tapebrief
CSGP · Q4 2025

CSGP · Q1 2026 Earnings

Bullish

CoStar Group

Reported April 28, 2026

30-second summary

Revenue grew 23% YoY to $897M, landing in the middle of the $890-900M guide, while adjusted EBITDA of $132M beat the high end by $17M and non-GAAP EPS of $0.23 blew past the $0.16-0.19 guide by $0.04. Management raised FY26 EPS to $1.32-1.39 (from $1.22-1.33) and adjusted EBITDA to $780-820M (from $740-800M), implying ~21% margin at midpoint vs. the prior 20% — but quietly dropped the $700M buyback commitment from disclosure despite raised earnings, the one print signal that doesn't fit the otherwise clean beat-and-raise narrative. Homes.com AI members hit 35,175 (+205% YoY) with 119% organic traffic growth post-February launch, validating the product pivot Andy framed last quarter as the moat.

Headline numbers

EPS

Q1 FY2026

$0.23

Revenue

Q1 FY2026

$0.90B

+23.0% YoY

Gross margin

Q1 FY2026

78.1%

Free cash flow

Q1 FY2026

$0.10B

Operating margin

Q1 FY2026

0.3%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$0.90B+23.0%$0.90B-0.3%
EPS$0.23—$0.31-25.8%
Gross margin78.1%—78.6%-50bps
Operating margin0.3%—5.4%-510bps
Free cash flow$0.10B———

Guidance

Company raises full-year FY2026 EPS guidance to $1.32–$1.39 (from $1.22–$1.33) and Adjusted EBITDA guidance to $780M–$820M (from $740M–$800M) following strong Q1 beat, driven by Homes.com AI momentum and accelerating customer engagement.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ1 FY2026$0.89B to $0.90B$0.897Bin-line (within guidance range)Beat
Adjusted EPSQ1 FY2026$0.16 to $0.19$0.23+$0.04 above high end of guideBeat
Adjusted EBITDAQ1 FY2026$95M to $115M$132M+$17M above high end of guideBeat

New guidance

MetricPeriodGuideYoY
RevenueQ2 FY2026$0.922B to $0.932B+18–20% YoY
Adjusted EPSQ2 FY2026$0.27 to $0.30—
Adjusted EBITDAQ2 FY2026$160M to $180M—

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Adjusted EPS
FY2026
$1.22 to $1.33$1.32 to $1.39+$0.09 at midpoint (from $1.275 to $1.355)Raised
Adjusted EBITDA
FY2026
$740M to $800M$780M to $820M+$40M at midpoint (from $770M to $800M)Raised
Share Repurchase Plan
FY2026
$700MWithdrawn — no replacement—Withdrawn
Adjusted EBITDA Margin
FY2026
20% at midpoint~21% at midpoint+~1 percentage pointRaised

Reaffirmed unchanged this quarter: Revenue ($3.78B to $3.82B)

Segment KPIs

Q1 FY2026
SegmentQ1 FY2026YoY
Commercial Real Estate$0.472B+15.4%
Residential Real Estate$0.425B+31.6%
Commercial Real Estate Adjusted EBITDA$161 million—
Residential Real Estate Adjusted EBITDA-$29 million—

Other KPIs

Q1 FY2026
SegmentQ1 FY2026
Net New Bookings (Annualized)$67 million
Adjusted EBITDA$132 million
Adjusted EBITDA Margin14.7%
Homes.com AI Members35,000
Organic Traffic Growth (Homes.com AI)119%
Average Monthly Unique Visitors131 million

Management tone

Narrative arc: Homes.com unit-economics proof (Q2-25) → Sales-engine throttled (Q3-25) → AI-as-moat (Q4-25) → AI product validation with sales productivity reset (Q1 FY2026).

The Homes.com AI launch went from Q4's promise ("AI-as-moat") to Q1's measurable proof point with specific deployment metrics. Last quarter Andy promised the AI agent would learn user preferences and drive engagement; this quarter the press release leads with "119% increase in organic traffic" and "best-ever time on site, page views, and bounce rates" — and Andy disclosed 4,300 Q1 net member adds, with ending base of 35,175 (+205% YoY). In prepared remarks Andy disclosed the cohort economics on the first 11,400 members: $36,400 incremental commissions vs. $3,400 average annual subscription cost = ~11x ROI, with sub-$50K agents earning $58K more after joining. The cadence of disclosure has shifted from forward-looking ambition to backward-looking validation, which is the highest-confidence posture management has taken on Homes.com since coverage began. Based on those results, Andy announced Homes.com will raise subscription fees for new customers effective May 1, 2026, with measured renewal increases under evaluation.

Sales productivity framing executed a notable acknowledgment-of-cost. In Q3-2025 Andy described sales hiring as "throttled by training capacity"; in Q4 he positioned the salesforce as scaling cleanly into the FY26 ramp; in Q1 prepared remarks Chris disclosed total sales headcount at 2,090 (Homes.com 570, Apartments.com 520, CoStar 475, LoopNet 225), and on Q&A Chris explicitly noted Apartments.com reps reach "twice as productive" by year 5 vs. end of year 1, while Andy added the Homes.com salesforce is largely <1 year tenured. This is the most candid disclosure of the multi-year ramp economics yet — and it's paired with concrete tactical adjustments (adding ~50 field reps in 5-city batches, growing Matterport in batches of 20/quarter). The shift signals management has moved from defending the headcount build to demonstrating a more granular deployment discipline.

Apartments.com tone shifted from "gateway to single-family rentals" (Q4 framing) to a defensive acknowledgment of ARPU pressure. Andy described the Rent.com share gains as "once in a decade" but admitted the won rooftops "skew toward lower-ARPU properties" — meaning the impressive rooftop wins are diluting per-customer revenue. He attributed this to the customer mix carried over from Rent.com's bankruptcy/degradation (smaller unit counts, lower rental rates), which were won organically (not via M&A) rather than through paid acquisition or competitive price cuts. The acknowledgment itself is new and meaningful given Q4's bullish $5B SFR TAM call.

The $700M buyback disappearance is the single tone discontinuity. Q4 disclosed $700M in FY26 buybacks; Q1 makes no mention of share repurchase in current guidance. There is no explanation. Either management is reserving capital for an undisclosed acquisition, or they are recalibrating capital return priorities — neither is bearish, but the silent withdrawal contradicts the otherwise transparent posture management took on capital allocation last quarter.

Risks management surfaced:

Forward-looking statements involve many risks, uncertainties, assumptions, estimates, and other factors that can cause actual results to differ materiallyActual results may differ from expectations based on factors stated in press release and SEC filings

Q&A highlights

Ryan Tomasello · KBW

Was Q1 net new bookings of $67M in line with expectations, and how should investors think about the math between bookings and revenue growth given bookings don't underpin 100% of revenue?

Chris confirmed bookings aligned with expectations given guidance reaffirmation. Explained that ~15% of revenue is non-subscription (higher post-acquisitions), ~40% of $550M revenue growth midpoint comes from acquisitions/non-subscription sources, leaving ~$330M from net new bookings. For 2027-2028, subscription revenue needs ~$1B growth with Homes.com growing significantly faster than other brands. Management committed to delivering adjusted EBITDA targets through 15% revenue CAGR, overachievement with reinvestment, or cost rationalization.

$67M net new bookings in Q1, up 20% YoY~15% of revenue currently non-subscription~40% of $550M revenue growth from acquisitions/non-subscription~$330M revenue from net new bookings

Alexey Gokulev · JP Morgan

What are you seeing in terms of sales productivity ramp times, quota attainment by cohort, and how does this inform your hiring pace for the rest of 2026?

Andy discussed varying productivity by brand: CoStar showing accelerating productivity per rep with strong broker/tenant sales; Apartments.com needing continued headcount growth to handle larger cancellation volumes; LoopNet needing more field sales given revenue base; Homes.com dealing with very rookie salesforce but seeing good field sales productivity. Chris added that hiring acceleration started ~1 year ago with cohort tracking showing expected productivity evolution, noting Apartments.com reps reach 2x productivity by year 5 vs year 1. Expecting meaningful productivity build in second half of 2026.

Sales headcount at end of March: 2,090 (Homes.com: 570, Apartments.com: 520, CoStar: 475, LoopNet: 225)Apartments.com reps reach 2x productivity by year 5 vs year 1Homes.com salesforce largely has <1 year tenureField salespeople showing higher productivity than centralized sales force

Steven Sheldon · William Blair

What has changed in deployment of incremental sales resources for rest of 2026 and into 2027? Are there areas of strength where you're pushing harder or areas where productivity isn't progressing as expected?

Andy outlined specific tactical deployment: Growing new homes salespeople at measured pace given strong ROI; Adding ~50 field sales reps to Homes.com in batches of 5 cities, prioritizing SEM spend in those markets; Tightening inside sales pitch/service/pricing for Homes.com (noting product currently underpriced); Growing Apartments.com field sales at measurable pace; Growing LoopNet field sales at incremental pace given adequate revenue-to-headcount ratio and asset-based pricing opportunity; Growing Matterport sales in batches of ~20/quarter. Emphasized enjoying focus on sales productivity and feeling good about productivity direction.

~50 additional Homes.com field sales reps being added in 5-city batchesNew homes salespeople showing high productivityField sales consistently outperforms inside salesMatterport sales growing in ~20/quarter batches

Curtis Nagel · Bank of America

How is the strong engagement and member growth data for Homes.com translating into revenue momentum, and would management provide bookings guidance for Q2 to clarify expectations?

Andy emphasized the strong member growth from ~10K (Q1-Q2 2025) to 35K in Q1 2026, and cited strong ROI data (36.4K more commissions at 11x ROI, even stronger for lower-earning agents) as confidence driver for meaningful ARPU increases. Stated these factors support growing productivity with segment. Declined to provide bookings guidance, noting CoStar has never guided bookings and only 2-3 analysts report it. Pointed to 20% YoY bookings growth and historical quarterly variability.

Homes.com member growth: ~10K to 35K over ~12 monthsAgent ROI: $36.4K more commissions vs $3.4K annual cost (11x return)Agents earning <$50K prior year earned $58K more after joining20% YoY bookings growth

Pete Christensen · Citi

Given Apartments.com's strong rooftop growth and share wins from Rent.com, how is pricing/mix shift in lower-priced opportunities impacting overall bookings production?

Andy acknowledged significant rooftop wins from Rent.com bankruptcy/degradation as a 'once in a decade' opportunity that drove sales force focus. Noted these acquisitions skewed toward lower-ARPU rooftops (smaller unit counts, lower rental rates). Stated he's not seeing major shift in advertising levels/depth, attributing ARPU pressure to the composition of won rooftops rather than competitive pricing dynamics. Emphasized these were organic wins, not taken from competitors.

Significant rooftop wins from Rent.com transitionWon rooftops skew toward lower-ARPU propertiesNo major shift in levels/depth advertising observedRooftop ARPU pressured by composition of won customers, not pricing competition

Answers to last quarter's watch list

Q1 FY2026 revenue at or above $900M validating ~22% YoY guide — Revenue landed at $897M, just $3M below the high end and within the guided range. YoY growth came in at 23% — actually above the ~22% midpoint implied by the prior guide. The acceleration narrative holds.
Resolved positively
Q1 adjusted EBITDA margin and visibility into back-half ramp — Q1 adjusted EBITDA of $132M materially beat the $95-115M guide, putting margin at 14.7% — still well below the FY26 21% target. The FY26 EBITDA guide was raised by $30M but management did not provide explicit framing of when the margin step-up arrives; Q2 guide of $160-180M implies ~18% margin, requiring H2 to average ~25% for the full year.
Continue monitoring
Organic vs. inorganic growth disclosure for 2026 — The Q&A bookings-to-revenue breakdown (~40% from acquisitions/non-subscription, ~$330M from net new bookings of the $550M total growth midpoint) is the clearest organic disclosure to date.
Resolved positively
Homes.com agent subscriber adds — Ending base reached 35,175 (+205% YoY), with Andy disclosing 4,300 Q1 net member adds. Management framed the metric as "+205% YoY" consistent with prior holiday-impact caveats.
Continue monitoring
Apartments.com growth disclosure under residential segment — Apartments.com is now bundled inside Residential Real Estate ($425M, +31.6% YoY), and Q&A confirmed the segment is benefiting from Rent.com rooftop wins but with ARPU dilution. Apartments.com standalone revenue of $312M (+10% YoY) was disclosed in prepared remarks.
Resolved positively
$700M buyback execution pace — Resolved positively — $505M repurchased in Q1, $195M remaining for balance of year per CFO.
CRE "headwind to tailwind" durability — Commercial Real Estate revenue grew 15.4% YoY, decelerating from Q4's 20.5%, but with $161M segment adjusted EBITDA the profit engine remains intact. No explicit management commentary on the +30% commercial sales volumes claim from Q4.
Continue monitoring

What to watch into next quarter

Whether Q2 revenue lands above $932M (the high end of $922-932M guide), confirming the ~19% YoY pace — and whether management discloses revised commentary on the FY26 21% EBITDA margin step-up timing

Q2 net new bookings: $67M Q1 base with management deferring on guidance; watch whether Q2 bookings clear $80M (to match seasonal patterns from 2025) or fade given the productivity acknowledgments

Whether the $700M buyback is reinstated, replaced with explicit alternative capital deployment language, or remains silently absent — a third consecutive quarter without share repurchase clarity would force the question on the call

Homes.com AI member adds: whether Q2 net adds accelerate from the Q1 4,300 base given the post-launch traffic surge is the test of whether AI is converting engagement to subscription

Whether the May 1 Homes.com new-customer price increase shows up in Q2 ARPU disclosure, and whether management telegraphs the timing and magnitude of the "measured" renewal increases under evaluation

H2 2026 EBITDA margin trajectory: Q2 guide implies ~18% margin, requiring H2 average of ~25% to hit the FY 21% midpoint — any softness in Q2 makes the FY guide raise look optimistic

Sources

  1. CoStar Group Q1 2026 Earnings Press Release — https://www.sec.gov/Archives/edgar/data/1057352/000105735226000030/q12026earningspressrelea.htm
  2. CoStar Group Q1 2026 Earnings Call Q&A (analyst exchanges as documented)

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