COSTAR GROUP, INC.

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 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.

Current wording

Our services are primarily derived from a database of building-specific, marketplace, and residential development 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. With the Zonda Acquisition, we have expanded our proprietary data, analytics, software, and marketplace capabilities into the new-home construction market, giving us a significant position in another major part of the residential real estate ecosystem.

Previous wording

Our services are typically distributed to our customers under subscription-based license agreements that generally renew automatically, the 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 digital twins hosted, 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 (i) providing premium listings for individual properties on our marketplaces, (ii) providing data capture services to create digital twins, (iii) the sale of Matterport cameras and capture equipment, and (iv) Ten-X auction fees.

Current wording

Our services are typically distributed to our customers under subscription-based license agreements that generally renew automatically, the 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 digital twins hosted, the number of transactions and average transaction size a broker or agent has closed, the number of properties or residential communities 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 (i) providing premium listings for individual properties and residential communities on our marketplaces, (ii) providing data capture services to create digital twins, (iii) the sale of Matterport cameras and capture equipment, (iv) Ten-X auction fees, (v) one-time sales of housing market data, advisory services, digital advertising, home plans, and software and related services, and (vi) ancillary products and services that are sold on an ad hoc basis.

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, 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 that 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

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.

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. With the Zonda Acquisition, we provide data, analytics, and software solutions, primarily on a subscription basis, and offer marketplace advertising solutions for the residential construction industry, primarily on a transactional basis.

Previous wording

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 wording

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, a partial year's benefit of the Zonda Acquisition completed in August 2026, and an increase in the number of Homes.com agent memberships.

Previous 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.

Current wording

For the three months ended September 30, 2026 and 2025, our annualized net new bookings of subscription-based services on all contracts were $37 million and$84 million, respectively. The decrease in net new bookings was primarily attributable to economic headwinds and slower-than-expected sales force growth within a competitive environment. 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 92% of total revenue for the three months ended September 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 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.

Current wording

For the trailing 12 months ended September 30, 2026 and 2025, our contract renewal rate for existing company-wide CoStar Group subscription-based services for contracts with a term of at least one year was approximately 88% and 89%, respectively, and our cancellation rate for those services during the same periods was approximately 12% and 11%, 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. Revenue from our subscription-based contracts with a term of at least one year was approximately 72% and 75% of total revenue for the trailing 12 months ended September 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 products, which are sold as premium listings for individual properties, as well as the transactional products and services sold by Matterport.

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. In addition, we launched CoStar in France and plan to launch CoStar in Australia later this year.

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 are continuing our plan to launch CoStar in Australia early next year.

Previous 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.

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 launching CoStar Debt Solutions Benchmark. 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, including judgments. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue for the period.

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 and related recoveries thereon. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue for the period.

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, 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.

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 recoveries thereon; and amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes.

Previous wording

We view EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted EPS as operating performance measures. We believe that the most directly comparable GAAP financial measure to EBITDA, Adjusted EBITDA, and Adjusted Net Income is net income (loss). We believe the most directly comparable GAAP financial measure to Adjusted EPS and Adjusted EBITDA margin are earnings per diluted share and net income (loss) divided by revenue, respectively. In calculating EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted EPS, we exclude from net income (loss) 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, Adjusted Net Income, and Adjusted EPS are not measurements of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net income (loss), 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, Adjusted Net Income, and Adjusted EPS as a substitute for any GAAP financial measure, including net income (loss) and earnings 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, Adjusted Net Income, and Adjusted EPS.

Current wording

EPS and Adjusted EBITDA margin are earnings per diluted share and net income (loss) divided by revenue, respectively. In calculating EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted EPS, we exclude from net income (loss) 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, Adjusted Net Income, and Adjusted EPS are not measurements of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net income (loss), 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, Adjusted Net Income, and Adjusted EPS as a substitute for any GAAP financial measure, including net income (loss) and earnings 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, Adjusted Net Income, and Adjusted EPS.

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; 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.

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 and recoveries thereon. 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, and recoveries thereon, 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 ind…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

•Income tax expense may be useful for investors to consider because it generally represents the taxes that may be payable for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business.

Current wording

•Income tax expense (benefit) may be useful for investors to consider because it generally represents the taxes that may be payable, or the benefit, for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business. However, we do not consider the amount of income tax expense (benefit) to be a representative component of the day-to-day operating performance of our business.

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, 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.

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 and recoveries thereon 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

Residential Real Estate revenue increased by $31 million, or 10%, to $335 million, primarily due to:

Current wording

Commercial Real Estate revenue increased by $31 million, or 7%, to $492 million due to:

Previous 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,

Current wording

•an increase in CoStar revenue of $26 million, or 8%, due to inflation-based price increases, an increase in subscribers, and additional sales of STR Benchmarking,

Previous wording

•a decrease in Other Commercial Real Estate revenue of $3 million, or 5%, primarily due to fewer properties transacted on Ten-X.

Current wording

•a decrease in Other Commercial Real Estate revenue of $5 million, or 8%, primarily due to fewer properties transacted on Ten-X.

Previous wording

•$70 million of revenue from the Domain Acquisition completed in August 2025 and

Current wording

•$58 million of revenue from the Domain and Zonda Acquisitions and

Previous wording

•the increase in revenue discussed above and

Current wording

Gross Profit and Cost of Revenue. Gross profit increased by $79 million, or 12%, to $741 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 $39 million, or 23%, to $211 million and, as a percentage of revenue, increased from 21% to 22%. The increase in cost of revenue included:

Previous wording

•an increase in personnel costs of $3 million, primarily due to incremental headcount added through the Domain Acquisition,

Current wording

•an increase in personnel-related costs of $6 million, primarily due to incremental headcount added through the Domain and Zonda Acquisitions,

Previous wording

•an increase of $2 million in costs related to sales of digital twin capture equipment and services attributable to the Matterport Acquisition completed in February 2025.

Current wording

•an increase in fulfillment costs of $3 million, primarily due to the digital twin capture equipment and services,

Previous wording

•an increase in web hosting, data, and content costs of $9 million, primarily due to the Domain Acquisition,

Current wording

•an increase in data and content costs of $2 million, primarily due to the Domain Acquisition.

Previous wording

Selling and Marketing (Excluding Customer Base Amortization) Expenses. Selling and marketing (excluding customer base amortization) expenses increased by $52 million, or 7%, to $816 million and, as a percentage of revenue, decreased from 50% to 45%. The increase primarily included:

Current wording

Selling and Marketing (Excluding Customer Base Amortization) Expenses. Selling and marketing (excluding customer base amortization) expenses decreased by $52 million, or 12%, to $366 million and, as a percentage of revenue, decreased from 50% to 38%. The decrease included:

Previous wording

•an increase in occupancy costs of $1 million, primarily due to the Domain Acquisition.

Current wording

•an increase in occupancy costs of $3 million, primarily due to facilities associated with the Domain Acquisition.

Previous 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:

Current wording

General and Administrative Expenses. General and administrative expenses decreased by $19 million, or 12%, to $138 million and, as a percentage of revenue, decreased from 19% to 14%. The decrease included:

Previous wording

•an increase in occupancy and equipment costs of $7 million related to our sales force,

Current wording

•a recovery of $7 million related to the Brown Judgment, partially offset by,

Previous 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.

Current wording

•an increase in software and equipment costs of $4 million, primarily due to the Domain Acquisition and increased investments in enterprise technology supporting our existing brands.

Previous 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.

Current wording

Customer Base Amortization Expense. Customer base amortization expense increased by $12 million, or 38%, to $44 million, and, as a percentage of revenue, increased from 4% to 5%. The increase was primarily due to amortization of intangible assets recognized in connection with the Domain and Zonda Acquisitions.

Previous wording

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 wording

Interest Income (Expense), Net. Interest income (expense), net changed by $27 million to a net expense of $1 million. The change was primarily due to a decrease in our cash and cash equivalents, as well as a $4 million increase in interest expense recognized during the current quarter due to no capitalized interest associated with the Richmond, Virginia campus construction project.

Previous 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.

Current wording

Income Tax Expense (Benefit). Income tax expense (benefit) changed by $25 million from a tax benefit of $15 million to an income tax expense of $10 million, and the effective tax rate was 12% of income before income taxes for the three months ended September 30, 2026, compared to 33% of loss before income taxes for the three months ended September 30, 2025. The change in income tax expense was primarily due to higher income before taxes.

Previous 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,

Current wording

•an increase in CoStar revenue of $28 million, or 10%, 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 $6 million, or 9%, 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 $8 million, or 11%, due to an increase in the average price per listing, as well as the number of listings, and

Previous wording

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 wording

Gross Profit and Cost of Revenue. Gross profit increased by $110 million, or 20%, to $662 million, and the gross profit margin decreased from 80% to 79%. The increase in gross profit was due to higher revenue, partially offset by, an increase in cost of revenue. Cost of revenue increased by $31 million, or 22%, to $172 million and, as a percentage of revenue, increased from 20% to 21%. The increase in cost of revenue primarily included:

Previous wording

•an increase in $8 million in costs related to sales of Matterport capture equipment and services,

Current wording

•an increase in costs related to sales of Matterport capture equipment and services of $7 million, primarily due to the Matterport Acquisition,

Previous wording

Selling and Marketing (Excluding Customer Base Amortization) Expenses. Selling and marketing (excluding customer base amortization) expenses increased by $40 million, or 6%, to $764 million and, as a percentage of revenue, decreased from 54% to 50%. The increase primarily included:

Current wording

Selling and Marketing (Excluding Customer Base Amortization) Expenses. Selling and marketing (excluding customer base amortization) expenses increased by $87 million, or 26%, to $418 million and, as a percentage of revenue, increased from 48% to 50%. The increase primarily included:

Previous wording

Software Development Expenses. Software development expenses increased by $29 million, or 18%, to $191 million and, as a percentage of revenue, increased from 12% to 13%. The increase primarily included:

Current wording

Software Development Expenses. Software development expenses increased by $25 million, or 31%, to $106 million and, as a percentage of revenue, increased from 12% to 13%. The increase primarily included:

Previous wording

Customer Base Amortization Expense. Customer base amortization expense increased by $17 million, or 170%, to $27 million, and, as a percentage of revenue, increased from 1% to 3%. The increase was primarily due to the Matterport and Visual Lease Acquisitions.

Current wording

Customer Base Amortization Expense. Customer base amortization expense increased by $22 million, or 220%, to $32 million, and, as a percentage of revenue, increased from 1% to 4%. The increase was primarily due to the Matterport, Visual Lease, and Domain Acquisitions.

Previous wording

•a decrease in marketing expenses of $13 million.

Current wording

•an increase in general and administrative expenses of $13 million, primarily due to higher product web hosting costs, occupancy costs and, higher hardware expenses related to Matterport, partially offset by,

Previous wording

The following table provides a comparison of our selected condensed consolidated results of operations for the six months ended June 30, 2026 and 2025 (in millions):

Current wording

The following table provides a comparison of our selected condensed consolidated results of operations for the nine months ended September 30, 2026 and 2025 (in millions):