CoStar Group (NASDAQ: CSGP) reported third-quarter results on Oct. 25.
The new business model for the provider of commercial real estate information is exceeding expectations for sales and profits, and management now expects CoStar to exceed its goal of $1 billion in run-rate revenue exiting 2017.
Continue Reading Below
CoStar Group results: The raw numbers
What happened with CoStar Group this quarter?
Companywide net new bookings leapt 31% year over year to $34 million, driven by a 43% jump in multifamily bookings.
"We believe we've built the best user experience in the market, helping millions of people find new homes in our Apartments.com network," founder and CEO Andrew Florance said during a conference call with analysts. "Better user experience, deeper content, effective SEO [search-engine optimization] strategies, and great marketing [are] consistently driving huge traffic growth, an advantage to the Apartments.com network, and it's positively impacting these sales results."
Moreover, CoStar's profitability improved significantly in the third quarter; adjusted EBITDA margin rose to 34%, up from 23% in the second quarter. In turn, adjusted EBITDA -- which excludes stock-based compensation, acquisition-related charges, and certain other items -- jumped 25% year over year, to $84 million.
All told, adjusted (non-GAAP) net income increased 29% to $46 million, or $1.41 per share.
For the fourth quarter, CoStar Group expects:
- Revenue in a range of $251 million to $254 million
- Adjusted EBITDA of $85 million to $89 million
- Non-GAAP earnings per share of $1.31 to $1.38
The company's full-year 2017 guidance now includes:
- Revenue of $962 million to $965 million, up from a prior forecast of $954 million to $960 million
- Adjusted EBITDA of $287 million to $291 million, an increase of $17 million at the midpoint from CoStar's previous outlook
- Non-GAAP EPS of $4.65 to $4.73, up from $4.42 to $4.52
Additionally, Florance praised the company's successful integration of its CoStar and LoopNet databases and revamped business model, both of which should continue to fuel CoStar Group's results in the quarters ahead:
With its LoopNet, CoStar Suite, and Apartments.com divisions all performing well, CoStar Group is a business firing on all cylinders.
10 stocks we like better than CoStar GroupWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and CoStar Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of October 9, 2017