Costar Group, Inc. · NASDAQ:CSGP
Costar — Q1 2024 Earnings Presentation
72 slides from Costar's earnings presentation, Apr 23, 2024
Slide 1: First Quarter 2024 Investor Presentation
First Quarter 2024 Investor Presentation
Slide 2: Legal Disclaimer
Legal Disclaimer Certain information in this presentation includes “forward-looking statements” within the meaning of federal securities laws, including financial projections of CoStar Group, Inc. (“CoStar Group” or the “Company”), addressable markets, statements about management’s plans, growth str
Slide 3: First Quarter 2024 Highlights
First Quarter 2024 Highlights
Slide 4: First Quarter 2024 Highlights
First Quarter 2024 Highlights • First quarter 2024 revenue of $656 million increased 12% year-over-year, exceeding the high end of our guidance range • CoStar annual run rate revenue crossed $1 billion in the first quarter, joining Apartments.com as our first two billion-dollar businesses • Record a
Slide 5: Traffic Growth Accelerating 93% Year over Year in Q1 2024
Traffic Growth Accelerating 93% Year over Year in Q1 2024 190 170 170 MILLION 150 Unique Visitors (in millions) 130 110 90 70 50 30 10 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: Google Analytics Unique Visitors – All CoStar Sites. Growth rate based on 1Q24 vs 1Q23.
Slide 6: Traffic to our Residential Network Reaches 156M Unique Visitors in March
Traffic to our Residential Network Reaches 156M Unique Visitors in March 150 Average Unique Visitors 130 (in millions) 110 90 70 50 Residential Network traffic includes Homes.com Network, Apartments.com Network and Lands.com Network according to Google Analytics. .
Slide 7: Acquisition Announced April 22nd, 2024
Acquisition Announced April 22nd, 2024 • Matterport is the global leader in immersive 3D digital twins and artificial intelligence for the real estate industry • CoStar Group agreed to acquire all outstanding shares of Matterport, Inc. for $2.75 per share in cash and $2.75 per share in CoStar Group
Slide 8: First Quarter 2024 Results
First Quarter 2024 Results First Quarter $656 million Revenue 12% year-over-year growth Adjusted EBITDA $12 million Net new bookings $86 million $7 million Net income $0.02 per diluted share $42 million Non-GAAP net income $0.10 per diluted share
Slide 9: 2024 Outlook
2024 Outlook Second Quarter Full Year $674 million to $679 million $2.76 billion to $2.77 billion Revenue 11% to 12% year-over-year growth 12% to13% year-over-year growth $5 million to $10 million $185 million to $205 million Adjusted EBITDA 1% margin 7% margin $1 million to $5 million $97 million t
Slide 10: Company Overview
Oe CoStar Group” Company Overview
Slide 11: Mission Statement
MISSION STATEMENT We are digitizing the world’s real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives. Oe} CoStar Group”
Slide 12: CoStar Group is the Global Leader in Digitizing Real Estate
CoStar Group is the Global Leader in Digitizing Real Estate 38 2 billion+ $5 billion+ ~6,200 years of real estate annual visits investment in research employees experience to our websites and technology 500 Innovator of the Year Best Integrated Marketing Campaign 74 14 ~$35 billion ~$5 billion count
Slide 13: 38 Years of Growth and Innovation
38 Years of Growth and Innovation
Slide 14: A Global Leader in the Digital Transformation of the $300+ Trillion Real Estate Industry
A Global Leader in the Digital Transformation of the $300+ Trillion Real Estate Industry • Long growth runway: Global addressable market for real estate information and marketplaces estimated at > $100 billion. • Strong competitive position: Massive proprietary dataset built over 38 years with > $5
Slide 15: Global Real Estate: A $300 Trillion Asset Class
Global Real Estate: A $300 Trillion Asset Class U.S. REAL ESTATE $70 TRILLION GLOBAL REAL ESTATE (Year CoStar entered market) $300 TRILLION Office (1986) Industrial (1994) United States Retail (2004) Rural Land (2011) Apartment (2014) Single Family Hotel Residential/ (2019) Canada New Homes China (2
Slide 16: ~$40B North American Addressable Market, Global Market > $100B
~$40B North American Addressable Market, Global Market > $100B Total North American Addressable Market $4 Billion $9 Billion $5 Billion >$15 Billion $6 Billion 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% TAM Sources: CoStar, Apartments, LoopNet and Ten-X – CoStar estimate Homes.com – extrapolation o
Slide 17: Strong Double-Digit Growth with Two Brands Over $1 Billion
Strong Double-Digit Growth with Two Brands Over $1 Billion 5 YEAR CAGR $2.8B 15% 20% TOTAL 5 YEAR REVENUE CAGR $2.5B 8% 150% 2023-2024 only $2.2B 13% $1.9B $1.7B $1.1B 17% $1.4B $1.0B 10% 2019 2020 2021 2022 2023 2024E Costar Multifamily LoopNet Residential Information Services Other Marketplaces
Slide 18: Consecutive Quarters of Double-Digit Revenue Growth
52 Consecutive Quarters of Double-Digit Revenue Growth Regardless of Commercial Property Transaction Volumes 700 Quarterly Revenue Transaction Volumes High Inflation 2022-2024: +12% Growth 600 Pandemic 260 • 96% subscription revenue 2020-2021: +18% Growth 500 • 81% annual contracts Quarterly Revenue
Slide 19: More Diversified with More Countercyclical Business Mix
More Diversified with More Countercyclical Business Mix Since the Great Recession 2008 REVENUE 2024E REVENUE Other Marketplaces Other 5% Information Revenue Residential Services 5% LoopNet 10% CoStar 37% CoStar Information Marketplaces 92% & Analytics 58% 42% Information & Analytics Multifamily Info
Slide 20: Diversified Client Base with Minimal Concentration
Diversified Client Base with Minimal Concentration TOP 1,000 CLIENTS: REVENUE BY CLIENT SEGMENT NONE MORE THAN 2% Other 15% Broker 21% Lender 4% Investor 7% Property Management Owner 19% 34% *Revenue by client segment from December 2023 and revenue by client extrapolated from March 2024 internal CoS
Slide 21: Successful Acquisition and Integration Track Record
Successful Acquisition and Integration Track Record 2024 REVENUE COMPOSITION $600 Acquired 24% $500 Millions $400 Organic 76% $300 $200 $100 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Organic Revenue Acquired Revenue at the time of acquisition
Slide 22: High Growth, High Margin Subscription Business Model
High Growth, High Margin Subscription Business Model ✓ 23% Revenue CAGR since IPO 24 years ago Double-Digit Revenue Growth ✓ CoStar and Apartments.com reached $1 billion in annual run rate revenue ✓ Apartments.com revenue growth of 20%+ for five consecutive quarters ✓ 96% subscription revenue with 8
Slide 23: The fastest growing U.S. residential marketplace
The fastest growing U.S. residential marketplace
Slide 24: Our Vision
Our Vision Establish Homes.com as the #1 residential real estate marketplace
Slide 25: Homes.com by the Numbers
Homes.com by the Numbers 110M 156M Homes.com Residential Monthly Unique Network Monthly Visitors Unique Visitors 2M+ 20K+ Residential For Sale Neighborhood and Rental Listings Content 650K+ Millions Agents with of Leads 1+ Listing * Sources: The Homes.com site surpassed 110 million monthly unique vi
Slide 26: A Better Business Model – Your Listing, Your Lead
A Better Business Model – “Your Listing, Your Lead” • Only Homes.com connects you to the listing agent who knows the home best • No cold calls, robocalls, or spam from random agents • Competitor models monetize buyer agency, taking one third of agent’s commissions • Homes.com is providing millions o
Slide 27: Our Proprietary Content Sets Us Apart
Our Proprietary Content Sets Us Apart. Consumers Aren’t Just Looking for a Home, They’re Looking for a Community. Homes.com is digitizing rich content for communities across the U.S. 20,000+ 40,000+ Neighborhoods Parks 125,000+ 65,000+ Schools Condo Buildings Coming soon…Matterport 3D Virtual Tours
Slide 28: Portals Adhering to Your Listing Your Lead Are the Most Successful
The Real Estate Portals Adhering to the Your Listing Your Lead Principal are the Most Successful Not Your Listing Your Lead Your Listing Your Lead $2.0 $2.0 $1.5 $1.5 $1.0 $1.0 $0.5 $0.5 $0.0 $0.0 Zillow Redfin CoStar Rightmove REA Group Scout24 Lifull ($0.5) ($0.5) Group ($1.0) ($1.0) ($1.5) ($1.5)
Slide 29: We've done your home work. 2024 Supercharged Marketing Campaign
“We’ve done your home work.” 2024 Supercharged Marketing Campaign
Slide 30: Biggest Real Estate Campaign Ever
BIGGEST Real Estate Campaign Ever Working on behalf of the industry to help agents sign more buyer and seller agreements, drive demand for their listings and close more transactions. Over a Reaching BILLION 80 90% DOLLARS BILLION invested impressions of households
Slide 31: Homes.com is EVERYWHERE
Homes.com is EVERYWHERE. No other competitors come close to our investment to drive leads to all agents
Slide 32: Homes.com Unaided Brand Awareness up 6x in 6 Months to 24%
Homes.com Unaided Brand Awareness up 6x in 6 Months to 24% UP 6X 24% 4% Sept ‘23 Mar ‘24
Slide 33: Investing to Create the #1 Residential Portal in the UK
Investing to Create the #1 Residential Portal in the UK ✓Average monthly unique visitors up 107% year-over-year ✓Listings up 40% year-over-year ✓Agent advertisers now over 15,000 ✓Leads have grown 50% year-over-year
Slide 34: Now the #2 Trafficked Residential Portal in the UK
Now the #2 Trafficked Residential Portal in the UK Traffic and Engagement OnTheMarket.com had more total visits compared to zoopla.co.uk in March 2024
Slide 35: Discover your new home
Discover your new home. Helping 100 million renters find their perfect fit.
Slide 36: Apartments.com by the Numbers
Apartments.com by the Numbers $1B 21% Year-over-Year Revenue Run Rate Revenue Growth #1 1M+ Rank in Brand Rental Awareness Availabilities 1B 43M Average Monthly Annual Visits Unique Visitors *All data as of 3/31/24. Revenue Run Rate based on first quarter 2024 annualized.. Traffic data from Google A
Slide 37: Apartments.com delivers five straight quarters of 20%+ organic growth
Apartments.com delivers five straight quarters of 20%+ organic growth 25% 24% 23% 23% 21% 20% 20% 15% 10% 5% 0% Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Slide 38: Our Biggest Customer Count Ever
Our Biggest Customer Count Ever! ~73,000 APARTMENT COMMUNITIES now advertise on Apartments.com
Slide 39: Apartments.com Beats Competition on the Metrics That Matter to Advertisers
Apartments.com Beats Competition on the Metrics That Matter to Advertisers 2X more time 2X higher 3X more per visit conversion leases Sources: Traffic from Comscore Media Matrix, October 2023 - March 2024; Lease data from Rent Dynamics, January - September 2023
Slide 40: Unaided Brand Awareness
Unaided Brand Awareness 51% 53% 52% 51% 49% 44% 40% 37% 36% 36% 35% 34% 34% 34% 33% 32% 31% 30% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Source: Dynata a leading market research sampling provider
Slide 41: Apartments Network Traffic Leads Zillow Eight Consecutive Quarters
Apartments Network Traffic Leads Zillow Eight Consecutive Quarters 50 Average Monthly Unique Visitors (in millions) 45 40 35 30 25 20 Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Zillow Rentals Apartments.com Network Source: Zillow.com from self reported internal UV’s; Apartments.
Slide 42: Tremendous Opportunity Ahead in the Small to Medium Property Space
Tremendous Opportunity Ahead in the Small to Medium Property Space Annual Universe Clients Subscription Revenue Unit Range TAM ($M) (Properties) (Properties) Revenue Run Penetration Rate ($M) 1-49 23M 18K $64M 1% $6B $7B opportunity 50-99 69K 11K $116M 11% $1B 100+ 104K 44K $832M 40% $2B Grand Total
Slide 43: Ten Years of Success for Apartments.com
Ten Years of Success for Apartments.com Growth Since Acquisition 2014 2024 5th place in highly fragmented The leading online rental Industry Rank #1 online rental search industry marketplace Revenue $75 million $1 billion revenue run rate 13X 4 million average monthly unique Traffic 43 million month
Slide 44: A global leader in commercial real estate information, analytics, and news
A global leader in commercial real estate information, analytics, and data-driven news
Slide 45: CoStar by the Numbers
CoStar by the Numbers $1B 220K+ Revenue Run Rate Subscribers 895K 7M Commercial Listings Properties 15M 5M Lease Sale Transactions Transactions * Revenue Run Rate based on March 24 annualized. All other data from CoStar internal database as of March 2024.
Slide 46: CoStar Product Investments Expand the Market Size
CoStar Product Investments Expand the Market Size, Resulting in Long-Term Double-Digit Growth $250 $4B U.S. MARKET SIZE 12% Revenue Growth Rate Tenants Ten Year CAGR Hospitality $200 Lenders Quarterly Revenue $150 Owners / (in millions) Investors Brokers / $100 Appraisers $50 $0 2005 2006 2007 2008
Slide 47: Unparalleled Research Methodology
Unparalleled Research Methodology 1,000+ 400 Drones 70 Analysts and In-market Economists canvassers 1 1,600 Cessna capturing aerial insights Researchers Automated data extraction 1,200 Software Developers To facilitate the gathering of data 50 Journalists Across Data feeds and third-party data 1 Bas
Slide 48: CoStar Hospitality – STR Benchmarking by the Numbers
CoStar Hospitality – STR Benchmarking by the Numbers 23% 81K Total Subscription Hotels Worldwide Revenue Growth 10M 190 Guest Rooms Countries BENCHMARKING $300M 98% Total Addressable Renewal Rate Market *Based on internal CoStar data as of March 2024.. Revenue growth represents Benchmarking and CoSt
Slide 49: STR Data Includes 81,000+ Hotels Across ~190 Countries
STR Data Includes 81,000+ Hotels Across ~190 Countries
Slide 50: The #1 global commercial real estate marketplace
The #1 global commercial real estate marketplace
Slide 51: LoopNet by the Numbers
LoopNet by the Numbers $276M 14% 5 Year Revenue Revenue Run Rate CAGR 13M 330K Monthly Unique CRE Brokers & Visitors Worldwide Owners Advertising 12X 96% #1 Google Fortune 1000 keywords than Companies closest competitor Active on Site *All data as of March 2024. Run Rate based on 1Q24 annualized. Tr
Slide 52: Commanding Share of Traffic vs. Marketplace Competitors
Commanding Share of Traffic vs. Marketplace Competitors LoopNet Network vs. Competitors LoopNet Network crexi propertyshark commercialcafe officespace commercialsearch 67x globallistings Unique Visitors of the Avg. realnex CRE Marketplace Competitor Instantoffices buildout vts 6x rcm1 Unique Visitor
Slide 53: LoopNet Revenue Up 5x Since Acquisition
LoopNet Revenue Up 5x Since Acquisition $70 Domestic International Early Stages of a Massive $60 Global Opportunity $5 Billion Quarterly Revenue in Millions $50 North American TAM $40 $15 Billion Global TAM $30 $20 $10 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 54: LoopNet International Expansion Underway
LoopNet International Expansion Underway LoopNet Canada loopnet.ca LoopNet UK loopnet.co.uk LoopNet Spain loopnet.es LoopNet France loopnet.fr
Slide 55: The leading platform for lease accounting and management
The leading platform for lease accounting and management
Slide 56: Real Estate Manager by the Numbers
Real Estate Manager by the Numbers 21% 97% 10 Year Revenue Customer CAGR Retention Rate $10B Monthly Lease Payments Managed 625K 33K Real Estate System Users Leases All data from internal database as of March 2024.
Slide 57: Platform for Managing the Tenant's Entire Lease Lifecycle
Platform for Managing the Tenant’s Entire Lease Lifecycle The Most Comprehensive Portfolio Management Platform with Integrated CoStar Real Estate Data Drive Cost Savings Optimize Real Estate Portfolios Achieve Lease Accounting Compliance
Slide 58: The SMARTER, BETTER, FASTER way to transact commercial real estate
The SMARTER, BETTER, FASTER way to transact commercial real estate
Slide 59: Ten-X by the Numbers
Ten-X by the Numbers $31B 92% Properties Sold in Assets Sold 90 Days or Less 61% Trade Rate Since 2020 95% 85% Non-Distressed Close Rate Assets Assets sold since inception in 2009. Trade rate since acquisition in 2020. Close rate, time to close and non-distressed assets sold are for the the first qu
Slide 60: Ten-X Platform Closes Deals 2-3x Faster than Offline Transactions
Ten-X Platform Closes Deals 2-3x Faster than Offline Transactions Asset Marketing & Asset Evaluation Bidder Qualification Contracts & Closing +- 10 Days Onboarding & Due Diligence Online Auction List To Close In Under 100 Days
Slide 61: Ten-X Revenue Opportunity is >$3 Billion at Current Transaction Levels
Ten-X Revenue Opportunity is >$3 Billion at Current Transaction Levels Market Penetration % ($1M - $10M Property Size) Revenue Opportunity Current 1% $50 Million 5% $155 Million 10% $310 Million 25% $775 Million 33% $1 Billion 100% $3.1 Billion 0 500 1,000 1,500 2,000 2,500 3,000 Annual Revenue (in
Slide 62: The largest rural real estate marketplace in the country
The largest rural real estate marketplace in the country
Slide 63: Land.com by the Numbers
Land.com by the Numbers 14% 11M 5 Year Revenue Average Monthly CAGR Visitors 8K Paid Clients 490K 47K Land Sale Comps Paid Listings in Database *Traffic data for the Land.com network from Google Analytics for Q1 24 Paid listing, comps and client data from internal database as of 3/31/24.
Slide 64: Land.com Leads All Competitors in Traffic Share
Land.com Leads All Competitors in Traffic Share Land.com LandSearch LandFlip Network AcreValue 9M visits per month Land Broker MLS Farm And Ranch 3.4X our largest competitor Homes And Land LandHub - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000
Slide 65: The largest business-for-sale marketplace in the U.S.
The largest business-for-sale marketplace in the U.S.
Slide 66: BizBuySell by the Numbers
BizBuySell by the Numbers 9% 38M 5 Year Revenue CAGR Annual Visits 2.8M Annual Leads Delivered 120K 150K Annual Sold Business Paid Listings Comps in Database Traffic data for 1Q24 rom Google Analytics. Listing, Lead and Comp data from internal database as of 3/31/24.
Slide 67: More Traffic Than All Competitors Combined
More Traffic Than All Competitors Combined BizBuySell Network BusinessesForSale.com 4M FranchiseDirect visits per month FranchiseGator BusinessBroker.net 17x our largest competitor BizBen GlobalBX * BizBuySell Network traffic vs similar sites; BizBuySell is from Google Analytics; Competitor data fro
Slide 68: Appendix
Ot CoStar Group” Appendix
Slide 69: Non-GAAP Measures
Non-GAAP Measures For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the CoStar Group Inc.’s (the “Company” of “CoStar Group”) financial condition
Slide 70: Reconciliation of Net Income to Non-GAAP Net Income - Unaudited
Reconciliation of Net Income to Non-GAAP Net Income - Unaudited The following table presents a reconciliation of CoStar Group’s, Non-GAAP Net Income, including forward-looking guidance Non-GAAP Net Income, to the most directly comparable GAAP financial measure, net income. For the Year Ended Decembe
Slide 71: Reconciliation of Net Income to Adjusted EBITDA - Unaudited
Reconciliation of Net Income to Adjusted EBITDA - Unaudited The following table presents a reconciliation of CoStar Group’s Adjusted EBITDA, including forward-looking guidance range Adjusted EBITDA, to the most directly comparable GAAP financial measure, net income. For the Three For the Three For t
Slide 72: Use of Operating Metrics and Other Definitions
Use of Operating Metrics and Other Definitions CoStar Group reviews a number of operating metrics to evaluate its business, measure performance, identify trends, formulate business plans and make strategic decisions. This presentation includes Net New Bookings. Going forward, CoStar Group expects to