Costar Group, Inc. · NASDAQ:CSGP
Costar — Q3 2024 Earnings Presentation
54 slides from Costar's earnings presentation, Oct 22, 2024
Slide 1: Third Quarter 2024 Investor Presentation
Third Quarter 2024 Investor Presentation
Slide 2: Legal Disclaimer
Legal Disclaimer This news release and the Company’s earnings conference call contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about CoStar Group's plans, objectives, expectati
Slide 3: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights
Slide 4: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights • Third quarter 2024 revenue of $693 million increased 11% year-over-year for the 54th consecutive quarter of double-digit revenue growth • Our two businesses with billion-dollar run rates delivered double-digit revenue growth • Net Income of $53 million, EBITDA of $51
Slide 5: Average Monthly Unique Visitors (in millions)
Year-over-Year Traffic Growth of 28% in Q3 2024 200 180 163 Average Monthly Unique Visitors (in millions) MILLION 160 140 120 100 80 60 40 20 - 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 1Q20 3Q20 1Q21 3Q21 1Q22 3Q22 1Q23 3Q23 1Q24 3Q24 *Prior to June 1, 2024, we measured
Slide 6: Third Quarter and Year to Date 2024 Results
Third Quarter and Year to Date 2024 Results Third Quarter Year to Date $693 million $2,027 million Revenue 11% year-over-year growth 12% year-over-year growth $53 million $79 million Net Income $0.13 per diluted share $0.19 per diluted share Adjusted EBITDA $76 million $129 million Net New Bookings
Slide 7: 2024 Fourth Quarter and Full Year Outlook
2024 Fourth Quarter and Full Year Outlook Fourth Quarter Full Year $693 million to $703 million $2.72 billion to $2.73 billion Revenue 9% year-over-year growth 11% year-over-year growth $43 million to $49 million $122 million to $128 million Net Income $0.11 to $0.12 per diluted share $0.30 to $0.31
Slide 8: Company Overview
Oe CoStar Group” Company Overview
Slide 9: 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 10: CoStar Group is the Global Leader in Digitizing Real Estate
CoStar Group is the Global Leader in Digitizing Real Estate 38 3 billion+ $5 billion+ ~6,450 years of real estate annual visits investment in research employees experience to our websites and technology member of the 500 Innovator of the Year COMPANY OF THE YEAR Best Integrated Marketing Campaign 72
Slide 11: 38 Years of Growth and Innovation
38 Years of Growth and Innovation
Slide 12: 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 13: 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 14: $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 S ources: CoStar, A partments, LoopNet a nd Ten-X – CoStar estimate Homes.com – extrapolatio
Slide 15: Strong Double-Digit Growth with Two Brands Over $1 Billion in Revenue Run Rate
Strong Double-Digit Growth with Two Brands Over $1 Billion in Revenue Run Rate 5 YEAR CAGR $2.7B 14% 19% TOTAL 5 YEAR REVENUE CAGR $2.5B 8% 116% 2023-2024 only $2.2B 13% $1.9B $1.7B $1.1B 17% $1.4B $1.0B 11% 2019 2020 2021 2022 2023 2024E Costar Multifamily LoopNet Residential Information Services O
Slide 16: Consecutive Quarters of Double-Digit Revenue Growth
54 Consecutive Quarters of Double-Digit Revenue Growth Regardless of Commercial Property Transaction Volumes Quarterly Revenue Transaction Volumes High Inflation 800 2022-2024: +12% Growth 700 Pandemic 260 • 96% subscription revenue 2020-2021: +18% Growth 600 • 80% annual contracts Quarterly Revenue
Slide 17: More Diversified with More Countercyclical Business Mix Since the Great Recession
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 Information Mult
Slide 18: 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% *Re ven ue by client segmen t and by clien t extr apolated from December 20 23 CoStar billing data.
Slide 19: Successful Acquisition and Integration Track Record
Successful Acquisition and Integration Track Record $700 2024 REVENUE COMPOSITION Acquired $600 23% $500 Millions $400 Organic 77% $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 20: High-Growth, High-Margin Subscription Business Model
High-Growth, High-Margin Subscription Business Model ✓ 23% Revenue CAGR since IPO 26 years ago Double-Digit Revenue Growth ✓ Double-digit revenue growth for 54 straight quarters Predictable Subscription ✓ 96% subscription revenue with 80% annual contracts Services Revenue ✓ 95% renewal rate for clie
Slide 21: The fastest growing U.S. residential marketplace
The fastest growing U.S. residential marketplace
Slide 22: Our Vision
Our Vision Establish Homes.com as the #1 residential real estate marketplace
Slide 23: Homes.com by the Numbers
Homes.com by the Numbers 85M 130M Homes.com Homes.com Network Average Monthly Average Monthly Unique Visitors Unique Visitors 2.4M $56M Annualized Net New Residential For Sale Bookings and Rental Listings ~11K Millions Member Agents of Leads * Sour ces: Traffic data from Go ogle Analytics for the th
Slide 24: Homes.com Network Traffic Reaches 130M Average Monthly Unique Visitors in Q3
Homes.com Network Traffic Reaches 130M Average Monthly Unique Visitors in Q3 150 Average Monthly Unique Visitors 130 (in millions) 110 90 70 50 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Homes.com Network traffic according to Google Analytics. *Prior to June 1, 2024, we measured average monthly unique visit
Slide 25: A Better Business Model – Your Listing, Your Lead
A Better Business Model – “Your Listing, Your Lead” • The most powerful real estate digital marketing solution to sell a home • Agents are using Homes.com to sell homes faster, win more listings and grow their brands • Only Homes.com prominently displays the listing agent on the listing and connects
Slide 26: Homes.com Displays the Listing Agent, Firm & Buyer Agent Directory
Homes.com Displays the Listing Agent, Firm & Buyer Agent Directory
Slide 27: 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
Slide 28: 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. Completed 20,000+ Neighborhoods 5,000+ 40,000+ Cities Parks 125,000+ 65,000+ Schools Condo Buildings Launched Matterpo
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 8x to 33%
Homes.com Unaided Brand Awareness Up 8x to 33% UP 8X 33% 4% Sept ‘23 Sept ‘24 Source: RPA, an advertising and marketing agency.
Slide 33: Member Agent Listings Sell Homes Faster and For More Money
Member Agent Listings Sell Homes Faster and For More Money Than Non-Member Agents 34X more listing shares 62Xmore favorites 20% more likely to go under contract within first 10 days $11K 50% average higher sales price more listings won in a month on average All data from internal CoStar database as
Slide 34: Investing to Create the #1 Residential Portal in the UK
Year-Over-Year Growth Investing to Create the #1 Residential Portal in the UK Traffic Unique Visitors Total Stock on Site +212% +348% +45% Listing Estate Agents Sales Leads +27% +76% *Year over year growth as of 9/30/24. Traffic per Google Analytics. All other data from internal CoStar database as o
Slide 35: Discover your new home. Helping 100 million renters find their perfect fit.
Discover your new home. Helping 100 million renters find their perfect fit.
Slide 36: Apartments.com by the Numbers
Apartments.com by the Numbers $1.1B 16% Year-over-Year Revenue Run Rate Revenue Growth 67% 1M+ Unaided Brand Rental Awareness Availabilities 1B 43M Average Monthly Annual Visits Unique Visitors *All data as of 9/30/24. Revenue Run Rate based on September 2024 annualized. Traffic data for Apartments.
Slide 37: More Apartment Communities Advertise on Apartments.com
More Apartment Communities Advertise on Apartments.com ~75,000 APARTMENT COMMUNITIES now advertise on Apartments.com
Slide 38: Owners & Operators Rank Apartments.com #1 in Metrics that Matter
Owners & Operators Rank Apartments.com #1 in Metrics that Matter ✓ Best brand awareness # 1 ✓ Highest-quality leads ✓ Highest lead-to-lease conversion rate ✓ Generating the most applications Source: Market Connections Brand Study, Q2 2024 Responses from 645 owners/operators of 18K communities, 1.5M+
Slide 39: Tremendous Opportunity Ahead in the Small to Medium Property Space
Tremendous Opportunity Ahead in the Small to Medium Property Space Annual Universe Clients Subscription Revenue Unit Range TAM ($M) (Properties) (Properties) Revenue Run Penetration Rate ($M) 1-49 22M 18K $66M 1% $6B $7B opportunity 50-99 71K 12K $119M 17% $1B 100+ 107K 45K $880M 42% $2B Grand Total
Slide 40: 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 annual revenue run rate 13X 4 million average monthly unique 43 million averag
Slide 41: A global leader in commercial real estate information, analytics, and data-driven news
A global leader in commercial real estate information, analytics, and data-driven news
Slide 42: CoStar by the Numbers
CoStar by the Numbers $1B 240K Revenue Run Rate Subscribers 950K 7M Commercial Listings Properties 15M 5M Lease Sale Transactions Transactions * Revenue Run Rate based on Q3 24 annualized. All other data from CoStar internal database as of September 2024.
Slide 43: CoStar Product Investments Expand the Market Size
CoStar Product Investments Expand the Market Size, Resulting in Long-Term Double-Digit Growth $4B U.S. MARKET SIZE 12% Revenue Growth Rate $250 Tenants Ten Year CAGR Hospitality $200 Lenders Quarterly Revenue Owners / (in millions) Investors $150 Brokers / Appraisers $100 $50 $0 Total addressable ma
Slide 44: 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 60 Journalists Across Data feeds and third-party data 1 Bas
Slide 45: The #1 global commercial real estate marketplace
The #1 global commercial real estate marketplace
Slide 46: LoopNet by the Numbers
LoopNet by the Numbers $284M 14% 5 Year Revenue Revenue Run Rate CAGR 13M 390K Average Monthly CRE Brokers & Unique Owners Advertising Visitors Worldwide 11X 98% #1 Google Fortune 1000 keywords than Companies closest competitor Active on Site *All data as of September 2024. Run Rate based on Q324 an
Slide 47: Commanding Share of Traffic vs. Marketplace Competitors
Commanding Share of Traffic vs. Marketplace Competitors LoopNet Network vs. Competitors LoopNet Network crexi propertyshark commercialsearch commercialcafe officespace Instantoffices 68x vts Unique Visitors of the Avg. CRE Marketplace Competitor commercialexchange buildout officefinder 6x propertyca
Slide 48: LoopNet Revenue Up 5x Since Acquisition
LoopNet Revenue Up 5x Since Acquisition $70 Domestic International Early Stages of a Massive Global Opportunity $60 $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 49: 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 50: Appendix
Ot CoStar Group™ Appendix
Slide 51: 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 52: 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.
Slide 53: 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.
Slide 54: 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