Costar group second quarter 2022 net new bookings grew 66% and net income increased 37% year-over-year
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 june 30, 2022, was $536 million, an increase of 12% over revenue of $480 million for the second quarter of 2021. net income for the second quarter of 2022 was $83 million, an increase of 37% compared to net income of $61 million for the second quarter of 2021. ebitda for the second quarter of 2022 was $140 million, an increase of 5% compared to ebitda of $133 million for the second quarter of 2021. “we delivered outstanding results in the second quarter of 2022,” said andrew c. florance, founder and chief executive officer of costar group. “with net new bookings of $84 million we easily surpassed the record sales results we set in the first quarter of this year. our top three products, costar, apartments.com and loopnet, all achieved high double-digit sales increases over the second quarter of 2021. in addition, both revenue and profit in the second quarter of 2022 were ahead of forecast and we are raising our guidance for the year.” “i am particularly encouraged by the strong sales growth in apartments.com and loopnet", continued florance. "net new bookings increased over 130% in apartments.com and over 40% for loopnet on a year-over-year basis. it is increasingly clear that multifamily market conditions continue to be more favorable, and our work to build a dedicated loopnet sales team is paying off. we are also making strong progress on our residential growth initiatives with the on-time launch of citysnap in new york city at the end of june." year 2021-2022 quarterly results - unaudited (in millions, except per share data) 2021 2022 q1 q2 q3 q4 q1 q2 revenues $458 $480 $499 $507 $516 $536 net income 74 61 64 93 89 83 net income per share - diluted(1) 0.19 0.16 0.16 0.24 0.23 0.21 weighted average outstanding shares - diluted(1) 394 394 394 395 394 394 ebitda 136 133 123 173 158 140 adjusted ebitda 160 150 144 193 178 159 non-gaap net income 108 103 99 138 123 112 non-gaap net income per share - diluted(1) 0.27 0.26 0.25 0.35 0.31 0.28 (1) certain 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 june 30, 2022, the company had approximately $4.0 billion in cash, cash equivalents and restricted cash and outstanding debt of approximately $1.0 billion. 2022 outlook the company is raising its revenue guidance to a range of $2.165 billion to $2.180 billion for the full year of 2022, an increase of $13 million at the midpoint of the range compared to the prior outlook. the company expects revenue for the third quarter of 2022 in the range of $552 million to $557 million, representing revenue growth of approximately 11% over the third quarter of 2021 at the midpoint of the range. the company is raising its adjusted ebitda guidance to a range of $610 million to $630 million for the full year of 2022, an increase of $20 million at the midpoint of the range compared to the prior outlook. for the third quarter of 2022, the company expects adjusted ebitda in a range of $130 million to $140 million. the company expects full year 2022 non-gaap net income per diluted share in a range of $1.09 to $1.13 based on 395 million shares, an increase of $0.11 per diluted share compared to the prior outlook. for the third quarter of 2022, the company expects non-gaap net income per diluted share in a range of $0.23 to $0.25 based on 395 million shares. these ranges include an estimated non-gaap tax rate of 26% for the full year and the third quarter of 2022. the preceding forward-looking statements reflect costar group’s expectations as of july 26, 2022, 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 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. 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 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 2022, 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 and changes to existing 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 second quarter 2022 results and the company’s outlook at 5:00 pm est on tuesday, july 26, 2022. 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 june 30, six months ended june 30, 2022 2021 2022 2021 revenues $ 536,308 $ 480,333 $ 1,052,133 $ 938,030 cost of revenues 100,971 89,566 196,450 178,314 gross profit 435,337 390,767 855,683 759,716 operating expenses: selling and marketing (excluding customer base amortization) 181,344 164,612 325,341 303,299 software development 51,587 48,573 105,608 95,357 general and administrative 77,345 58,226 155,306 122,076 customer base amortization 14,878 18,345 30,970 36,764 325,154 289,756 617,225 557,496 income from operations 110,183 101,011 238,458 202,220 interest expense, net (3,399 ) (7,877 ) (11,117 ) (15,755 ) other income, net 1,343 847 2,207 797 income before income taxes 108,127 93,981 229,548 187,262 income tax expense 24,654 32,833 56,757 51,902 net income $ 83,473 $ 61,148 $ 172,791 $ 135,360 net income per share - basic $ 0.21 $ 0.16 $ 0.44 $ 0.35 net income per share - diluted $ 0.21 $ 0.16 $ 0.44 $ 0.34 weighted-average outstanding shares - basic 393,342 392,306 393,119 391,942 weighted-average outstanding shares - diluted 394,478 394,098 394,356 393,906 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 june 30, six months ended june 30, 2022 2021 2022 2021 net income $ 83,473 $ 61,148 $ 172,791 $ 135,360 income tax expense 24,654 32,833 56,757 51,902 income before income taxes 108,127 93,981 229,548 187,262 amortization of acquired intangible assets 22,815 25,293 46,005 51,120 stock-based compensation expense 18,112 15,144 35,959 30,689 acquisition and integration related costs 504 2,001 2,143 10,463 other expense 2,063 786 4,099 1,857 non-gaap income before income taxes 151,621 137,205 317,754 281,391 assumed rate for income tax expense(1) 26 % 25 % 26 % 25 % assumed provision for income tax expense (39,421 ) (34,301 ) (82,616 ) (70,348 ) non-gaap net income $ 112,200 $ 102,904 $ 235,138 $ 211,043 net income per share - diluted $ 0.21 $ 0.16 $ 0.44 $ 0.34 non-gaap net income per share - diluted $ 0.28 $ 0.26 $ 0.60 $ 0.54 weighted average outstanding shares - basic 393,342 392,306 393,119 391,942 weighted average outstanding shares - diluted 394,478 394,098 394,356 393,906 (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 june 30, six months ended june 30, 2022 2021 2022 2021 net income $ 83,473 $ 61,148 $ 172,791 $ 135,360 amortization of acquired intangible assets in cost of revenues 7,937 6,948 15,035 14,356 amortization of acquired intangible assets in operating expenses 14,878 18,345 30,970 36,764 depreciation and other amortization 7,010 7,028 13,975 15,528 interest expense, net 3,399 7,877 11,117 15,755 other income, net (1,343 ) (847 ) (2,207 ) (797 ) income tax expense 24,654 32,833 56,757 51,902 ebitda $ 140,008 $ 133,332 $ 298,438 $ 268,868 stock-based compensation expense 18,112 15,144 35,959 30,689 acquisition and integration related costs 504 2,001 2,143 10,463 adjusted ebitda $ 158,624 $ 150,477 $ 336,540 $ 310,020 costar group, inc. condensed consolidated balance sheets - unaudited (in thousands) june 30, 2022 december 31, 2021 assets current assets: cash, cash equivalents and restricted cash $ 3,964,116 $ 3,827,126 accounts receivable 161,811 138,191 less: allowance for credit losses (9,638 ) (13,374 ) accounts receivable, net 152,173 124,817 income tax receivable 9,278 — prepaid expenses and other current assets 55,194 36,182 total current assets 4,180,761 3,988,125 deferred income taxes, net 5,034 5,034 property and equipment, net 298,361 271,431 lease right-of-use assets 98,495 100,680 goodwill 2,314,176 2,321,015 intangible assets, net 385,245 435,662 deferred commission costs, net 119,778 101,879 deposits and other assets 16,893 21,762 income tax receivable 2,005 11,283 total assets $ 7,420,748 $ 7,256,871 liabilities and stockholders' equity current liabilities: accounts payable $ 32,132 $ 22,244 accrued wages and commissions 84,545 81,794 accrued expenses 91,168 81,676 income taxes payable 1,841 31,236 lease liabilities 35,426 26,268 deferred revenue 104,838 95,471 total current liabilities 349,950 338,689 long-term debt, net 988,572 987,944 deferred income taxes, net 87,657 98,656 income taxes payable 14,112 12,496 lease and other long-term liabilities 96,104 107,414 total liabilities $ 1,536,395 $ 1,545,199 total stockholders’ equity 5,884,353 5,711,672 total liabilities and stockholders' equity $ 7,420,748 $ 7,256,871 costar group, inc. condensed consolidated statements of cash flows - unaudited (in thousands) six months ended june 30, 2022 2021 operating activities: net income $ 172,791 $ 135,360 adjustments to reconcile net income to net cash provided by operating activities: depreciation and amortization 64,127 68,516 amortization of deferred commissions costs 35,996 30,847 amortization of senior notes discount and issuance costs 1,178 1,159 non-cash lease expense 15,080 13,136 stock-based compensation expense 35,959 30,689 deferred income taxes, net (14,946 ) 9,929 credit loss expense 6,890 6,086 other operating activities, net (1,149 ) (24 ) changes in operating assets and liabilities, net of acquisitions: accounts receivable (33,318 ) (8,526 ) prepaid expenses and other current assets 3,152 (14,567 ) deferred commissions (54,155 ) (31,922 ) accounts payable and other liabilities 14,098 (32,474 ) lease liabilities (15,932 ) (15,674 ) income taxes payable (27,770 ) 9,415 deferred revenue 8,520 16,148 other assets 1,578 2,191 net cash provided by operating activities 212,099 220,289 investing activities: proceeds from sale of property and equipment and other assets 5,034 201 purchase of richmond assets and other intangibles (25,664 ) (123,623 ) purchases of property and equipment and other assets (30,746 ) (13,093 ) cash paid for acquisitions, net of cash acquired (6,331 ) (148,275 ) net cash used in investing activities (57,707 ) (284,790 ) financing activities: repayments of long-term debt assumed in acquisition (2,155 ) — repurchase of restricted stock to satisfy tax withholding obligations (19,755 ) (28,405 ) proceeds from exercise of stock options and employee stock purchase plan 7,340 12,324 other financing activities — (57 ) net cash used in financing activities (14,570 ) (16,138 ) effect of foreign currency exchange rates on cash and cash equivalents (2,832 ) (364 ) net increase (decrease) in cash, cash equivalents and restricted cash 136,990 (81,003 ) cash, cash equivalents and restricted cash at the beginning of period 3,827,126 3,755,912 cash, cash equivalents and restricted cash at the end of period $ 3,964,116 $ 3,674,909 costar group, inc. disaggregated revenues - unaudited (in thousands) three months ended june 30, 2022 2021 north america international total north america international total costar $ 197,380 $ 9,186 $ 206,566 $ 167,845 $ 9,134 $ 176,979 information services 30,511 7,991 38,502 28,096 7,061 35,157 multifamily 182,359 — 182,359 171,357 — 171,357 loopnet(1) 54,603 1,694 56,297 50,731 364 51,095 residential(1) 20,154 — 20,154 18,087 — 18,087 other marketplaces(1) 32,430 — 32,430 27,658 — 27,658 total revenues $ 517,437 $ 18,871 $ 536,308 $ 463,774 $ 16,559 $ 480,333 (1) as of september 30, 2021, commercial property and land revenue has been further disaggregated into loopnet, residential and other marketplaces. prior period amounts have been adjusted to reflect this presentation. six months ended june 30, 2022 2021 north america international total north america international total costar $ 386,484 $ 18,731 $ 405,215 $ 331,399 $ 17,764 $ 349,163 information services 60,782 14,935 75,717 55,782 14,071 69,853 multifamily 357,836 — 357,836 337,504 — 337,504 loopnet(1) 107,291 3,453 110,744 99,667 658 100,325 residential(1) 38,214 — 38,214 29,192 — 29,192 other marketplaces(1) 64,407 — 64,407 51,993 — 51,993 total revenues $ 1,015,014 $ 37,119 $ 1,052,133 $ 905,537 $ 32,493 $ 938,030 (1) as of september 30, 2021, commercial property and land revenue has been further disaggregated into loopnet, residential and other marketplaces. prior period amounts have been adjusted to reflect this presentation. costar group, inc. results of segments - unaudited (in thousands) three months ended june 30, six months ended june 30, 2022 2021 2022 2021 ebitda north america $ 138,527 $ 130,176 $ 294,489 $ 266,034 international 1,481 3,156 3,949 2,834 total ebitda $ 140,008 $ 133,332 $ 298,438 $ 268,868 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 2021 2022 q1 q2 q3 q4 q1 q2 net income $74.2 $61.1 $64.3 $92.9 $89.3 $83.5 income tax expense 19.1 32.8 19.0 40.5 32.1 24.7 income before income taxes 93.3 93.9 83.3 133.4 121.4 108.1 amortization of acquired intangible assets 25.8 25.3 26.3 26.2 23.2 22.8 stock-based compensation expense 15.5 15.1 16.3 16.7 17.8 18.1 acquisition and integration related costs 8.5 2.0 5.0 3.2 1.6 0.5 other expense 1.1 0.8 0.9 4.1 2.0 2.1 non-gaap income before income taxes(1) 144.2 137.1 131.8 183.6 166.1 151.6 assumed rate for income tax expense (2) 25% 25% 25% 25% 26% 26% assumed provision for income tax expense (36.0) (34.3) (33.0) (45.9) (43.2) (39.4) non-gaap net income(1) $108.2 $102.8 $98.8 $137.7 $122.9 $112.2 non-gaap net income per share - diluted(3) $0.27 $0.26 $0.25 $0.35 $0.31 $0.28 weighted average outstanding shares - basic(3) 391.6 392.3 392.4 392.5 392.9 393.3 weighted average outstanding shares - diluted(3) 393.7 394.1 394.3 394.5 394.2 394.5 __________________________ (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. (3) certain 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 2021 2022 q1 q2 q3 q4 q1 q2 net income $74.2 $61.1 $64.3 $92.9 $89.3 $83.5 amortization of acquired intangible assets 25.8 25.3 26.3 26.2 23.2 22.8 depreciation and other amortization 8.5 7.0 6.6 6.9 7.0 7.0 interest expense, net 7.9 7.9 7.9 7.9 7.7 3.4 other (income) expense, net 0.1 (0.8) (1.5) (0.9) (0.9) (1.3) income tax expense 19.1 32.8 19.0 40.5 32.1 24.7 ebitda(1) $135.6 $133.3 $122.6 $173.4 $158.4 $140.0 stock-based compensation expense 15.5 15.1 16.3 16.7 17.8 18.1 acquisition and integration related costs 8.5 2.0 5.0 3.2 1.6 0.5 adjusted ebitda(1) $159.6 $150.4 $143.9 $193.4 $177.9 $158.6 __________________________ (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 september 30, 2022 december 31, 2022 low high low high net income $ 63,000 $ 71,000 $ 310,000 $ 325,000 income tax expense 22,000 24,000 104,000 109,000 income before income taxes 85,000 95,000 414,000 434,000 amortization of acquired intangible assets 21,000 21,000 88,000 88,000 stock-based compensation expense 19,000 19,000 74,000 74,000 acquisition and integration related costs — — 2,000 2,000 other expense — — 4,000 4,000 non-gaap income before income taxes 125,000 135,000 582,000 602,000 assumed rate for income tax expense(1) 26 % 26 % 26 % 26 % assumed provision for income tax expense (32,500 ) (35,100 ) (151,300 ) (156,500 ) non-gaap net income $ 92,500 $ 99,900 $ 430,700 $ 445,500 net income per share - diluted $ 0.16 $ 0.18 $ 0.79 $ 0.82 non-gaap net income per share - diluted $ 0.23 $ 0.25 $ 1.09 $ 1.13 weighted average outstanding shares - diluted 394,800 394,800 394,700 394,700 __________________________ (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 september 30, 2022 december 31, 2022 low high low high net income $ 63,000 $ 71,000 $ 310,000 $ 325,000 amortization of acquired intangible assets 21,000 21,000 88,000 88,000 depreciation and other amortization 10,000 10,000 34,000 34,000 interest expense, net (5,000 ) (5,000 ) 1,000 1,000 other income, net — — (3,000 ) (3,000 ) income tax expense 22,000 24,000 104,000 109,000 stock-based compensation expense 19,000 19,000 74,000 74,000 acquisition and integration related costs — — 2,000 2,000 adjusted ebitda $ 130,000 $ 140,000 $ 610,000 $ 630,000 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 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 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 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 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 and that multifamily market conditions remain favorable; the risk that revenues for the third quarter and full year 2022 will not be as stated in this press release; the risk that net income for the third quarter and full year 2022 will not be as stated in this press release; the risk that ebitda for the third quarter and full year 2022 will not be as stated in this press release; the risk that adjusted ebitda for the third quarter and full year 2022 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 third quarter and full year 2022 will not be as stated in this press release; the risk that the tax rate estimates stated in this press release may change; and potential declines in our revenues, revenue growth rates and profitability due to the impact of the covid-19 pandemic on the commercial real estate industry and 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, including in costar group’s annual report on form 10-k for the year ended december 31, 2021 and quarterly report on form 10-q for the quarter ended march 31, 2022, 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.
