COSTAR GROUP INC
For the period ended Mar 31, 2025. Filed May 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
CSGP$30.55-4.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-23.
0001057352-24-000125
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0001057352-25-000067
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 201 previous paragraphs and 152 current paragraphs.
57 unchanged; 58 reworded; 37 added; 81 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (37)
Current report
We provide real estate and lease management technology solutions, including lease administration, lease accounting, transaction management, and professional services through our CoStar Real Estate Manager and Visual Lease service offerings. Information Services' revenue growth rate for the three months ended March 31, 2025 accelerated compared to the revenue growth rate for the three months ended March 31, 2024 primarily as a result of the Visual Lease Acquisition. We expect the Information Services revenue growth rate for the year ending December 31, 2025 to accelerate compared to the revenue growth rate for the year ended December 31, 2024 as a result of the Visual Lease Acquisition.
Current report
Homes.com offers real estate agents subscription memberships promoting the agent's home listings and profile on our websites. Homebuyers and real estate agents use Homes.com to find their dream homes using our proprietary research and neighborhood content combined with listing information. OnTheMarket is a property portal in the U.K., which primarily hosts agents' listings on a subscription basis. Residential's revenues for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024, primarily due to an increase in the number of Homes.com memberships, partially offset by the discontinuation of certain products that were inconsistent with our long-term business strategy. We expect Residential's revenues for the year ending December 31, 2025 to increase compared to the year ended December 31, 2024 due to additional sales of our Homes.com memberships.
Current report
Other Revenues
Current report
•Continuing to invest in and develop Homes.com. In 2024, we launched Homes.com memberships giving real estate agents the ability to advertise and promote their listings on our website featuring original, media rich content. In 2025, we plan to continue hiring our dedicated Homes.com sales force. We plan to continue to raise unaided brand awareness of the site through targeted marketing campaigns and to continue to focus on attracting recurring visitors to the site. In addition, we plan to develop and market additional products.
Current report
•Integrating Matterport's existing AI, computer vision, and machine learning across our products to build features that will enhance user experience to drive better engagement with our existing products and use the capability from the Matterport Acquisition to increase development of AI, computer vision, and machine learning to improve property analytics, optimize operational efficiency, and broaden the use of digital twin technologies throughout the real estate industry. We also intend to integrate Matterports's equipment and services into new market offerings to customers.
Current report
•Continuing to expand our CoStar and LoopNet products internationally. We continue to increase our international research team to collect data in European markets. We plan to launch our LoopNet brand in France and Spain and continue to expand our footprint of commercial listings.
Current report
•Using the aggregate and anonymized data from leases within CoStar Real Estate Manager and Visual Lease to create a trusted source of pricing and occupancy information for Commercial Real Estate. We also plan to begin the integration of the CoStar Real Estate Manager and Visual Lease products.
Current report
•an increase in Multifamily revenues of $28 million, or 11%, due to an increase in the number of properties listed on our network, as well as customers selecting higher-priced ad packages,
Current report
•an increase in CoStar revenues of $15 million, or 6%, due to increased sales driven by inflation-based price increases on renewals and an increase in subscribers,
Current report
•an increase in Other revenues of $14 million, or 46%, primarily due to the Matterport Acquisition,
Current report
•an increase in Residential revenues of $9 million, or 46%, due to an increase in the number of Homes.com memberships, partially offset by the discontinuation of certain products that were inconsistent with our long-term business strategy,
Current report
•an increase in Information Services revenues of $7 million, or 21%, primarily attributable to the Visual Lease Acquisition, and
Current report
•an increase in personnel costs of $4 million due to the Matterport Acquisition,
Current report
•an increase in personnel costs of $20 million related to sales hiring, partially offset by a decrease in marketing expenses of $17 million.
Current report
•an increase in personnel costs of $8 million, primarily related to increases in salaries and stock-based compensation as a result of the Matterport Acquisition, and
Current report
•an increase in Multifamily revenues of $28 million, due to an increase in the number of properties listed on our network, as well as customers selecting higher-priced ad packages,
Current report
•an increase in Other revenues of $14 million, due to the Matterport Acquisition,
Current report
•an increase in Information Services revenues of $9 million, primarily attributable to the Visual Lease Acquisition,
Current report
•an increase in Residential revenues of $8 million, due to an increase in the number of Homes.com memberships, partially offset by the discontinuation of certain products that were inconsistent with our long-term business strategy, and
Current report
•an increase in LoopNet revenues of $4 million, due to an increase in the average price per listing, as well as the number of listings.
Current report
The $2 million, or 5%, increase in International revenues was primarily attributable to an increase in CoStar sales driven by inflation-based price increases on renewals and an increase in subscribers.
Current report
Domain Transaction. From February 20, 2025 through February 21, 2025, in connection with the Domain Proposal, we acquired approximately 17% of the ordinary shares of Domain at $4.20 AUD per share for a total purchase price of $452 million AUD ($285 million). We expect to spend $2.4 billion AUD ($1.5 billion) to acquire the remaining approximately 83% of the ordinary shares of Domain upon consummation of the Domain Transaction.
Current report
On March 31, 2025, the Company entered into the Exclusivity Deed with Domain pursuant to which Domain granted us a period of exclusivity to undertake due diligence in connection with the Domain Proposal. In accordance with the terms of the Exclusivity Deed, the initial four-week period of exclusivity has been extended by a further two weeks (through to 11:59pm on May 12, 2025). The Domain Transaction remains subject to a number of conditions, including satisfactory completion of due diligence, negotiation and execution of transaction documentation, as well as customary conditions. Accordingly, there is no guarantee that a binding agreement will be reached and therefore no certainty that the Domain Proposal will result in a transaction.
Current report
Stock Repurchase Program. In February 2025, the Board of Directors approved the Stock Repurchase Program that authorizes, but does not obligate, the repurchase of up to $500 million of the Company’s common stock. The Company repurchased 240,000 CoStar Group Shares for an aggregate cost of $18.5 million in the first quarter of 2025. The Company anticipates repurchasing at least $150 million of common shares in total in 2025.
Current report
On April 30, 2025, the Company executed a trading plan with BofA Securities, Inc. (the "Broker") designed to comply with the affirmative defense provided by Rule 10b5-1 and the safe harbor provided by Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The program has no time limit and can be discontinued at any time at the Company’s discretion. Subject to quarterly limits set by the Company, repurchases may be made from time to time at Broker's discretion, and the timing and amount of any such repurchases will be determined based on share price, market conditions, legal requirements, and other relevant factors. There can be no assurance as to the timing or number of shares of any repurchases in the future.
Current report
Net cash used in investing activities for the three months ended March 31, 2025 was $911 million compared to $380 million for the three months ended March 31, 2024, primarily driven by the Matterport Acquisition and the purchase of equity securities, partially offset by proceeds from the sale and settlement of investments.
Current report
•Income taxes, and
Current report
•the risks related to the specific timing, price, and size of repurchases under the Stock Repurchase Program, including that the Stock Repurchase Program may be suspended or discontinued at any time at the Company’s discretion;
Current report
•our inability to increase brand awareness;
Current report
•our inability to complete certain strategic transactions if a proposed transaction is subject to review or approval by regulatory authorities pursuant to applicable laws or regulations;
Current report
•our inability to realize the benefits of the Matterport Acquisition;
Current report
•the significant costs associated with undertaking a large infrastructure project;
Current report
•our inability to obtain and maintain stable data feeds, or disruption of our data feeds;
Current report
•the effects of use of new and evolving technologies, including AI, on our ability to protect our data and intellectual property from misappropriation by third parties;
Current report
•the inability of third-party suppliers upon which Matterport relies to fulfill its needs;
Current report
•the risks related to our equity investments; and
Current report
•the risks related to open source software.
Removed paragraphs (81)
Previous report
We provide real estate and lease management technology solutions, including lease administration, lease accounting and abstraction services, through our CoStar Real Estate Manager service offerings, as well as portfolio and debt analysis, management and reporting capabilities through our CoStar Risk Analytics service offerings. We also provide data and reports on an ad hoc basis to customers in the hospitality industry. We earn revenue on ad hoc transactions as reports or data are delivered to customers. We provide information services internationally, through our Business Immo, Belbex, and Thomas Daily businesses in France, Spain, and Germany, respectively. Information Services' revenues for the nine months ended September 30, 2024 decreased compared to the revenues for the nine months ended September 30, 2023 due to converting legacy STR customers to our new CoStar-based benchmarking product. We expect the Information Services revenues for the year ending December 31, 2024 to decrease compared to the revenues for the year ended December 31, 2023 due to converting legacy STR customers to our new CoStar-based benchmarking product.
Previous report
The Homes.com Acquisition and the OnTheMarket Acquisition have enabled us to expand our offerings to the residential for sale market. Homes.com is a homes-for-sale listings site that combines our proprietary research with listing information to allow homebuyers an informative and collaborative experience finding homes for sale or lease. In February 2024, we began selling Homes.com memberships, which are subscription-based advertising services promoting an agent's profile and listings on our website. Homes.com also provides legacy products and services to residential real estate including subscription-based access to applications that manage residential real estate agent workflow and receives transaction-based revenue for marketing campaigns delivered on third-party platforms. OnTheMarket is a property portal in the U.K., which primarily offers subscriptions-based advertising services to agents. Residential's revenues for the nine months ended September 30, 2024 increased compared to the nine months ended September 30, 2023 due to the OnTheMarket Acquisition and the launch of our new Homes.com product, partially offset by lost revenue due to the discontinuation and reduced sales of certain products and services that were inconsistent with our long-term business strategy. We expect Residential's revenues for the year ending December 31, 2024 to increase compared to the year ended December 31, 2023 due to the OnTheMarket Acquisition and the launch of our new Homes.com product, partially offset by lost revenue due to the discontinuation and reduced sales of certain products and services that were inconsistent with our long-term business strategy.
Previous report
Other Marketplaces
Previous report
•Continuing to develop and invest in our residential marketplaces. For Homes.com, we are creating additional content for neighborhoods, parks, schools, and condos. In February 2024, we launched Homes.com memberships, which promote an agent's profile and listings on our website. We intend to create an expanded, dedicated sales force to supplement the efforts of our sales team already in place. We have launched a brand campaign plan to increase our residential marketing investment to raise brand awareness and drive users to our website.
Previous report
For OnTheMarket, we are integrating OnTheMarket into the Company’s operations, including additional investment in marketing, content creation, and enhancing OnTheMarket’s website to improve performance and facilitate better search engine optimization.
Previous report
•Continuing to enhance our facilities. We are expanding our research and technology center in Richmond, Virginia. We broke ground on the expansion in November 2022 and expect construction to be substantially completed in the first half of 2026. The expansion includes construction of two new buildings spanning 750,000 square feet and will bring our campus footprint to over 1 million square feet when completed. We plan to increase our research, technology, operations, software development, marketing, and sales teams in this location.
Previous report
In February 2024, we closed on the purchase of a building in Arlington, Virginia, and we plan to build out a space for our employees currently in our Washington DC headquarters. The lease on our current Washington, DC headquarters ends in 2025.
Previous report
Impacts of Current Economic Conditions
Previous report
The macroeconomic outlook has been complex and evolving. It is currently unclear how the commercial real estate industry will ultimately be impacted by the current economic conditions. A sustained period of elevated interest rates may reduce demand for all types of real estate. If the demand for office space or other real estate decreases significantly, there could be a downturn in the commercial real estate market that may materially adversely affect many of our customers. A depressed commercial real estate market would have a negative impact on our core customer base, which could impact our customers’ ability to subscribe and pay for our services and reduce demand for our services. Reduced demand and increased cancellations could cause our revenues or our revenue growth rates to decline and reduce our profitability.
Previous report
The financial items that have been excluded from our net income to calculate non-GAAP net income and non-GAAP net income per diluted share are amortization of acquired intangible assets and other related costs, stock-based compensation, acquisition- and integration-related costs, restructuring and related costs, and settlement and impairment costs incurred outside our ordinary course of business. These items are discussed above with respect to the calculation of adjusted EBITDA together with the material limitations associated with using this non-GAAP financial measure as compared to net income. In addition to these exclusions from net income, we subtract an assumed provision for income taxes to calculate non-GAAP net income. In both 2024 and 2023, we assume a 26% tax rate, which approximates our historical long-term statutory corporate tax rate, excluding the impact of discrete items.
Previous report
See Note 13 of the Notes to Condensed Consolidated Financial Statements included in Part I of this Report for the reconciliation of our net income to our EBITDA.
Previous report
•an increase in Multifamily revenues of $37 million, or 16%, due to increases in pricing for existing customers and an increase in the number of properties listed on our network,
Previous report
•an increase in CoStar revenues of $24 million, or 10%, due to an increase the average price per subscriber and an increase in subscribers, as well as due to converting legacy STR customers to our new CoStar-based benchmarking product,
Previous report
•an increase in Residential revenues of $17 million, or 169%, due to the OnTheMarket Acquisition and the launch of the new Homes.com membership subscriptions, partially offset by the discontinuation and reduced sales of certain products and services that were inconsistent with our long-term business strategy,
Previous report
•a decrease in Information Services revenues of $12 million, or 26%, attributable to converting legacy STR customers to our new CoStar-based benchmarking product, partially offset by an increase in revenue from CoStar Real Estate Manager.
Previous report
Gross Profit and Cost of Revenues. Gross profit increased $51 million, or 10%, to $552 million, and the gross profit margin was consistent at 80%. Cost of revenues increased $17 million, or 14%, to $141 million and, as a percentage of revenues, was consistent at 20%. The increase in cost of revenues primarily included:
Previous report
•an increase in personnel costs of $13 million related to increases in salaries and benefits costs for our existing employees and rising headcount to support our residential research efforts and
Previous report
•an increase in marketing expenses of $38 million for advertising our brands,
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•an increase in personnel costs of $18 million related to rising headcount in our sales force, recruiting costs, and commissions expense, and
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•an increase of $6 million in events and travel costs.
Previous report
General and Administrative Expenses. General and administrative expenses increased $11 million, or 12%, to $106 million and, as a percentage of revenues, was consistent at 15%. The increase primarily included:
Previous report
•an increase in professional services of $12 million primarily related to acquisition activities and costs to defend our intellectual property.
Previous report
•an increase in Multifamily revenues of $37 million due to increases in pricing for existing customers and an increase in the number of properties listed on our network,
Previous report
•an increase in CoStar revenues of $17 million due to an increase the average price per subscriber and an increase in subscribers, as well as due to converting legacy STR customers to our new CoStar-based benchmarking product,
Previous report
•an increase in Residential revenues of $7 million due to revenue from the launch of the new Homes.com membership subscriptions partially offset by the discontinuation and reduced sales of certain products and services that were inconsistent with our long-term business strategy,
Previous report
•an increase in LoopNet revenues of $3 million due to an increase in the average price per listing and an increase in the number of paid listings, and
Previous report
•a decrease in Information Services revenues of $7 million attributable to converting legacy STR customers to our new CoStar-based benchmarking product, partially offset by an increase in revenue from CoStar Real Estate Manager.
Previous report
The $13 million, or 57%, increase in International revenues was primarily attributable to the impact of the OnTheMarket Acquisition, as well as an increase in CoStar sales.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Revenues. Revenues increased $212 million, or 12%, to $2.0 billion. The increase in our revenues primarily included:
Previous report
•an increase in Multifamily revenues of $121 million, or 18%, due to an increase in the number of properties listed on our network and increases in pricing for existing customers,
Previous report
•an increase in CoStar revenues of $73 million, or 11%, due to an increase in subscribers and an increase in average price per subscriber, as well as converting legacy STR customers to our new CoStar-based benchmarking product,
Previous report
•an increase in Residential revenues of $36 million, or 100%, due to the OnTheMarket Acquisition and the launch of the new Homes.com membership subscriptions, partially offset by the discontinuation and reduced sales of certain products and services that were inconsistent with our long-term business strategy,
Previous report
•an increase in LoopNet revenues of $14 million, or 7%, due to an increase in the average price per listing and an increase in the number of paid listings, and
Previous report
•a decrease in Information Services revenues of $29 million, or 22%, attributable to converting legacy STR customers to our new CoStar-based benchmarking product, partially offset by an increase in revenue from CoStar Real Estate Manager.
Previous report
•an increase in personnel costs of $39 million related to rising headcount to support our residential research efforts, and increases in salaries and benefits costs for our existing employees,
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•an increase of $17 million for web hosting costs and support costs for our researchers, and
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•an increase of $4 million of payment processing fees.
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Selling and Marketing Expenses (excluding customer base amortization). Selling and marketing expenses increased $313 million, or 42%, to $1.1 billion and, as a percentage of revenues, increased from 41% to 52%. The increase primarily included:
Previous report
•an increase in marketing expenses of $258 million for advertising our brands,
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Reworded paragraphs (58)
Previous wording
All forward-looking statements are based on information available to us on the date of this filing, and we assume no obligation to update such statements, whether as a result of new information, future events or otherwise, except as required by law. The following discussion should be read in conjunction with our 2023 Form 10-K, our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and other filings with the SEC and the condensed consolidated financial statements and related notes included in this Report.
Current wording
All forward-looking statements are based on information available to us on the date of this filing, and we assume no obligation to update such statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The following discussion should be read in conjunction with our 2024 Form 10-K, our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, other filings with the SEC, and the condensed consolidated financial statements and related notes included in this Report.
Previous wording
CoStar Group, founded in 1987, is a leading provider of online real estate marketplaces, information, and analytics in the U.S. and U.K., based on the fact that we own and operate leading online marketplaces for commercial real estate and apartment listings in the U.S., based on the numbers of unique visitors and site visits per month; provide more information, analytics, and marketing services than any of our competitors; offer the most comprehensive commercial real estate database available; and have the largest commercial real estate research department in the industry. We have created and compiled a standardized platform of information, analytics, and online marketplace services where industry professionals and consumers of commercial real estate, including apartments, and the related business communities, can continuously interact and facilitate transactions by efficiently accessing and exchanging accurate and standardized real estate-related information. Our service offerings span all commercial property types, including office, retail, industrial, multifamily, land, mixed-use, and hospitality. We also offer online platforms that manage workflow and marketing for residential real estate agents and brokers and provide portals for homebuyers to view residential property listings.
Current wording
CoStar Group is a leading provider of real estate information and analytics, online marketplaces, and 3D digital twin technology, based on the fact that we own and operate leading online marketplaces for real estate in the U.S. and the U.K., based on the numbers of unique visitors and site visits per month; provide more information, analytics and marketing services than many of our competitors; offer the most comprehensive commercial real estate database available; and have the largest commercial real estate research department in the industry. We have created and compiled a standardized platform of real estate information and analytics and online marketplaces where industry professionals, consumers of commercial real estate, including apartments, and the related business communities, can continuously interact and facilitate transactions by efficiently accessing and exchanging accurate and standardized real estate-related information. Our service offerings span all property types, including office, retail, industrial, multifamily, land, mixed-use, and hospitality. We also offer online platforms that manage workflow and marketing for residential real estate agents and brokers and provide portals for homebuyers to view residential property listings.
Previous wording
Our services are typically distributed to our customers under subscription-based license agreements that typically renew automatically, a majority of which have a term of at least one year. Upon renewal, many of the subscription contract rates may change in accordance with contract provisions or as a result of contract renegotiations. To encourage customers to use our services regularly, we generally charge a fixed monthly amount for our subscription-based services rather than charging fees based on actual platform usage or number of paid clicks. Depending on the type of service, contract rates are generally based on the number of sites, number of users, organization size, the customer’s business focus, the customer's geographic location, the number of properties reported on or analyzed, the number and types of services to which a client subscribes, the number of properties a customer advertises and the prominence and placement of a customer's advertised properties in the search results. Our subscription customers generally pay contract fees on a monthly basis, but in some cases may pay us on a quarterly or annual basis. Our transaction-based services primarily consist of auction fees from our Ten-X online auction platform for commercial real estate, which are generally calculated as a percentage of the final sales price for the commercial real estate property sold and recognized as revenue upon the successful closure of an auction. Other transaction-based services are described by service offering below.
Current wording
Our services are typically distributed to our customers under subscription-based license agreements that typically renew automatically, a majority of which have a term of at least one year. Upon renewal, many of the subscription contract rates may change in accordance with contract provisions or as a result of contract renegotiations. To encourage customers to use our services regularly, we generally charge a fixed monthly amount for our subscription-based services rather than charging fees based on actual platform usage or number of paid clicks. Depending on the type of service, contract rates are generally based on the number of sites, number of users, organization size, the customer’s business focus, the customer's geographic location, the number of properties reported on or analyzed, the number and types of services to which a customer subscribes, the number of properties a customer advertises and the prominence and placement of a customer's advertised properties in the search results. Our subscription customers generally pay contract fees on a monthly basis, but in some cases may pay us on a quarterly or annual basis. Our transaction-based services primarily consists of auction fees from our Ten-X online auction platform for commercial real estate, the sales of Matterport cameras and capture equipment, and providing assistance with the data capture process to create digital twins through Matterport. Other transaction-based services are described by service offering below.
Previous wording
Our portfolio of information and analytics services and online marketplaces is branded and marketed to our customers and marketplace end users under the primary brands of CoStar®, LoopNet®, Apartments.com®, Homes.com®, Ten-X®, BizBuySell®, Land.com®, and OnTheMarket®. Our services are accessible via the internet and through our mobile applications. Our services are primarily derived from a database of building-specific information and offer customers specialized tools for accessing, analyzing, and using our information. Over time, we have enhanced and expanded, and we expect to continue to enhance and expand, our existing information, analytics, and online marketplace services. We have developed and we expect to continue to develop additional services leveraging our database to meet the needs of our existing customers, as well as potential new categories of customers.
Current wording
Our portfolio of information, analytics and online marketplaces is branded and marketed to our customers and marketplace end users under the primary brands of CoStar®, Apartments.com®, LoopNet®, OnTheMarket, Homes.com®, Matterport®, Land.com®, and Ten-X®. Our services are accessible via the internet and through our mobile applications. Our services are primarily derived from a database of building-specific information and offer customers specialized tools for accessing, analyzing, and using our information. Over time, we have enhanced and expanded, and we expect to continue to enhance and expand, our existing information, analytics, and online marketplaces. We have developed and we expect to continue to develop additional services leveraging our centralized database and 3D digital twin technology to meet the needs of our existing customers as well as potential new categories of customers.
Previous wording
Our principal information, analytics, and online marketplace services are described in the following paragraphs by type of services:
Current wording
Our principal services are described in the following paragraphs:
Previous wording
CoStar is our subscription-based integrated platform for commercial real estate intelligence, which includes information about office, industrial, retail, multifamily, hospitality, and student housing properties, properties for sale, comparable sales, tenants, space available for lease, industry professionals and their business relationships, industry news and market status and provides benchmarking for the hospitality industry, lease analytical capabilities, and risk management capabilities. CoStar's revenue growth rate for the nine months ended September 30, 2024 was consistent with the revenue growth rate for the nine months ended September 30, 2023. We expect CoStar's revenue growth rate for the year ending December 31, 2024 to be consistent with the revenue growth rate for the year ended December 31, 2023, due to converting legacy STR customers to our new CoStar-based benchmarking product offsetting lower inflation-based price adjustments.
Current wording
CoStar is our subscription-based integrated platform for commercial real estate intelligence, which includes information about commercial real estate properties, properties for sale, comparable sales, tenants, space available for lease, industry professionals and their business relationships, industry news and market status and provides benchmarking for the hospitality industry, lease analytical capabilities, and risk management capabilities for lenders. CoStar's revenue growth rate for the three months ended March 31, 2025 decelerated compared to the revenue growth rate for the three months ended March 31, 2024, due to a lack of benefit from converting legacy STR customers to our new CoStar-based benchmarking product realized in 2024. We expect CoStar's revenue growth rate for the year ending December 31, 2025 to decelerate compared to the revenue growth rate for the year ended December 31, 2024, primarily due to a lack of benefit from converting legacy STR customers to our new CoStar-based benchmarking product realized in 2024.
Previous wording
Apartments.com is the flagship brand of our apartment marketing network of subscription-based advertising services and provides property management companies and landlords with a comprehensive advertising destination for their available rental units and offers renters a platform for searching for available rentals. This network also earns transaction-based revenue primarily from providing online tenant applications, including background and credit checks, and rental payment processing. Multifamily's revenue growth rate for the nine months ended September 30, 2024 moderated compared to the revenue growth rate for the nine months ended September 30, 2023 due to lower inflation-based price adjustments. We expect the Multifamily revenue growth rate for the year ending December 31, 2024 to moderate compared to the revenue growth rate for the year ended December 31, 2023 due to lower inflation-based price adjustments.
Current wording
Apartments.com is the flagship brand of our apartment marketing network of subscription-based advertising services and provides property management companies and landlords with a comprehensive advertising destination for their available rental units. In addition, it offers renters a platform for searching for available rentals and earns transaction-based revenue primarily from providing online tenant applications, including background and credit checks, and rental payment processing. Multifamily's revenue growth rate for the three months ended March 31, 2025 moderated compared to the revenue growth rate for the three months ended March 31, 2024 primarily due to the impact in 2025 of pivoting the Apartments.com sales force to support the Homes.com product launch in 2024. We expect the Multifamily revenue growth rate for the year ending December 31, 2025 to moderate compared to the revenue growth rate for the year ended December 31, 2024, due to the impact in 2025 of pivoting the Apartments.com sales force to support the Homes.com product launch in 2024.
Previous wording
Our LoopNet network of commercial real estate websites offers subscription-based, online marketplace services that enable commercial property owners, landlords and real estate agents working on their behalf to advertise properties for sale or for lease and to submit detailed information about property listings. Commercial real estate agents, buyers, and tenants use the LoopNet network of online marketplace services to search for available property listings that meet their criteria. LoopNet's revenue growth rate for the nine months ended September 30, 2024 decelerated compared to the revenue growth rate for the nine months ended September 30, 2023 due to lower inflation-based price increases. We expect LoopNet's revenue growth rate for the year ended December 31, 2024 to decelerate compared to the revenue growth rate for the year ended December 31, 2023 due to lower inflation-based price increases.
Current wording
Our LoopNet Network of commercial real estate websites offers subscription-based, online marketplace services that enable commercial property owners, landlords, and real estate agents working on their behalf to advertise properties for sale or for lease. Commercial real estate agents, buyers, and tenants use the LoopNet Network of online marketplace services to search for available property listings that meet their criteria. LoopNet's revenue growth rate for the three months ended March 31, 2025 decelerated compared to the revenue growth rate for the three months ended March 31, 2024, primarily due to lower inflation-based price increases. We expect LoopNet's revenue growth rate for the year ended December 31, 2025 to accelerate compared to the revenue growth rate for the year ended December 31, 2024 due to an increase in the average revenue per listing, as well as an increase in the number of listings on our sites.
Previous wording
Our other marketplaces include Ten-X, an online auction platform for commercial real estate, our BizBuySell network of sites, and our Land.com Network. The BizBuySell network provides online marketplaces for businesses and franchises for sale, and our Land.com Network provides online marketplaces for rural lands for sale. Other Marketplaces' revenues for the nine months ended September 30, 2024 were consistent with the nine months ended September 30, 2023. We expect other marketplaces revenues for the year ending December 31, 2024 to be consistent with the year ended December 31, 2023.
Current wording
Our other revenues include revenues from the Matterport Acquisition, our Land.com Network, BizBuySell Network, and Ten-X, an online auction platform for commercial real estate. Matterport primarily provides hosting services for its 3D digital twins on a subscription basis. Matterport also provides capture services of spatial data and other add-on services to existing subscription customers and sells 3D capture cameras and third-party capture devices to customers. The Land.com Network provides online marketplaces for rural lands for sale. BizBuySell Network provides online marketplaces for businesses and franchises for sale. Other revenues for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024 primarily due to the Matterport Acquisition. We expect other revenues for the year ending December 31, 2025 to increase compared to the year ended December 31, 2024 primarily due to the Matterport Acquisition.
Previous wording
For the three months ended September 30, 2024 and 2023, our annualized net new bookings of subscription-based services on all contracts were$44 million and $65 million, respectively. Net new bookings is calculated based on the annualized amount of change in our sales bookings resulting from new subscription-based contracts, changes to existing subscription-based contracts, and cancellations of subscription-based contracts for the period reported. Net new bookings is calculated on all subscription-based contracts without regard to contract term. Net new bookings is considered an operating metric that is an indicator of future subscription revenue growth and is also used as a metric of sales force productivity by us and investors. However, information regarding net new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. Revenues from our subscription-based contracts were approximately 96% and 95% of total revenues for the three months ended September 30, 2024 and 2023, respectively. The increase in the percentage of revenue from our subscription-based contracts was due to increased sales in our subscription products.
Current wording
For the three months ended March 31, 2025 and 2024, our annualized net new bookings of subscription-based services on all contracts were$56 million and $86 million, respectively. Net new bookings is calculated based on the annualized amount of change in our sales bookings resulting from new subscription-based contracts, changes to existing subscription-based contracts, and cancellations of subscription-based contracts for the period reported. Net new bookings is calculated on all subscription-based contracts without regard to contract term. Net new bookings is considered an operating metric that is an indicator of future subscription revenue growth and is also used as a metric of sales force productivity by us and investors. However, information regarding net new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. Revenues from our subscription-based contracts were approximately 96% of total revenues for both the three months ended March 31, 2025 and 2024.
Previous wording
For the trailing 12 months ended September 30, 2024 and 2023, our contract renewal rates for existing company-wide subscription-based services for contracts with a term of at least one year were approximately 89% and 90%, respectively, and, therefore, our cancellation rates for those services for the same periods were approximately 11% and 10%, respectively. Contract renewal rates are calculated on all subscription-based contracts with a term of at least one year. Our contract renewal rate is a quantitative measurement that is typically closely correlated with our revenue results. As a result, we believe that the rate may be a reliable indicator of short-term and long-term performance absent extraordinary circumstances. Our trailing 12-month contract renewal rate may decline as a result of negative economic conditions, consolidations among our customers, reductions in customer spending or decreases in our customer base. Revenues from our subscription-based contracts with a term of at least one year were approximately 81% of total revenues for each of the trailing 12 months ended September 30, 2024 and 2023.
Current wording
For both the trailing 12 months ended March 31, 2025 and 2024, our contract renewal rates for existing company-wide CoStar Group subscription-based services for contracts with a term of at least one year were approximately 89%, and, therefore, our cancellation rates for those services for the same periods were approximately 11%. Contract renewal rates are calculated on all subscription-based contracts with a term of at least one year. Our contract renewal rate is a quantitative measurement that is typically closely correlated with our revenue results. As a result, we believe that the rate may be a reliable indicator of short-term and long-term performance absent extraordinary circumstances. Our trailing 12-month contract renewal rate may decline as a result of negative economic conditions, consolidations among our customers, reductions in customer spending or decreases in our customer base. Revenues from our subscription-based contracts with a term of at least one year were approximately 80% and 81% of total revenues for the trailing 12 months ended March 31, 2025 and 2024, respectively.
Previous wording
We expect our investment in these priorities will increase our research, selling and marketing, and facilities expenses, including potential impairments of assets associated with the acquired building, and increase the cash spent on capital expenditures. Each of the increased expenses will reduce our net income, and the increase in these expenses and the capital expenditures are expected to reduce our cash on hand for the year ending December 31, 2024 compared to the year ended December 31, 2023. We intend to continue to assess the need for additional investments in our business to develop and distribute new services and functionality within our current platform or expand the reach of, or otherwise improve, our current service offerings. Any future product development or expansion of services, combination and coordination of services or elimination of services or corporate expansion, development or restructuring efforts could reduce our profitability and increase our capital expenditures. Any new investments, changes to our service offerings or other unforeseen events could cause us to experience reduced revenues or generate losses and negative cash flow from operations in the future. Any development efforts must comply with our credit facility, which contains restrictive covenants that restrict our operations and use of our cash flow and may prevent us from taking certain actions that we believe could increase our profitability or otherwise enhance our business.
Current wording
We expect our investment in the sales force will increase our selling and marketing expenses for the year ending December 31, 2025 compared to the year ended December 31, 2024. We intend to continue to assess the need for additional investments in our business in order to develop and distribute new services and functionality within our current platform or expand the reach of, or otherwise improve, our current service offerings. Any future product development or expansion of services, combination and coordination of services, or elimination of services or corporate expansion, development, or restructuring efforts could reduce our profitability and increase our capital expenditures. Any new investments, changes to our service offerings, or other unforeseen events could cause us to experience reduced revenues or generate losses and negative cash flow from operations in the future. Any development efforts must comply with our credit facility, which contains restrictive covenants that restrict our operations and use of our cash flow and may prevent us from taking certain actions that we believe could increase our profitability or otherwise enhance our business.
Previous wording
We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. We also disclose and discuss certain non-GAAP financial measures in our public releases, investor conference calls and filings with the SEC. The non-GAAP financial measures that we may disclose include EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share. EBITDA is our net income before interest income or expense, net, other income or expense, net, loss on debt extinguishment, income taxes, depreciation and amortization. We typically disclose EBITDA on a consolidated and an operating segment basis in our earnings releases, investor conference calls, and filings with the SEC. Adjusted EBITDA is different from EBITDA because we further adjust EBITDA for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, and settlements and impairments incurred outside our ordinary course of business. Adjusted EBITDA margin represents adjusted EBITDA divided by revenues for the period. Non-GAAP net income is determined by adjusting our net income for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside our 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. 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.
Current wording
We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. We also disclose and discuss certain non-GAAP financial measures in our public releases, investor conference calls, and filings with the SEC. The non-GAAP financial measures that we may disclose include EBITDA, adjusted EBITDA, and adjusted EBITDA margin. EBITDA is our net (loss) income before interest income or expense, net, other expense or income, net, loss on debt extinguishment, income taxes, depreciation, and amortization. We typically disclose EBITDA on a consolidated and an operating segment basis in our earnings releases, investor conference calls, and filings with the SEC. Adjusted EBITDA is different from EBITDA because we further adjust EBITDA for stock-based compensation expense; acquisition- and integration-related costs; restructuring and related costs, including certain advisory fees; and settlements and impairments incurred outside our ordinary course of business. Adjusted EBITDA margin represents adjusted EBITDA divided by revenues for the period.
Previous wording
We may disclose adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share on a consolidated basis in our earnings releases, investor conference calls, and filings with the SEC. The non-GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies. Also, in the future, we may disclose different non-GAAP financial measures in order to help our investors meaningfully evaluate and compare our results of operations to our previously reported results of operations or to those of other companies in our industry.
Current wording
We may disclose adjusted EBITDA and adjusted EBITDA margin on a consolidated basis in our earnings releases, investor conference calls, and filings with the SEC. The non-GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies. Also, in the future, we may disclose different non-GAAP financial measures in order to help our investors meaningfully evaluate and compare our results of operations to our previously reported results of operations or to those of other companies in our industry.
Previous wording
We view EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share as operating performance measures. We believe that the most directly comparable GAAP financial measure to EBITDA, adjusted EBITDA, and non-GAAP net income is net income. We believe the most directly comparable GAAP financial measures to non-GAAP net income per diluted share and adjusted EBITDA margin are net income per diluted share and net income divided by revenues, respectively. In calculating EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share, we exclude from net income the financial items that we believe should be separately identified to provide additional analysis of the financial components of the day-to-day operation of our business. We have outlined below the type and scope of these exclusions and the material limitations on the use of these non-GAAP financial measures as a result of these exclusions. EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share are not measurements of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net income or as an indicator of any other measure of performance derived in accordance with GAAP. Investors and potential investors in our securities should not rely on EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share as a substitute for any GAAP financial measure, including net income and net income per diluted share. In addition, we urge investors and potential investors in our securities to carefully review the GAAP financial information included as part of our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q that are filed with the SEC, as well as our quarterly earnings releases, and compare the GAAP financial information with our EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share.
Current wording
We view EBITDA, adjusted EBITDA, and adjusted EBITDA margin as operating performance measures. We believe that the most directly comparable GAAP financial measure to EBITDA and adjusted EBITDA is net (loss) income. We believe the most directly comparable GAAP financial measure to adjusted EBITDA margin is net (loss) income divided by revenue. In calculating EBITDA, adjusted EBITDA, and adjusted EBITDA margin, we exclude from net (loss) income the financial items that we believe should be separately identified to provide additional analysis of the financial components of the day-to-day operation of our business. We have outlined below the type and scope of these exclusions and the material limitations on the use of these non-GAAP financial measures as a result of these exclusions. EBITDA, adjusted EBITDA, and adjusted EBITDA margin are not measurements of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net (loss) income, or as an indicator of any other measure of performance derived in accordance with GAAP. Investors and potential investors in our securities should not rely on EBITDA, adjusted EBITDA, and adjusted EBITDA margin as a substitute for any GAAP financial measure. In addition, we urge investors and potential investors in our securities to carefully review the GAAP financial information included as part of our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q that are filed with the SEC, as well as our quarterly earnings releases, and compare the GAAP financial information with our EBITDA, adjusted EBITDA, and adjusted EBITDA margin.
Previous wording
EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share may be used by management internally to measure our operating and management performance and may be used by investors as supplemental financial measures to evaluate the performance of our business. We believe that these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide additional information to investors that is useful to understand the factors and trends affecting our business without the impact of certain acquisition-related items. We have spent more than 30 years building our database of commercial real estate information and expanding our markets and services partially through acquisitions of complementary businesses. Due to these acquisitions, our net income has included significant charges for amortization of acquired intangible assets, depreciation and other amortization, acquisition- and integration-related costs, restructuring costs, and loss on debt extinguishment. Adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per diluted share exclude these charges and provide meaningful information about the operating performance of our business, apart from charges for amortization of acquired intangible assets, depreciation and other amortization, acquisition- and integration-related costs, restructuring costs, and settlement and impairment costs incurred outside our ordinary course of business. We believe the disclosure of non-GAAP measures can help investors meaningfully evaluate and compare our performance from quarter to quarter and from year to year without the impact of these items. We also believe the non-GAAP measures we disclose are measures of our ongoing operating performance because the isolation of non-cash charges, such as amortization and depreciation, and other items, such as interest income or expense, net, other income or expense, net, income taxes, stock-based compensation expenses, acquisition- and integration-related costs, restructuring costs, loss on debt extinguishment, and settlement and impairment costs incurred outside our ordinary course of business, provides additional information about our cost structure, and, over time, helps track our operating progress. In addition, investors, securities analysts, and others have regularly relied on EBITDA and may rely on adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, or non-GAAP net income per diluted share to provide a financial measure by which to compare our operating performance against that of other companies in our industry.
Current wording
EBITDA, adjusted EBITDA, and adjusted EBITDA margin may be used by management to internally measure our operating and management performance and may be used by investors as supplemental financial measures to evaluate the performance of our business. We believe that these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide additional information to investors that is useful to understand the factors and trends affecting our business without the impact of certain acquisition-related items. We have spent more than 30 years building our database of commercial real estate information and expanding our markets and services partially through acquisitions of complementary businesses. Due to these acquisitions, our net (loss) income has included significant charges for amortization of acquired intangible assets; depreciation and other amortization; acquisition- and integration-related costs; restructuring and related costs, including certain advisory fees; and loss on debt extinguishment. Adjusted EBITDA and adjusted EBITDA margin exclude these charges and provide meaningful information about the operating performance of our business, apart from charges for amortization of acquired intangible assets; depreciation and other amortization; acquisition- and integration-related costs; restructuring and related costs, including certain advisory fees; settlement and impairment costs incurred outside our ordinary course of business. We believe the disclosure of non-GAAP measures can help investors meaningfully evaluate and compare our performance from quarter to quarter and from year to year without the impact of these items. We also believe the non-GAAP measures we disclose are measures of our ongoing operating performance because the isolation of non-cash charges, such as amortization and depreciation, and other items, such as interest income or expense, net; other expense or income, net; income taxes; stock-based compensation expenses; acquisition- and integration-related costs; restructuring and related costs, including certain advisory fees; loss on debt extinguishment; and settlement and impairment costs incurred outside our ordinary course of business, provides additional information about our cost structure, and, over time, helps track our operating progress. In addition, investors, securities analysts, and others have regularly relied on EBITDA and may rely on adjusted EBITDA and adjusted EBITDA margin to provide a financial measure by which to compare our operating performance against that of other companies in our industry.
Previous wording
Set forth below are descriptions of financial items that have been excluded from net income to calculate EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to net income:
Current wording
Set forth below are descriptions of financial items that have been excluded from net (loss) income to calculate EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to net (loss) income:
Previous wording
•The amount of interest income or expense, net and other income or expense, net we generate and incur may be useful for investors to consider and may result in current cash inflows and outflows. However, we do not consider the amount of interest income or expense, net and other income or expense, net, to be a representative component of the day-to-day operating performance of our business.
Current wording
•The amount of interest income or expense, net and other expense or income, net we generate and incur may be useful for investors to consider and may result in current cash inflows and outflows. However, we do not consider the amount of interest income or expense, net and other expense or income, net to be a representative component of the day-to-day operating performance of our business.
Previous wording
Set forth below are descriptions of additional financial items that have been excluded from EBITDA to calculate adjusted EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to net income:
Current wording
Set forth below are descriptions of additional financial items that have been excluded from EBITDA to calculate adjusted EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to net (loss) income:
Previous wording
•The amount of settlement and impairment costs incurred outside of our ordinary course of business may be useful for investors to consider because they generally represent gains or losses from the settlement of litigation matters, charges related to terminations of contracts or impairments of acquired intangible assets. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
Current wording
•The amount of settlement and impairment costs incurred outside of our ordinary course of business may be useful for investors to consider because they generally represent gains or losses from the settlement of litigation matters, charges related to terminations of contracts or impairments of acquired intangible assets or other long lived assets. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
Previous wording
•The amount of restructuring costs incurred may be useful for investors to consider because they generally represent costs incurred in connection with a change in a contract or a change in the makeup of our properties or personnel. Because we do not carry out restructuring activities on a predictable cycle, we do not consider the amount of restructuring-related costs to be a representative component of the day-to-day operating performance of our business.
Current wording
•The amount of restructuring and related costs, including certain advisory costs, incurred may be useful for investors to consider because they generally represent costs incurred in connection with changes to the structure of our operations, governance, offices and related properties, and suppliers or employees used to deliver services and include costs to terminate contracts, advisory fees and other professional services, and severance. Because we do not carry out restructuring activities on a predictable cycle, we do not consider the amount of restructuring-related costs to be a representative component of the day-to-day operating performance of our business.
Previous wording
We compensate for the above-described limitations of using non-GAAP measures by using a non-GAAP measure only to supplement our GAAP results and to provide additional information that is useful to investors to understand the factors and trends affecting our business.
Current wording
Management compensates for the above-described limitations of using non-GAAP measures by using a non-GAAP measure only to supplement our GAAP results and to provide additional information that is useful to investors to understand the factors and trends affecting our business.
Previous wording
The following table compares our selected consolidated results of operations for the three months ended September 30, 2024 and 2023 (in millions, except percentages):
Current wording
The following table compares our selected condensed consolidated results of operations for the three months ended March 31, 2025 and 2024 (in millions, except percentages):
Previous wording
Revenues. Revenues increased $68 million, or 11%, to $693 million. The increase in our revenues primarily included:
Current wording
Revenues. Revenues increased $76 million, or 12%, to $732 million. The increase in our revenues included:
Previous wording
•an increase in LoopNet revenues of $3 million, or 5%, due to an increase in the average price per listing and an increase in the number of paid listings, and
Current wording
•an increase in LoopNet revenues of $4 million, or 5%, due to an increase in the average price per listing, as well as the number of listings.
Previous wording
Gross Profit. Gross profit increased $150 million, or 10%, to $1.6 billion, and the gross profit percentage decreased from 80% to 79%. Cost of revenues increased $62 million, or 18%, to $418 million and, as a percentage of revenues, increased from 20% to 21%. The increase in cost of revenues primarily included:
Current wording
Gross Profit and Cost of Revenues. Gross profit increased $64 million, or 12%, to $579 million, and the gross profit margin increased from 78% to 79%. The increase in gross profit was due to higher revenues, partially offset by an increase in cost of revenues. Cost of revenues increased $12 million, or 9%, to $153 million and, as a percentage of revenues, decreased from 22% to 21%. The increase in cost of revenues primarily included:
Previous wording
•an increase of $3 million for web hosting costs.
Current wording
•an increase of $3 million for web hosting costs, and
Previous wording
•an increase of $2 million in software and equipment costs.
Current wording
•an increase of $2 million in costs of goods sold related to sales of Matterport capture equipment and services.
Previous wording
Selling and Marketing Expenses (excluding customer base amortization). Selling and marketing expenses increased $64 million, or 24%, to $331 million and, as a percentage of revenues, increased from 43% to 48%. The increase primarily included:
Current wording
Selling and Marketing Expenses (excluding customer base amortization). Selling and marketing expenses (excluding customer base amortization) increased $3 million, or 1%, to $369 million and, as a percentage of revenues, decreased from 56% to 50%. The increase primarily included:
Previous wording
Software Development Expenses. Software development expenses increased $13 million, or 19%, to $81 million and, as a percentage of revenues, increased from 11% to 12%. The increase primarily included:
Current wording
Software Development Expenses. Software development expenses increased $12 million, or 15%, to $95 million and, as a percentage of revenues, was consistent at 13%. The increase primarily included:
Previous wording
•an increase in personnel costs of $10 million related to rising headcount and increases in salaries, stock-based compensation, and benefits costs for our existing employees and
Current wording
•an increase in personnel costs of $10 million related to increases in salaries, stock-based compensation, and benefit costs as a result of the Matterport Acquisition, as well as costs for our existing employees.
Previous wording
General and Administrative Expenses. General and administrative expenses increased $40 million, or 15%, to $314 million and, as a percentage of revenues, increased from 15% to 16%. The increase primarily included:
Current wording
General and Administrative Expenses. General and administrative expenses increased $43 million, or 43%, to $141 million and, as a percentage of revenues, increased from 15% to 19%. The increase primarily included:
Previous wording
•an increase in professional services of $23 million, primarily related to acquisition activities and costs to defend our intellectual property,
Current wording
•an increase in professional services of $23 million, primarily related to acquisition activities,
Previous wording
•an increase of $7 million in software and equipment costs.
Current wording
•an increase of $7 million in costs of intellectual property disputes.
Previous wording
Customer Base Amortization Expense. Customer base amortization expense was consistent.
Current wording
Customer Base Amortization Expense. Customer base amortization expense increased $6 million, or 56%, to $17 million, and, as a percentage of revenues, was consistent at 2%. The increase was due to the Matterport Acquisition.
Previous wording
Interest Income, Net. Interest income, net decreased $3 million, or 5%, to $56 million. The decrease was primarily due to a decrease in our cash and cash equivalent balances.
Current wording
Interest Income, Net. Interest income, net decreased $18 million, or 31%, to $39 million. The decrease was primarily due to a decrease in our cash and cash equivalents.
Previous wording
Other (Expense) Income, Net. Other (expense) income, net was insignificant for the three months ended September 30, 2024 and 2023.
Current wording
Other Expense, Net. Other expense, net, was insignificant for both the three months ended March 31, 2025 and 2024.
Previous wording
Income Tax Expense. Income tax expense decreased $5 million, or 17%, to $25 million and the effective tax rate was 32% of income before income taxes compared to 25% of income before income taxes for the three months ended September 30, 2023. The decrease in income tax expense was primarily attributable to lower U.S. income and larger U.K. losses with no tax benefit.
Current wording
Income Tax Expense. Income tax expense increased $3 million, or 69%, to $8 million, and the effective tax rate was (120.9)% of loss before income taxes compared to 42% of income before incomes taxes for the three months ended March 31, 2024. The increase in income tax expense was primarily attributable to a discrete tax expense for transaction costs.
Previous wording
We manage our business geographically in two operating segments, with our primary areas of measurement and decision-making being North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific, and Latin America. Management relies on an internal management reporting process that provides revenue and operating segment EBITDA. Management believes that operating segment EBITDA is an appropriate measure for evaluating the operational performance of our operating segments. EBITDA is used by management internally to measure our operating and management performance and to evaluate the performance of our business. However, this measure should be considered in addition to, not as a substitute for or superior to, income from operations or other measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for further information regarding our segment operating results.
Current wording
We manage our business geographically in two operating segments, with our primary areas of measurement and decision-making being North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific, and Latin America. Management relies on an internal management reporting process that provides revenue and operating segment EBITDA. Management believes that operating segment EBITDA is an appropriate measure for evaluating the operational performance of our operating segments. EBITDA is used by management internally to measure our operating and management performance and to evaluate the performance of our business. However, this measure should be considered in addition to, not as a substitute for or superior to, (loss) income from operations or other measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for further information regarding our segment operating results.
Previous wording
Segment Revenues. North America revenues increased $55 million, or 9%, to $658 million and included:
Current wording
Segment Revenues. North America revenues increased $74 million, or 12%, to $697 million and included:
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Previous report — wording carried elsewhere
The following table provides a comparison of our selected consolidated results of operations for the nine months ended September 30, 2024 and 2023 (in millions, except percentages):
Previous report — wording carried elsewhere
•an increase of $2 million in occupancy costs.
Previous report — wording carried elsewhere
Customer Base Amortization Expense. Customer base amortization expense was consistent.
Previous report — wording carried elsewhere
We manage our business geographically in two operating segments, with our primary areas of measurement and decision-making being North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific, and Latin America. Management relies on an internal management reporting process that provides revenues and operating segment EBITDA. Management believes that operating segment EBITDA is an appropriate measure for evaluating the operational performance of our operating segments. EBITDA is used by management to internally measure our operating and management performance and to evaluate the performance of our business. However, this measure should be considered in addition to, not as a substitute for or superior to, (loss) income from operations or other measures of financial performance prepared in accordance with GAAP.
Previous report — wording carried elsewhere
Cautionary Statement Concerning Forward-Looking Statements