ 31,664 $ 28,460 accrued wages and commissions 89,352 104,988 accrued expenses 86,669 89,113 income taxes payable 39,481 10,438 lease liabilities 36,050 36,049 deferred revenue 117,805 103,567 total current liabilities 401,021 372,615 long-term debt, net 989,533 989,210 deferred income taxes, net 73,359 76,202 income taxes payable 15,295 14,001 lease and other long-term liabilities 72,095 80,321 total liabilities $ 1,551,303 $ 1,532,349 total stockholders' equity 6,965,609 6,870,121 total liabilities and stockholders' equity $ 8,516,912 $ 8,402,470 costar group, inc. condensed consolidated statements of cash flows - unaudited (in thousands) three months ended march 31, 2023 2022 operating activities: net income $ 87,131 $ 89,318 adjustments to reconcile net income to net cash provided by operating activities: depreciation and amortization 25,627 32,190 amortization of deferred commissions costs 21,889 17,583 amortization of senior notes discount and issuance costs 597 588 non-cash lease expense 6,769 7,537 stock-based compensation expense 20,045 17,847 deferred income taxes, net (2,907 ) (10,211 ) credit loss expense 4,683 3,321 other operating activities, net 277 (30 ) changes in operating assets and liabilities, net of acquisitions: accounts receivable (32,157 ) (13,724 ) prepaid expenses and other current assets (5,735 ) (385 ) deferred commissions (32,281 ) (25,829 ) accounts payable and other liabilities (13,731 ) (32,581 ) lease liabilities (10,006 ) (7,822 ) income taxes payable, net 39,609 41,154 deferred revenue 13,797 12,417 other assets (391 ) (666 ) net cash provided by operating activities 123,216 130,707 investing activities: purchase of richmond assets (15,713 ) — purchases of property and equipment and other assets (3,917 ) (12,401 ) net cash used in investing activities (19,630 ) (12,401 ) financing activities: repurchase of restricted stock to satisfy tax withholding obligations (21,631 ) (19,459 ) proceeds from exercise of stock options and employee stock purchase plan 5,731 3,705 net cash used in financing activities (15,900 ) (15,754 ) effect of foreign currency exchange rates on cash and cash equivalents (10 ) (581 ) net increase in cash and cash equivalents 87,676 101,971 cash and cash equivalents at the beginning of period 4,967,970 3,827,126 cash and cash equivalents at the end of period $ 5,055,646 $ 3,929,097 costar group, inc. disaggregated revenues - unaudited (in thousands) three months ended march 31, 2023 2022 north america international total north america international total costar $ 215,813 $ 9,200 $ 225,013 $ 189,104 $ 9,545 $ 198,649 information services 32,100 9,529 41,629 30,271 6,944 37,215 multifamily 210,697 — 210,697 175,477 — 175,477 loopnet 61,179 2,058 63,237 52,688 1,759 54,447 residential 13,153 — 13,153 18,060 — 18,060 other marketplaces 30,637 — 30,637 31,977 — 31,977 total revenues $ 563,579 $ 20,787 $ 584,366 $ 497,577 $ 18,248 $ 515,825 costar group, inc. results of segments - unaudited (in thousands) three months ended march 31, 2023 2022 ebitda north america $ 96,656 $ 155,962 international 1,192 2,468 total ebitda $ 97,848 $ 158,430 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 2022 2023 q1 q2 q3 q4 q1 net income $ 89.3 $ 83.5 $ 72.3 $ 124.4 $ 87.1 income tax expense 32.1 24.7 25.1 35.2 29.2 income before income taxes 121.4 108.1 97.4 159.5 116.4 amortization of acquired intangible assets 23.2 22.8 36.6 20.0 17.7 stock-based compensation expense 17.8 18.1 18.1 21.1 20.0 acquisition and integration related costs 1.6 0.5 1.1 2.2 1.7 restructuring and related costs — — 0.2 2.0 3.4 settlements and impairments — — 4.1 2.0 (0.1 ) other expense, net 2.0 2.1 2.1 — — non-gaap income before income taxes(1) 166.1 151.6 159.6 206.7 159.1 assumed rate for income tax expense (2) 26 % 26 % 26 % 26 % 26 % assumed provision for income tax expense (43.2 ) (39.4 ) (41.5 ) (53.8 ) (41.4 ) non-gaap net income(1) $ 122.9 $ 112.2 $ 118.1 $ 153.0 $ 117.7 non-gaap net income per share - diluted $ 0.31 $ 0.28 $ 0.30 $ 0.38 $ 0.21 weighted average outstanding shares - basic 392.9 393.3 394.7 404.2 404.5 weighted average outstanding shares - diluted 394.2 394.5 396.2 406.1 406.2 __________________________ (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. reconciliation of net income to ebitda and adjusted ebitda 2022 2023 q1 q2 q3 q4 q1 net income $ 89.3 $ 83.5 $ 72.3 $ 124.4 $ 87.1 amortization of acquired intangible assets 23.2 22.8 36.6 20.0 17.7 depreciation and other amortization 7.0 7.0 7.2 7.9 7.9 interest expense (income), net 7.7 3.4 (10.7 ) (32.6 ) (43.5 ) other (income) expense, net (0.9 ) (1.3 ) (1.4 ) 0.2 (0.6 ) income tax expense 32.1 24.7 25.1 35.2 29.2 ebitda(1) $ 158.4 $ 140.0 $ 129.1 $ 155.1 $ 97.8 stock-based compensation expense 17.8 18.1 18.1 21.1 20.0 acquisition and integration related costs 1.6 0.5 1.1 2.2 1.7 restructuring and related costs — — 0.2 2.0 3.4 settlements and impairments — — 4.1 2.0 (0.1 ) adjusted ebitda(1) $ 177.9 $ 158.6 $ 152.7 $ 182.3 $ 122.9 __________________________ (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 june 30, 2023 december 31, 2023 low high low high net income $ 90,000 $ 93,000 $ 372,000 $ 384,000 income tax expense 31,000 33,000 130,000 133,000 income before income taxes 121,000 126,000 502,000 517,000 amortization of acquired intangible assets 17,000 17,000 69,000 69,000 stock-based compensation expense 23,000 23,000 92,000 92,000 acquisition and integration related costs — — 2,000 2,000 restructuring and related costs — — 3,000 3,000 non-gaap income before income taxes 161,000 166,000 668,000 683,000 assumed rate for income tax expense(1) 26 % 26 % 26 % 26 % assumed provision for income tax expense (41,900 ) (43,200 ) (173,700 ) (177,600 ) non-gaap net income $ 119,100 $ 122,800 $ 494,300 $ 505,400 net income per share - diluted $ 0.22 $ 0.23 $ 0.91 $ 0.94 non-gaap net income per share - diluted $ 0.29 $ 0.30 $ 1.21 $ 1.24 weighted average outstanding shares - diluted 406,700 406,700 406,900 406,900 __________________________ (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 june 30, 2023 december 31, 2023 low high low high net income $ 90,000 $ 93,000 $ 372,000 $ 384,000 amortization of acquired intangible assets 17,000 17,000 69,000 69,000 depreciation and other amortization 8,000 8,000 34,000 34,000 interest income, net (51,000 ) (51,000 ) (196,000 ) (196,000 ) other income, net — — (1,000 ) (1,000 ) income tax expense 31,000 33,000 130,000 133,000 stock-based compensation expense 23,000 23,000 92,000 92,000 acquisition and integration related costs — — 2,000 2,000 restructuring and related costs — — 3,000 3,000 adjusted ebitda $ 118,000 $ 123,000 $ 505,000 $ 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 is the fastest growing online residential marketplace in the united states. 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 second quarter and full year 2023 will not be as stated in this press release; the risk that net income for the second quarter and full year 2023 will not be as stated in this press release; the risk that ebitda for the second quarter and full year 2023 will not be as stated in this press release; the risk that adjusted ebitda for the second 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 second 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 (the "sec"), including in costar group’s annual report on form 10-k for the year ended december 31, 2022 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.
