COSTAR GROUP, INC.
For the period ended Jun 30, 2026. Filed Jul 29, 2026.
View on SEC.govAbout this filing
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.
Jun 30, 2026 · Filed Jul 29, 2026
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 2026-03-31; filed 2026-04-29.
0001057352-26-000035
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-29.
0001057352-26-000066
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 193 previous paragraphs and 300 current paragraphs.
97 unchanged; 69 reworded; 121 added; 24 removed; 3 previous and 13 current paragraphs rearranged.
Tables are not compared: 2 previous and 4 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 (121)
Current report
Revenue. Revenue increased by $144 million, or 18%, to $925 million, driven by the following:
Current report
Commercial Real Estate revenue increased by $35 million, or 8%, to $481 million due to:
Current report
•an increase in LoopNet revenue of $11 million, or 14%, due to an increase in the number of listings, and the Domain Acquisition completed in August 2025, partially offset by
Current report
•a decrease in Other Commercial Real Estate revenue of $3 million, or 5%, primarily due to fewer properties transacted on Ten-X.
Current report
Residential Real Estate revenue increased by $109 million, or 33%, to $444 million, primarily due to:
Current report
Gross Profit and Cost of Revenue. Gross profit increased by $115 million, or 19%, to $728 million, and the gross profit margin increased from 78% to 79%. The increase in gross profit was due to higher revenue, partially offset by an increase in the cost of revenue. Cost of revenue increased by $29 million, or 17%, to $197 million and, as a percentage of revenue, decreased from 22% to 21%. The increase in cost of revenue included:
Current report
•an increase in supplies and office services expense of $4 million, primarily due to Domain operations and field research operations for existing brands,
Current report
•an increase of $3 million due to higher Domain occupancy costs and bank and merchant fees, partially offset by
Current report
•a $2 million gain on the sale of the research plane and a $1 million decrease in professional service expense.
Current report
Selling and Marketing (Excluding Customer Base Amortization) Expenses. Selling and marketing (excluding customer base amortization) expenses were consistent at $395 million and, as a percentage of revenue, decreased from 51% to 43%. The change included:
Current report
•an increase of $26 million related to the Domain Acquisition, including $13 million of personnel and related costs, $11 million of marketing expenses and $2 million of indirect costs, offset by the following decreases in the remaining brands:
Current report
•a decrease of $12 million in marketing expense for advertising of our brands,
Current report
•a decrease of $10 million in personnel and related costs, primarily due to lower sales commissions and lower stock-based compensation expense from accelerated compensation recognized for certain Matterport employees in the prior-year period, and
Current report
•a decrease of $4 million in professional services and recruiting costs.
Current report
Software Development Expenses. Software development expenses increased by $11 million, or 11%, to $107 million and, as a percentage of revenue, were consistent at 12%. The increase included:
Current report
•an increase in personnel costs, primarily due to additional headcount from the Domain Acquisition,
Current report
•an increase in software and equipment costs of $3 million, primarily due to increased spending on AI software, and
Current report
•an increase in occupancy costs of $1 million, primarily due to the Domain Acquisition.
Current report
•a gain from recoveries related to the Brown Judgment received during the quarter,
Current report
•a decrease of $8 million in personnel costs, primarily due to accelerated stock-based compensation expense recognized in the prior-year period for certain executives, partially offset by
Current report
Interest Income (Expense), Net. Interest income (expense), net changed by $35 million, or 106%, to a net expense of $2 million. The change was primarily due to a decrease in our cash and cash equivalents, as well as $9 million of interest expense recognized during the current quarter related to the Brown Judgment.
Current report
Other Income, Net. Other income, net decreased by $16 million. The decrease included:
Current report
•an unrealized gain on the deal-contingent forward U.S. dollar to Australian dollar contracts entered into in conjunction with the Domain Acquisition in the prior-year period, and
Current report
•an unrealized gain of $9 million recognized in the prior-year period related to the equity securities of Domain, partially offset by
Current report
•a decrease of $5 million in depreciation and amortization expense from leasing activities driven by a change in the useful life of improvements related to tenants.
Current report
Revenue. Revenue increased by $103 million, or 15%, to $781 million, driven by the following:
Current report
Commercial Real Estate revenue increased by $72 million, or 19%, to $446 million due to:
Current report
•an increase in Other Commercial Real Estate revenue of $42 million, or 233%, primarily due to the Matterport Acquisition.
Current report
Residential Real Estate revenue increased by $31 million, or 10%, to $335 million, primarily due to:
Current report
•an increase in the number of properties advertised on our network, partially offset by
Current report
Gross Profit and Cost of Revenue. Gross profit increased by $71 million, or 13%, to $613 million, and the gross profit margin decreased from 80% to 78%. The increase in gross profit was due to higher revenue, partially offset by an increase in cost of revenue. Cost of revenue increased by $32 million, or 24%, to $168 million and, as a percentage of revenue, increased from 20% to 22%. The increase in cost of revenue primarily included:
Current report
•an increase in amortization expense for the acquired technology and trade names from the Matterport Acquisition,
Current report
•an increase in personnel costs of $8 million related to additional headcount from the Matterport Acquisition, and
Current report
Selling and Marketing (Excluding Customer Base Amortization) Expenses. Selling and marketing (excluding customer base amortization) expenses increased by $37 million, or 10%, to $395 million and, as a percentage of revenue, decreased from 53% to 51%. The increase primarily included:
Current report
•an increase in personnel costs related to sales hiring and the sales force from the Matterport Acquisition,
Current report
•an increase of $2 million in third-party sales commissions for Matterport products, partially offset by
Current report
•a decrease in marketing expenses of $13 million.
Current report
Software Development Expenses. Software development expenses increased by $16 million, or 20%, to $96 million and, as a percentage of revenue, were consistent at 12%. The increase primarily included:
Current report
•an increase in occupancy and equipment costs of $2 million.
Current report
General and Administrative Expenses. General and administrative expenses increased by $12 million, or 11%, to $122 million and, as a percentage of revenue, were consistent at 16%. The increase primarily included:
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Removed paragraphs (24)
Previous report
•The amount of loss on our debt extinguishment may be useful for investors to consider because it generally represents losses from the early extinguishment of debt. However, we do not consider the amount of the loss on debt extinguishment to be a representative component of the day-to-day operating performance of our business.
Previous report
Revenue. Revenue increased by $165 million, or 23%, to $897 million, driven by the following:
Previous report
Commercial Real Estate revenue increased by $63 million, or 15%, to $472 million due to:
Previous report
•an increase in Other Commercial Real Estate revenue of $25 million, or 81%, primarily due to the Matterport Acquisition completed in February 2025.
Previous report
•an increase in personnel costs and related overhead, reflecting sales hiring and the addition of sales personnel from the Matterport and Domain acquisitions,
Previous report
Software Development Expenses. Software development expenses increased by $19 million, or 20%, to $114 million and, as a percentage of revenue, were consistent at 13%. The increase included:
Previous report
•an increase in personnel costs, primarily driven by additional headcount from the Matterport and Domain acquisitions and
Previous report
•a decrease of $20 million from Matterport-related acquisition fees incurred in February 2025 and
Previous report
Interest Income, Net. Interest income, net decreased by $28 million, or 74%, to $10 million. The decrease was primarily due to a decrease in our cash and cash equivalents.
Previous report
Revenue. Revenue increased by $76 million, or 12%, to $732 million, driven by the following:
Previous report
•an increase in Other Commercial Real Estate revenue of $14 million, or 82%, primarily attributable to the Matterport Acquisition.
Previous report
Residential Real Estate revenue increased by $36 million, or 13% to $323 million primarily due to:
Previous report
•an increase in the number of agents and properties advertised on our network, partially offset by
Previous report
•an increase in personnel costs related to sales hiring, partially offset by
Previous report
•a decrease in marketing expenses of $17 million.
Previous report
General and Administrative Expenses. General and administrative expenses increased by $42 million, or 42%, to $141 million and, as a percentage of revenue, increased from 15% to 19%. The increase included:
Previous report
•an increase in professional services of $23 million, primarily due to acquisition activities,
Previous report
•an increase in personnel costs of $8 million, primarily due to increases in salaries and stock-based compensation as a result of the Matterport Acquisition, and
Previous report
Customer Base Amortization Expense. Customer base amortization expense increased by $6 million, or 55%, to $17 million, and, as a percentage of revenue, was consistent at 2%. The increase was primarily due to the Matterport Acquisition.
Previous report
Interest Income, Net. Interest income, net decreased by $18 million, or 32%, to $38 million. The decrease was primarily due to a decrease in our cash and cash equivalents.
Previous report
Residential Real Estate Adjusted EBITDA improved by $56 million to a loss of $29 million. The improvement was due to the increase in revenue discussed above, partially offset by:
Previous report
•a $20 million increase in personnel costs, primarily due to the Domain Acquisition completed in August 2025,
Previous report
•a $9 million increase in marketing expenses, primarily due to the Domain Acquisition.
Previous report
Segment Adjusted EBITDA. Commercial Real Estate Adjusted EBITDA increased $8 million to $151 million. The increase was due to the increase in revenue discussed above, partially offset by:
Reworded paragraphs (69)
Previous wording
CoStar Group is a leading provider of online real estate marketplaces, information, analytics, and 3D digital twin technology in the property markets, based on the numbers of unique visitors and site visits per month; providing more information, analytics, and marketing services than many of our competitors; offering the most comprehensive commercial real estate database available; and having 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 and residential 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, residential, land, mixed-use, and hospitality.
Current wording
CoStar Group is a leading global provider of online real estate marketplaces, information, analytics, and 3D digital twin technology in the property markets, based on the numbers of unique visitors and site visits per month; providing more information, analytics, and marketing services than many of our competitors; offering the most comprehensive commercial real estate database available; and having the largest commercial real estate research department in the industry. We have created and compiled a standardized platform of real estate information, analytics, and online marketplaces where industry professionals, consumers of commercial and residential 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, residential, land, mixed-use, and hospitality.
Previous wording
Our services are primarily derived from a database of building-specific and marketplace information and visual content and offer customers specialized tools for accessing, analyzing, and using our information and advertising on our marketplaces. Over time, we have expanded, and we expect to continue to 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.
Current wording
Our services are primarily derived from a database of building-specific and marketplace information and visual content and offer customers specialized tools for accessing, analyzing, and using our information and advertising on our marketplaces. Over time, we have expanded, and we expect to continue to expand, our existing real estate 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
We operate, develop products, and deliver our services in two reportable segments, Commercial Real Estate and Residential Real Estate. Our Commercial Real Estate segment offers commercial real estate information and analytics, online marketplaces, and 3D digital twin technology. Our Residential Real Estate segment hosts marketplaces which aggregate consumer demand for homes and apartments and we sell marketing and leads to the agents, owners, landlords, and property management companies that need to reach those consumers with their offerings. Our principal services are described in the following paragraphs:
Current wording
We operate, develop products, and deliver our services in two reportable segments, Commercial Real Estate and Residential Real Estate. Our Commercial Real Estate segment offers commercial real estate information, analytics, online marketplaces, and 3D digital twin technology. Our Residential Real Estate segment hosts marketplaces which aggregate consumer demand for homes and apartments and we sell marketing and leads to the agents, owners, landlords, and property management companies that need to reach those consumers with their offerings. Our principal services are described in the following paragraphs:
Previous wording
We expect Commercial Real Estate's revenue growth rate for the year ending December 31, 2026 to moderate compared to the revenue growth rate for the year ended December 31, 2025 due to the lack of benefit from the Matterport Acquisition realized in 2025.
Current wording
We expect Commercial Real Estate's revenue growth rate for the year ending December 31, 2026 to moderate compared to the revenue growth rate for the year ended December 31, 2025 primarily due to the nonrecurring benefit realized in 2025 from the Matterport Acquisition.
Previous wording
Our residential marketplaces enable renters and homebuyers to find their dream homes by combining our proprietary research and neighborhood content with listing information, while enabling property owners, managers, and real estate agents to advertise their properties. Our flagship brands in the U.S. are Apartments.com, Homes.com, and Land.com. Apartments.com and Land.com provide comprehensive advertising on a subscription basis. Homes.com offers real estate agents subscription memberships promoting the agent's listings and profile on our websites, as well as the ability for real estate agents and homeowners to promote a single listing. Domain and OnTheMarket are our primary brands in Australia and the U.K., respectively. Domain primarily provides agents premium listings for individual properties. OnTheMarket hosts agents' listings on a subscription basis. We expect Residential Real Estate's revenue growth rate for the year ending December 31, 2026 to accelerate compared to the revenue growth rate for the year ended December 31, 2025 due to a full year's benefit of the Domain Acquisition completed in August 2025 and an increase in the number of Homes.com members.
Current wording
Our residential marketplaces enable renters and homebuyers to find their dream homes by combining our proprietary research and neighborhood content with listing information, while enabling property owners, managers, and real estate agents to advertise their properties. Our flagship brands in the U.S. are Apartments.com, Homes.com, and Land.com. Apartments.com and Land.com provide comprehensive advertising on a subscription basis. Homes.com offers real estate agents subscription memberships promoting the agent's listings and profile on our websites, as well as the ability for real estate agents and homeowners to promote a single listing. Domain and OnTheMarket are our primary brands in Australia and the U.K., respectively. Domain primarily provides agents premium listings for individual properties. OnTheMarket hosts agents' listings on a subscription basis.
Previous wording
For the three months ended March 31, 2026 and 2025, our annualized net new bookings of subscription-based services on all contracts were$67 million and $56 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 revenue over time. Revenue from our subscription-based contracts was approximately 90% and 96% of total revenue for the three months ended March 31, 2026 and 2025, respectively. The decrease in our percentage of subscription-based revenue was primarily due to Domain, which sells premium listings for individual properties, as well as the transactional products and services sold by Matterport.
Current wording
For the three months ended June 30, 2026 and 2025, our annualized net new bookings of subscription-based services on all contracts were$69 million and $93 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 revenue over time. Revenue from our subscription-based contracts was approximately 89% and 95% of total revenue for the three months ended June 30, 2026 and 2025, respectively. The decrease in our percentage of subscription-based revenue was primarily due to Domain, which sells premium listings for individual properties, as well as the transactional products and services sold by Matterport.
Previous wording
For each of the trailing 12 months ended March 31, 2026 and 2025, 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 our cancellation rates for those services during 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. Revenue from our subscription-based contracts with a term of at least one year was approximately 74% and 80% of total revenue for three months ended March 31, 2026 and 2025, respectively. The decrease in the percentage of revenue from our subscription-based contracts with a term of at least one year was primarily due to Domain, which sells premium listings for individual properties, as well as the transactional products and services sold by Matterport.
Current wording
For each of the trailing 12 months ended June 30, 2026 and 2025, 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 our cancellation rates for those services during 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. Revenue from our subscription-based contracts with a term of at least one year was approximately 73% and 79% of total revenue for the trailing 12 months ended June 30, 2026 and 2025, respectively. The decrease in the percentage of revenue from our subscription-based contracts with a term of at least one year was primarily due to the Domain product which are sold as premium listings for individual properties, as well as the transactional products and services sold by Matterport.
Previous wording
We plan to continue to invest in our business and our services, evaluate strategic growth opportunities, and pursue our key priorities as described below. We are committed to supporting, improving, and enhancing our information, analytics, and online marketplace solutions, including expanding and improving our offerings for our client base and site users, including property owners, property managers, buyers, commercial tenants, and residential renters and buyers. We expect to continue our software development efforts to improve existing services, introduce new services, integrate and cross-sell services, integrate recently completed acquisitions, and expand and develop supporting technologies for our research, sales, and marketing organizations. We may reevaluate our priorities as economic conditions continue to evolve.
Current wording
We plan to continue to invest in our business and our services, evaluate strategic growth opportunities, and pursue our key priorities as described below. We are committed to supporting, improving, and enhancing our real estate information, analytics, and online marketplaces solutions, including expanding and improving our offerings for our client base and site users, including property owners, property managers, buyers, commercial tenants, and residential renters and buyers. We expect to continue our software development efforts to improve existing services, introduce new services, integrate and cross-sell services, integrate recently completed acquisitions, and expand and develop supporting technologies for our research, sales, and marketing organizations. We may reevaluate our priorities as economic conditions continue to evolve.
Previous wording
•Enhancement of our residential products and platforms. Leveraging rentals marketing and lead generation across platforms, in particular, Apartments.com and Homes.com. Scaling Homes.com through new product releases including depth advertising and the new homes builder program. Continue to develop new and improved tools for residential agents and brokers to help amplify their reach.
Current wording
•Enhancement of our residential products and platforms. Leveraging rentals marketing and lead generation across platforms, in particular, Apartments.com and Homes.com. Scaling Homes.com through new product releases including depth advertising. Continuing to develop new and improved tools for residential agents and brokers to help amplify their reach.
Previous wording
•International expansion of LoopNet and CoStar. We launched our LoopNet branded advertising products in Spain and France and continue to expand our footprint of commercial listings in these markets. We plan to continue integrating Domain and expect to launch LoopNet into the Australian market. In addition, we expect to launch CoStar in France and Australia.
Current wording
•International expansion of LoopNet and CoStar. We launched our LoopNet branded advertising products in Spain and France and continue to expand our footprint of commercial listings in these markets. In addition, we launched CoStar in France and plan to launch CoStar in Australia later this year.
Previous wording
•Launching additional AI-enabled features across our products. We plan to extend the revolutionary capability of Homes AI across the Company’s portfolio of leading platforms, including Apartments.com and LoopNet, ushering in a new era of intelligent, conversational real estate discovery. Our AI capabilities draw from property data, Matterport 3D digital twin technology, images, proprietary school data, neighborhood insights, and market intelligence.
Current wording
•Launching additional AI-enabled features across our products. We plan to extend the revolutionary capability of Homes Ai and Apartments Ai across the Company’s portfolio of leading platforms, including CoStar and LoopNet, ushering in a new era of intelligent, conversational real estate discovery. Our AI capabilities draw from property data, Matterport 3D digital twin technology, images, proprietary school data, neighborhood insights, and market intelligence.
Previous wording
•Continuing to expand our CoStar offerings with additional modules, including new data and enhanced analytics. We plan to add new homes data, rent benchmarking, and debt benchmarking. These enhancements will continue to drive new subscribers and additional usage under one platform.
Current wording
•Continuing to expand our CoStar offerings with additional modules, including new data and enhanced analytics. We have launched CoStar Rent Benchmark, an AI-abstracted dataset built from 4 million actual leases and lease documents. This product allows users to make more confident decisions with real data rather than using less reliable asking rents or broker report information. We are developing debt benchmarking. This feature will give lenders visibility to improve decisions across origination, portfolio risk, and compliance. We expect these enhancements will drive new subscribers and additional usage under one platform.
Previous wording
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.
Current wording
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, including judgments. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue for the period.
Previous wording
EBITDA is our net income (loss) 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 on an operating segment basis in our earnings releases, investor conference calls, and filings with the SEC.
Current wording
We typically disclose EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin on a consolidated and on an operating segment basis in our earnings releases, investor conference calls, and filings with the SEC.
Previous wording
Adjusted Net Income represents our net income (loss) adjusted for stock-based compensation expense, acquisition- and integration-related costs, including gains or losses on equity investments acquired in prospective targets and related to deal-contingent financial instruments, 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.
Current wording
Adjusted Net Income represents our net income (loss) adjusted for stock-based compensation expense; acquisition- and integration-related costs, including gains or losses on equity investments acquired in prospective targets and related to deal-contingent financial instruments; restructuring costs; settlement and impairment costs incurred outside our ordinary course of business, including judgments and related, non-recurring interest; and amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes.
Previous wording
We disclose Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net Income on a consolidated basis in our earnings releases, investor conference calls, and filings with the SEC.
Current wording
We disclose Adjusted EPS and Adjusted Net Income on a consolidated basis in our earnings releases, investor conference calls, and filings with the SEC.
Previous wording
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted EPS 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 35 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 (loss) has included significant charges for amortization of acquired intangible assets; depreciation and other amortization; acquisition- and integration-related costs, including gains or losses on equity investments acquired in prospective targets and related to deal-contingent financial instruments; restructuring and related costs, including certain advisory fees; and loss on debt extinguishment. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted EPS 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, 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 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, Adjusted EBITDA margin, Adjusted Net Income, or Adjusted EPS 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, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted EPS 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 35 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 (loss) has included significant charges for amortization of acquired intangible assets; depreciation and other amortization; acquisition- and integration-related costs, including gains or losses on equity investments acquired in prospective targets and related to deal-contingent financial instruments; interest income (expense); and restructuring and related costs, including certain advisory fees. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted EPS 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; and settlement and impairment costs incurred outside our ordinary course of business, including judgments and related, non-recurring interest. 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; interest income (expense); restructuring and related costs, including certain advisory fees; and settlement and impairment costs incurred outside our ordinary course of business, including judgments and related, non-recurring interest, 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, Adjusted Net Income, or Adjusted EPS to provide a financial measure by which to compare our operating performance against that of other companies in our industry.
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 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.
Current wording
•The amount of settlement and impairment costs incurred outside of our ordinary course of business, including judgments, may be useful for investors to consider because they generally represent gains or losses from the settlement of litigation matters, including judgments, 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 financial items that have been excluded from our net income (loss) to calculate Adjusted Net Income and Adjusted EPS are amortization of acquired intangible assets and other related costs, stock-based compensation, acquisition- and integration-related costs, including gains or losses on equity investments acquired in prospective targets and related to deal-contingent financial instruments, 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 non-GAAP financial measures as compared to net income (loss). In addition to these exclusions from net income (loss), we subtract an assumed provision for income taxes to calculate Adjusted Net Income. In both 2026 and 2025, we assume a 26.0% tax rate, which approximates our historical long-term statutory corporate tax rate, excluding the impact of discrete items.
Current wording
The financial items that have been excluded from our net income (loss) to calculate Adjusted Net Income and Adjusted EPS are amortization of acquired intangible assets and other related costs; stock-based compensation; acquisition- and integration-related costs, including gains or losses on equity investments acquired in prospective targets and related to deal-contingent financial instruments; restructuring and related costs; and settlement and impairment costs incurred outside our ordinary course of business, including judgments. These items are the same as discussed above with respect to the calculation of Adjusted EBITDA together with the material limitations associated with using non-GAAP financial measures as compared to net income (loss). We further exclude non-recurring interest charges related to judgments from Adjusted Net Income and Adjusted EPS as this may be useful for investors to consider because these non-recurring interest charges generally represent costs associated with the settlement of litigation matters, including judgments. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure. In addition to these exclusions from net income (loss), we subtract an assumed provision for income taxes to calculate Adjusted Net Income. In both 2026 and 2025, we assume a 26.0% tax rate, which approximates our historical long-term statutory corporate tax rate, excluding the impact of discrete items.
Previous wording
•an increase in CoStar revenue of $26 million, or 9%, due to an increase in subscribers, inflation-based price increases, and additional sales of STR Benchmarking,
Current wording
•an increase in CoStar revenue of $27 million, or 9%, due to an increase in subscribers, inflation-based price increases, and additional sales of STR Benchmarking,
Previous wording
•$60 million of revenue from the Domain Acquisition completed in August 2025 and
Current wording
•$70 million of revenue from the Domain Acquisition completed in August 2025 and
Previous wording
•an increase in the number of agents and properties advertised on our network, partially offset by a reduction in average price.
Current wording
•an increase in the number of memberships and properties advertised on our network, partially offset by a reduction in average price.
Previous wording
•an increase in web hosting, data, and content costs of $8 million, associated with the Matterport and Domain acquisitions,
Current wording
•an increase in web hosting, data, and content costs of $9 million, primarily due to the Domain Acquisition,
Previous wording
•an increase in personnel costs of $9 million, primarily due to incremental headcount added through the Matterport and Domain acquisitions,
Current wording
•an increase in personnel costs of $3 million, primarily due to incremental headcount added through the Domain Acquisition,
Previous wording
General and Administrative Expenses. General and administrative expenses decreased by $15 million, or 11%, to $126 million and, as a percentage of revenue, decreased from 19% to 14%. The decrease included:
Current wording
General and Administrative Expenses. General and administrative expenses decreased by $8 million, or 7%, to $114 million and, as a percentage of revenue, decreased from 16% to 12%. The decrease included:
Previous wording
•an increase in software and equipment costs of $6 million primarily due to the Matterport and Domain acquisitions.
Current wording
•an increase in software and equipment costs of $6 million, primarily due to the Domain acquisition and increased investment in enterprise technology for existing brands.
Previous wording
Customer Base Amortization Expense. Customer base amortization expense increased by $20 million, or 118%, to $37 million, and, as a percentage of revenue, increased from 2% to 4%. The increase was primarily due to amortization of intangible assets recognized in connection with the Matterport and Domain acquisitions.
Current wording
Customer Base Amortization Expense. Customer base amortization expense increased by $9 million, or 33%, to $36 million, and, as a percentage of revenue, increased from 3% to 4%. The increase was primarily due to amortization of intangible assets recognized in connection with the Domain acquisition.
Previous wording
Income Tax Expense. Income tax expense increased by $1 million, or 13%, to $9 million, and the effective tax rate was 74% of income before income taxes for the three months ended March 31, 2026, compared to (114)% of loss before income taxes for the three months ended March 31, 2025. The change in income tax expense was primarily due to higher income before taxes.
Current wording
Income Tax Expense. Income tax expense increased by $3 million, or 19%, to $19 million, and the effective tax rate was 26% of income before income taxes for the three months ended June 30, 2026, compared to 73% of income before income taxes for the three months ended June 30, 2025. The change in income tax expense was primarily due to higher income before taxes.
Previous wording
•an increase in CoStar revenue of $22 million, or 8%, due to increased sales driven by inflation-based price increases on renewals and an increase in subscribers, as well as the Visual Lease Acquisition,
Current wording
•an increase in CoStar revenue of $24 million, or 8%, due to increased sales driven by inflation-based price increases on renewals and an increase in subscribers, as well as the Visual Lease Acquisition,
Previous wording
•an increase in LoopNet revenue of $4 million, or 6%, due to an increase in the average price per listing, as well as the number of listings, and
Current wording
•an increase in LoopNet revenue of $6 million, or 9%, due to an increase in the average price per listing, as well as the number of listings, and
Previous wording
•a decrease of $3 million due to the discontinuation of certain products that were inconsistent with our long-term business strategy.
Current wording
•a decrease due to the discontinuation of certain products that were inconsistent with our long-term business strategy.
Previous wording
•an increase of $2 million in costs of goods sold related to sales of Matterport capture equipment and services.
Current wording
•an increase in $8 million in costs related to sales of Matterport capture equipment and services,
Previous wording
•an increase of $3 million for web hosting costs, and
Current wording
•an increase of $3 million for web hosting costs.
Previous wording
•an increase in personnel costs of $4 million due to the Matterport Acquisition,
Current wording
•an increase in occupancy and equipment costs of $4 million related to our sales force, and
Previous wording
•a $17 million increase in general and administrative expenses, primarily due to the Domain Acquisition, and to a lesser extent, from an increase in conference expenses from existing brands, and
Current wording
•an increase of $10 million in general and administrative expenses, primarily due to higher costs related to product web hosting, professional services, office supplies and occupancy all related to headcount increases in existing brands and to a lesser extent, incremental expenses from Matterport's post-acquisition operations.
Previous wording
Segment Adjusted EBITDA. Commercial Real Estate Adjusted EBITDA increased by $10 million to $161 million. The increase was due to the increase in revenue discussed above, partially offset by:
Current wording
Segment Adjusted EBITDA. Commercial Real Estate Adjusted EBITDA increased by $17 million to $161 million. The increase was due to:
Previous wording
•an $8 million increase in general and administrative expenses, primarily due to incremental expenses from Matterport's post-acquisition operations, including costs of product web hosting, sales of Matterport equipment, capture services, and third-party commissions.
Current wording
•an increase of $14 million in general and administrative expenses, primarily due to incremental expenses from Matterport's post-acquisition operations, including costs of product web hosting, sales of Matterport equipment, capture services, and third-party commissions.
Previous wording
•an increase in LoopNet revenue of $12 million, or 16%, due to an increase in the number of listings, as well as an increase in the average price per listing and the Domain Acquisition completed in August 2025, and
Current wording
•an increase in LoopNet revenue of $23 million, or 15%, due to an increase in the number of listings, as well as an increase in the average price per listing and the Domain Acquisition completed in August 2025, and
Previous wording
Residential Real Estate revenue increased by $102 million, or 32%, to $425 million primarily due to:
Current wording
Residential Real Estate revenue increased by $211 million, or 32%, to $869 million, primarily due to:
Previous wording
Gross Profit and Cost of Revenue. Gross profit increased by $122 million, or 21%, to $701 million, and the gross profit margin decreased from 79% to 78%. The increase in gross profit was due to higher revenue, partially offset by an increase in the cost of revenue. Cost of revenue increased by $43 million, or 28%, to $196 million and, as a percentage of revenue, increased from 21% to 22%. The increase in cost of revenue included:
Current wording
Gross Profit and Cost of Revenue. Gross profit increased by $237 million, or 20%, to $1.4 billion, and the gross profit margin decreased from 79% to 78%. The increase in gross profit was due to higher revenue, partially offset by an increase in cost of revenue. Cost of revenue increased $72 million, or 22%, to $393 million and, as a percentage of revenue, increased from 21% to 22%. The increase in cost of revenue primarily included:
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Rearranged current paragraphs (13)
Current report — wording carried from elsewhere
We expect Residential Real Estate's revenue growth rate for the year ending December 31, 2026 to accelerate compared to the revenue growth rate for the year ended December 31, 2025 due to a full year's benefit of the Domain Acquisition completed in August 2025 and an increase in the number of Homes.com memberships.
Current report — wording carried from elsewhere
EBITDA is our net income (loss) before interest income or expense, net; other expense or income, net; income taxes; depreciation; and amortization.
Current report — wording carried from elsewhere
•an increase of $8 million in professional services fees, primarily due to higher legal-related expenses from defending our intellectual property, and
Current report — wording carried from elsewhere
•an increase in personnel costs primarily due to additional headcount from the Matterport Acquisition, as well as costs for our existing employees and
Current report — wording carried from elsewhere
•higher personnel costs, primarily due to higher costs related to headcount growth within existing brands and
Current report — wording carried from elsewhere
•the increase in revenue discussed above and
Current report — wording carried from elsewhere
•an increase in CoStar revenue of $53 million, or 9%, due to an increase in subscribers, inflation-based price increases, and additional sales of STR Benchmarking,
Current report — wording carried from elsewhere
•$131 million of revenue from the Domain Acquisition completed in August 2025 and
Current report — wording carried from elsewhere
•an increase in the number of memberships and properties advertised on our network, partially offset by a reduction in average price.
Current report — wording carried from elsewhere
•a decrease due to the discontinuation of certain products that were inconsistent with our long-term business strategy.
Current report — wording carried from elsewhere
•an increase in $11 million in costs related to sales of Matterport capture equipment and services,
Current report — wording carried from elsewhere
•an increase of $6 million for web hosting costs.
Current report — wording carried from elsewhere
•higher personnel costs, primarily due to the Matterport and Visual Lease Acquisitions completed in February 2025 and November 2024, respectively and
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue for the period.
Previous report — wording carried elsewhere
•an increase in software and equipment costs of $3 million, primarily due to the Domain Acquisition.
Previous report — wording carried elsewhere
Commercial Real Estate revenue increased by $40 million, or 11%, to $409 million due to: