Costar Group, Inc. · NASDAQ:CSGP
Costar — Q1 2024 Earnings Presentation
72 slides from Costar's earnings presentation, Apr 23, 2024
Slide 1: CoStar Group First Quarter 2024 Investor Presentation
Ot} CoStar Group” First Quarter 2024 Investor Presentation
Slide 2: Legal Disclaimer
Legal Disclaimer orn inomaton nis rvetaton nes oercoking etm cSt Grip" ore “Company adirestabe meets, caterers abot managements plans, roth salen, god and objacies or tee “These roetanies that could cause acta resus oeier material. ‘everve, EBITOA, Adjusted Factors contibute to such f EBmTOA, per sh
Slide 3: First Quarter 2024 Highlights
Ot} CoStar Group” 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 annuali
Slide 5: Traffic Growth Accelerating 93% Year over Year in Q1 2024
Traffic Growth Accelerating 93% Year over Year in Q1 2024 190 170 EE CoStar LF LoopNet 22 Apartments.com 150 Py PN MILLION EHomescom —— ¥ Landcom: izBuySell we @ithemtarket_ —_ BUREAUXLOCAUX @BELBEX.com Unique Visitors (in 0 zis 2014 0ts=2018.==2017=saote === 2000 «=a te 2003 es cesercioep
Slide 6: Traffic to our Residential Network Reaches 156M Unique Visitors in March
— Traffic to our Residential Network Reaches 156M Unique Visitors in March - 12g Unique Visitors Average Unique Visitors ov & PP PP PP P PP LP KP Ff SF SK SK ST SF SK HK LM
Slide 7: Matterport Acquisition Announced April 22, 2024
fiMatterport’ Acquisition Announced April 224, 2024 and attficial intelligence forthe real estate industry : acquire al port, Inc. for $2.75 per share in cash and $2.75 pershare in CoStar Group ‘commonstock Estimated enterprise value of $1.6 billion Matterport library of spatial property data includ
Slide 8: First Quarter 2024 Results
First Quarter 2024 Results ROTSTO 12% ee growth Be income $0.02 rene share Adjusted EBITDA $12 million Net new bookings $86 million $42 million pirate cul $0.10 per diluted share 43 CoStarGroup
Slide 9: 2024 Outlook
2024 Outlook Second Quarter Full Year —— $674 milion to $679 million $2.76 bilion to $2.77 billion 11% to 12% year-over-year growth 12% to13% year-over-year of $1 million to $5 nm n to $112 million Wetincc mie) $0.00 to $0.01 per diluted share eerie $0.27 per diluted share 7 $5 million to $10 millio
Slide 10: Company Overview
Ot} 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. #3 CoStarGroup™
Slide 12: CoStar Group is the Global Leader in Digitizing Real Estate
CoStar Group is the Global Leader in Digitizing Real Estate 2 billion+ $5 billion+ ~6,200 ers ofl est aoa ets inexten invserh ee soarbales STANDARD ane are ia BEBE | &POOR’S 500 100s y E = © Forbes , ‘The Was Nos bs watettheen Innovative Companies ered 74 14 ~$35 billion $5 billion _ coutios tart ca
Slide 13: Years of Growth and Innovation
38 Years of Growth and Innovation @3 CoStar- Ot} LoopNet~ Dt] Apartments.com: Pod it) Homes.com Grtmortarket BS emer 3 STR 3 CoStar il | 2 Apartments.com: wel L 2 = 2 LoopNet be - : #25 BizBuySell 5 TenX S&P 500° 3 Landsof America ®homesnap { costarGroup
Slide 14: A Global Leader in the Digital Transformation of 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 cor n: Massive proprietary dataset built over $8 years wih> $6 bilion inested in
Slide 15: ~$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 16: 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 17: Consecutive Quarters of Double-Digit Revenue Growth
52 Consecutive Quarters of Double-Digit Revenue Growth Regardless of Commercial Property Transaction Volumes High Inflation 700 Quarterly Revenue Transaction Volumes 2022-2024: +12% Growth Pandemic 600 2020-2021: +18% Growth 260 • 96% subscription revenue • 81% annual contracts 500 210 • Resilient t
Slide 18: 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 Information Mult
Slide 19: 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% *Rev enue by client segment f rom December 2023 and rev enue by client extrapolated f rom March 2024 internal
Slide 20: Successful Acquisition and Integration Track Record
Successful Acquisition and Integration Track Record 2024 REVENUE COMPOSITION Acquired 24% Organic Millions 76% Organic Revenue Acquired Revenue at the time of acquisition
Slide 21: High Growth, High Margin Subscription Business Model
High Growth, High Margin Subscription Business Model 9 23% Revenue CAGR since IPO 24 years ago Double-Digit Revenue Growth 9 CoStar and Apartments.com reached $1 billion in annual run rate revenue 9 Apartments.com revenue growth of 20%+ for five consecutive quarters 9 96% subscription revenue with 8
Slide 22: The fastest growing U.S. residential marketplace
The fastest growing U.S. residential marketplace
Slide 23: Our Vision: Establish Homes.com as the #1 residential marketplace
Our Vision Establish Homes.com as the #1 residential real estate marketplace
Slide 24: 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 25: 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 26: 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 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) ($1.5)
Slide 28: We've done your home work. 2024 Supercharged
“We’ve done your home work.” 2024 Supercharged
Slide 29: 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 80 Reaching BILLION 90% DOLLARS BILLION invested impressions of households
Slide 30: Homes.com is Everywhere
Homes.com is EVERYWHERE. No other competitors come close to our investment to drive leads to all agents
Slide 31: Homes.com Unaided Brand Awareness up 6x to 24%
Homes.com Unaided Brand Awareness up 6x in 6 Months to 24% UP 6X 24% 4% Sept ‘23 Mar ‘24
Slide 32: 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 15k ?Leads have grown 50% year-over-year
Slide 33: 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 34: Discover your new home
Discover your new home. Helping 100 million renters find their perfect fit.
Slide 35: Apartments.com by the Numbers
Apartments.com by the Numbers $1B 21% Year-over-Year Revenue Run Rate Revenue Growth #1 1M+ Rank in Brand Rental Awareness Availabilities 1B 43M Average Monthly Annual Visits Unique Visitors *All data as of 3/31/24. Revenue Run Rate based on first quarter 2024 annualized. Traffic data from Google An
Slide 36: Apartments.com delivers five straight quarters of 20%+ organic growth
Apartments.com delivers five straight quarters of 20%+ organic growth 25% 24% 23% 23% 21% 20% 20% 15% 10% 5% 0% Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Slide 37: Our Biggest Customer Count Ever
Our Biggest Customer Count Ever! ~73,000 APARTMENT COMMUNITIES now advertise on Apartments.com
Slide 38: Apartments.com Beats Competition on Metrics That Matter
Apartments.com Beats Competition on the Metrics That Matter to Advertisers 2X 2X 3X more time higher more per visit conversion leases Sources: Traffic from Comscore Media Matrix, January—December 2023; Lease data from Rent Dynamics, January—September 2023
Slide 39: Unaided Brand Awareness
Unaided Brand Awareness 51% 53% 52% 51% 49% 44% 40% 37% 36% 36% 35% 34% 34% 34% 33% 32% 31% 30% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Source: Dynata a leading market research sampling provider
Slide 40: Apartments Network Traffic Leads Zillow Eight Consecutive Quarters
Apartments Network Traffic Leads Zillow Eight Consecutive Quarters 50 millions) 45 (in 40 Visitors Unique 35 Monthly 30 25 Average 20 Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Ž Z Ž E Ž Source: Zillow.com from self reported internal UV’s; Apartments.com from Google Analytics
Slide 41: Tremendous Opportunity Ahead in Small to Medium Property Space
Tremendous Opportunity Ahead in the Small to Medium Property Space Annual Universe Clients Subscription Revenue Unit Range TAM ($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 42: Ten Years of Success for Apartments.com
Ten Years of Success for Apartments.com Growth Since Acquisition 2014 2024 Industry Rank 5th place in highly fragmented The leading online rental #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 43: A global leader in commercial real estate information
A global leader in commercial real estate information, analytics, and data-driven news
Slide 44: 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 45: 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 $200 Hospitality Lenders $150 Owners / Revenue Investors millions) Brokers / Appraisers Quarterly (in $100 $50 $0 2005 2006 2007 2008
Slide 46: Unparalleled Research Methodology
Unparalleled Research Methodology 1,000+ 400 Drones 70 Analysts and In-market Economists canvassers 1 1,600 Cessna capturing Researchers aerial insights Automated data 1,200 extraction Software Developers To facilitate the gathering of data 50 Data feeds and Journalists Across third-party data 1 Nor
Slide 47: 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 CoSta
Slide 48: STR Data Includes 81,000+ Hotels Across ~190 Countries
STR Data Includes 81,000+ Hotels Across ~190 Countries
Slide 49: The #1 global commercial real estate marketplace
The #1 global commercial real estate marketplace
Slide 50: 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 51: 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 6x vts Unique Visitors of
Slide 52: LoopNet Revenue Up 5x Since Acquisition
LoopNet Revenue Up 5x Since Acquisition $70 Early Stages of a Massive Domestic International $60 Global Opportunity $50 $5 Billion Millions North American TAM in $40 $15 Billion Global TAM Revenue $30 Quarterly $20 $10 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 53: 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 54: The leading platform for lease accounting and management
The leading platform for lease accounting and management
Slide 55: 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 56: 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 57: The smarter, better, faster way to transact commercial real estate
The SMARTER, BETTER, FASTER way to transact commercial real estate
Slide 58: 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 59: Ten-X Platform Closes Deals 2-3x Faster than Offline
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 Clos ose In Unde er r 100 Da ay ys
Slide 60: Ten-X Revenue Opportunity is >$3 Billion
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 Mi
Slide 61: The largest rural real estate marketplace in the country
The largest rural real estate marketplace in the country
Slide 62: 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 63: Land.com Leads All Competitors in Traffic Share
Land.com Leads All Competitors in Traffic Share 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 ^Ž ^ t DŽ
Slide 64: The largest business-for-sale marketplace in the U.S.
The largest business-for-sale marketplace in the U.S.
Slide 65: 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 66: More Traffic Than All Competitors Combined
More Traffic Than All Competitors Combined BusinessesForSale.com FranchiseDirect 4M 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 from SimilarWeb, March
Slide 67: More Traffic Than All Competitors Combined
More Traffic Than All Competitors Combined 2 na 4M visits per month 17x our largest competitor 22 BieBuysar
Slide 68: 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 69: Reconciliation of Net Income to Non-GAAP Net Income
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 December
Slide 70: Reconciliation of Net Income to Adjusted EBITDA
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 th
Slide 71: 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
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