CoStar Group Reports Strong Revenue Growth Amid Homes.com Expansion

CoStar Group, a leading provider of commercial real estate information and analytics, has reported a significant 12% year-over-year revenue increase to $678 million in the second quarter of 2024. This growth comes as the company continues to expand its residential real estate platform, Homes.com, which has shown remarkable progress in recent months.

CEO Andy Florance highlighted the substantial growth of Homes.com, noting that the platform now boasts over two million for-sale and rental listings and has attracted more than 10,000 agent members. The site’s traffic numbers have been equally impressive, with Homes.com reporting 99 million average monthly unique visitors. When considering the larger Homes.com network, which includes Apartments.com and other listing sites, the figure jumps to an impressive 148 million average monthly unique visitors.

However, these traffic numbers have become a point of contention between CoStar and its competitor, Realtor.com. The two companies have been embroiled in a dispute over traffic reporting methods, with CoStar defending its use of Google Analytics to report traffic. Florance likened the accuracy of their metrics to election results, comparing them favorably against what he referred to as polls from third-party data aggregators.

Legal Challenges and Advertising Adjustments

As CoStar continues to grow, it faces legal challenges from its competitors. Realtor.com has filed a trade secrets lawsuit against the company, which Florance dismissed as laughable. Despite this confident stance, CoStar has agreed to modify its advertising campaign for Homes.com following challenges from Realtor.com. The National Advertising Division (NAD) sided with Realtor.com’s objections to Homes.com’s traffic claims, prompting the adjustments.

While revenue growth has been strong, CoStar’s net income saw a significant drop from $101 million in Q2 2023 to $19 million in Q2 2024. This decrease comes amid several executive changes within the company, including the departure of Homes.com President David Mele and the appointment of a new CFO, Chris Lown.

Technological Advancements and Future Outlook

In a move to enhance its technological offerings, CoStar has integrated Matterport virtual tours into Homes.com member listings across 100 cities. This integration follows CoStar’s acquisition of Matterport, a digital property mapping company, in April. The company expects this feature to provide added value to both agents and home seekers on the platform.

Looking ahead, CoStar projects continued growth through the year, with expectations to maintain a midpoint growth of 12%. The company forecasts revenues between $692 million to $697 million in the third quarter. As CoStar navigates the competitive landscape of real estate technology and information services, its focus on innovation and expansion appears to be driving its financial performance and market position.