stockrowWhat it does
CoStar Group provides online real estate marketplaces, property information, analytics and 3D digital twin technology. It serves people and businesses involved in commercial and residential property: professionals use data and software to research assets, leases, tenants, sales and markets, while consumers search for homes, rentals, land and businesses for sale. [item1]
The Commercial Real Estate segment centers on the CoStar subscription platform, which covers property inventory, available space, sales comparables, tenants, owners, market conditions and forecasts. It also includes LoopNet advertising for commercial property listings; STR hotel benchmarking; Debt Solutions for lenders; lease-management software; Matterport 3D digital twins; BizBuySell; and Ten-X commercial-property auctions. [item1]
The Residential Real Estate segment aggregates renter and homebuyer demand and sells advertising, leads and listing promotion to agents, owners, landlords and property managers. Its principal U.S. brands are Apartments.com, Homes.com and Land.com, while Domain and OnTheMarket serve Australia and the U.K. [item1]
Andrew C. Florance is the founder and chief executive officer. CoStar Group had 8,000 employees in FY2025. [leadership] [employees.fy2025]
How it makes money
CoStar operates two reportable segments: Commercial Real Estate and Residential Real Estate. Most revenue comes from subscription-based services sold under license agreements that typically renew automatically; most agreements run for at least one year. The company generally charges a fixed monthly fee rather than charging by usage or paid clicks. [item7]
Commercial customers subscribe to CoStar intelligence, STR benchmarking, Debt Solutions, lease-management software and Matterport hosting, or pay for LoopNet advertising packages. Matterport also earns transaction-based revenue from spatial-data capture, cameras and related devices. BizBuySell sellers pay to list businesses, while Ten-X earns auction fees calculated as a percentage of a successfully closed commercial-property sale. [item1]
Residential marketplaces monetize the demand generated by renters and homebuyers. Apartments.com and Land.com sell advertising subscriptions. Homes.com sells agent memberships, listing promotion and, from the planned third-quarter 2026 rollout, a Platinum Marketing Tier with enhanced search placement, social marketing, photography and Matterport tours. Domain primarily sells premium listings on a transactional basis, and OnTheMarket hosts agent listings on subscription. [item1] Management said on the call that Platinum ads are expected to be priced at multiples of standard listings. [fact_b69e3c31]
Pricing can reflect sites, users, client size and focus, geography, properties analyzed, subscribed services, hosted digital twins, advertised properties, and a listing’s search-result placement. In FY2025, subscription services generated approximately 93% of total revenue; annualized net new bookings were approximately $308 million. [item7]
Latest reported quarter: Q2 2026 revenue was $925 million, including $481 million from Commercial Real Estate and $444 million from Residential Real Estate. [call_prepared]
Customers and how it sells
CoStar’s customer base spans property owners, agents, developers, sales and leasing brokers, property managers, hospitality owners, lenders, appraisers, pension-fund managers, insurers, investors, asset managers, retailers and government agencies. It states that its revenue is highly diversified and that it is not dependent on one customer or a small group of customers. [item1]
Its commercial products are sold through field offices and inside-sales teams, with field sales staff also handling customer service, training and relationship building. Sales teams operate across the U.S., Canada, the U.K., Spain, France, Germany and Australia. [item1]
The company’s marketplaces operate in the U.S., Australia, Europe, Canada and Asia-Pacific. Domain is its Australian marketplace and OnTheMarket is its U.K. marketplace. [item1] Management said on the call that the CoStar platform had 327,000 subscribers at the end of Q2 2026, while Homes.com had more than 36,000 agent subscribers. [fact_a4f4e122] [fact_2cc9e426] Management also said Debt Solutions had 300 lender clients contributing information on more than 100,000 active loans on an anonymized and aggregated basis. [fact_92365f74]
Suppliers and costs
CoStar builds much of its property database through its own researchers, field inspections, public-record review, news monitoring, third-party feeds and user-entered content. It licenses a small portion of data and images from public-record providers and third-party sources under generally non-exclusive agreements. [item1]
Its operating cost base includes research, sales and marketing, technology and product development, customer support, hosting, facilities and corporate functions. Matterport adds hardware sales, capture services and product web-hosting costs. Acquisitions have also added personnel, hosting, occupancy and integration costs. [item7]
The company employed 8,000 people in FY2025. [employees.fy2025] As of December 31, 2025, it had purchase obligations of $205 million, primarily for web hosting, sponsorship agreements, third-party data or listings and software subscriptions. [item7]
- Revenue$3.2B
- Cost of revenue−$686.0M
- Research and development−$406.0M
- Selling, general and administrative−$2.1B
- Other operating costs−$118.0M
- Operating income−$72.0M
Competitive position
CoStar competes across online real estate marketplaces, listing services, information and analytics, hospitality benchmarks, marketing services, lease-management software and administrative software. Competitive factors include data quality and timeliness, lead quality, geographic coverage, functionality, brand, price, authenticated visitor scale, capital resources and AI capabilities. [item1]
Zillow competes with Apartments.com in rental marketplaces. Management said on the call that CoStar had sued Zillow over the alleged unauthorized use of CoStar-owned apartment photographs in Zillow’s rental marketplace. [fact_68687458] CoStar also faces competition in multifamily advertising; management said on the call that a competitor was seeking share through low pricing, without naming that competitor. [call_qa]
Our reading: CoStar’s proprietary database and research operation are a meaningful moat because the same building-level information supports its information, analytics and marketplace products, and is collected through both internal research and data feeds. [item1]
Our reading: Recurring subscriptions and a broad set of commercial and residential products support cross-selling, but this does not prevent competitors from challenging pricing or audience acquisition in individual marketplaces. [item1] [call_qa]
Our reading: Matterport’s 3D technology, its patent portfolio and technical protections add differentiation, although the company does not consider itself materially dependent on any one patent or portfolio. [item1]
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Zillow | U.S. rental marketplace and apartment advertising | High |
Growth opportunities
CoStar’s growth plans include expanding the depth and coverage of its databases, adding product modules, cross-selling services and using AI in research, product development and customer-facing search. Its 2026 priorities include residential-platform integration, the deployment of Homes.com in Australia and the U.K. through Domain and OnTheMarket, expanded rental marketing across Apartments.com and Homes.com, and new products for agents and brokers. [item7]
Management said on the call that CoStar launched Rent Benchmark using 4 million AI-abstracted actual leases and lease documents, public-record search in the U.K., and AI-powered lease abstraction in CoStar Real Estate Manager. [fact_8673cdf1] [fact_d3e98d8a] [fact_bf1d761f] It also said CoStar launched in France and plans to migrate and upgrade roughly 1,100 Business Immo subscribers over two years. [fact_ef529b6b]
Management said on the call that it remains focused on launching CoStar in Australia in the second half of 2026, while LoopNet’s Australian release has been shifted to late 2027 to prioritize residential integration. [fact_4f9fbe4d] [fact_88cbda92] The company expects to close the Zonda acquisition in the second half of 2026, subject to the ongoing regulatory approval process; the acquisition was not included in 2026 guidance. [fact_3c66f07e] [fact_7244cebd]
For full-year 2026, the company expects revenue of $3.715 to $3.755 billion and adjusted EBITDA of $780 to $820 million. [call_prepared]
- $1.9BFY2021
- $2.2BFY2022
- $2.5BFY2023
- $2.7BFY2024
- $3.2BFY2025
- $3.8BFY2026 guidance
Structural risks
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CoStar may be unable to attract and retain clients for its information, analytics and marketplace services. Subscriber adoption, retention, client budgets, pricing, new-product execution and sales-force development can affect revenue and financial position. [item1a]
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The business depends on accurate, comprehensive and reliable data. A failure to obtain or maintain data quality, or relationships with third-party listing providers, could reduce demand, disrupt data feeds and impair customer retention. [item1a]
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Competition can intensify as technology, customer preferences and AI services evolve. Residential competitors may have greater name recognition, resources or adoption of AI services. [item1] [item1a]
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Matterport and Domain integration may not deliver anticipated benefits. Acquisitions can interrupt operations, divert management attention and add integration, impairment or third-party-claim costs. [item1a]
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System or service unavailability, unauthorized disclosures or payments, cyber incidents, and privacy, security, AI and data-law compliance failures could cause legal, regulatory, remediation and reputational costs and reduce customer confidence. [item1a]
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International operations and indebtedness add risk. Foreign operations can reduce profitability, while significant indebtedness could reduce financial flexibility and adversely affect the business, financial condition and results. [item1a]
Bottom line
Our reading
Our reading: CoStar is a property-information and marketplace business built around a shared database, subscriptions and advertising products serving commercial and residential real estate. Its commercial data, research and workflow services provide recurring revenue, while residential marketplaces depend more directly on traffic, lead quality, advertiser spending and competitive conditions. [item1] [item7]
Our reading: The company is investing in AI features, international platform expansion and acquired businesses, while integration, data quality, marketplace competition and client retention remain central operating exposures. [item1] [item1a] [call_prepared]