CoStar Group, Inc. (NASDAQ:CSGP), the leading provider of
commercial real estate information, analytics, and online
marketplaces, announced today that revenue for the quarter ended
March 31, 2021, was $458 million, an increase of 17% over revenue
of $392 million for the first quarter of 2020.
Net income for the first quarter of 2021 was $74 million, or
$1.88 per diluted share. Non-GAAP net income for the first quarter
of 2021 (which excludes amortization of acquired intangible assets,
stock-based compensation, and other items as described below) was
$108 million or $2.75 per diluted share, an increase of $18 million
or 20% versus the first quarter of 2020.
EBITDA for the first quarter of 2021 was $136 million, an
increase of 35% versus EBITDA of $100 million for the first quarter
of 2020. Adjusted EBITDA (which excludes stock-based compensation,
acquisition and integration related costs and other items as
described below) for the first quarter of 2021 was $160 million, an
increase of 29% compared to adjusted EBITDA of $124 million for the
first quarter of 2020.
“Our business delivered a strong start to 2021, with revenue and
profit ahead of forecast and record numbers of visitors to our
platforms in the first quarter of the year,” said Andrew C.
Florance, Founder and Chief Executive Officer of CoStar Group. “Our
sales team generated $52 million in company-wide net new bookings
in the first quarter of 2021, an increase of 10% year-over-year.
CoStar Suite net new bookings in the first quarter increased 77%
year-over-year, with both net new sales and renewal rates returning
to the levels we achieved in 2019, prior to the pandemic. We expect
this positive momentum to continue during the remainder of 2021,
supported by the recent addition of both Commercial Mortgage-Backed
Securities data and STR hospitality data in CoStar Suite, and the
launch of the new CoStar international version earlier this
month.”
“Our marketplace businesses, along with Ten-X, also delivered
very strong year-over-year results in the first quarter,” continued
Florance. “Apartments.com revenue increased 21%, network visitors
were up 35%, and quality leads to our customers grew 63%. LoopNet
and Ten-X continued to gain traction as our new marketing campaigns
increased awareness and site traffic. Unique visitors to our
LoopNet network increased 34% and LoopNet Signature Ads revenue
grew 50% in the first quarter of 2021 compared to the first quarter
of 2020. Ten-X’s unique monthly visitors rose 45% sequentially in
what is typically a seasonally slow quarter, and the average number
of bidders per auction grew 68% year-over-year.”
“We were excited to have the Homesnap team join us at the end of
2020,” noted Florance. “The business performed well in the first
quarter of 2021, growing pro forma revenue by over 40%
year-over-year as paid subscribers more than doubled and
subscription revenue grew by 68%.”
Year 2020-2021 Quarterly
Results - Unaudited
(in millions, except per share
data)
2020
2021
Q1
Q2
Q3
Q4
Q1
Revenues
$392
$397
$426
$444
$458
Net income
73
60
58
36
74
Net income per share - diluted
1.98
1.60
1.48
0.91
1.88
Weighted average outstanding shares -
diluted
36.8
37.7
39.4
39.4
39.4
EBITDA
100
109
108
88
136
Adjusted EBITDA
124
129
134
167
160
Non-GAAP net income
90
88
89
112
108
Non-GAAP net income per share -
diluted
2.44
2.34
2.26
2.85
2.75
As of March 31, 2021, the Company had approximately $3.7 billion
in cash, cash equivalents and long-term investments and outstanding
debt of approximately $987 million.
2021 Outlook The Company is raising its revenue guidance
for the full year of 2021 to a new range of $1.930 billion to
$1.945 billion, representing growth of approximately 17%
year-over-year at the midpoint of the range. Revenue for the second
quarter of 2021 is expected to be in the range of $465 million to
$470 million, representing revenue growth of approximately 18% over
the second quarter of 2020 at the midpoint of the range.
The Company is raising its adjusted EBITDA guidance for the full
year of 2021 to a new range of $645 million to $655 million,
representing growth of approximately 18% year-over-year at the
midpoint of the range. For the second quarter of 2021, the Company
expects adjusted EBITDA in a range of $130 million to $135
million.
The Company is raising its non-GAAP net income per diluted share
guidance for full-year 2021 from a range of $10.83 to $11.03 to a
new range of $11.20 to $11.40 per share, based on 39.5 million
shares. The new range represents an increase of $0.37 at the
midpoint versus the previously provided outlook. For the second
quarter of 2021, we expect non-GAAP net income per diluted share in
a range of $2.22 to $2.32 based on 39.4 million shares. These
ranges include an estimated non-GAAP tax rate of 25% for the full
year and the second quarter of 2021. The 2021 outlook does not
include estimates of results for the pending Homes.com
acquisition.
The preceding forward-looking statements reflect CoStar Group’s
expectations as of April 27, 2021, including forward-looking
non-GAAP financial measures on a consolidated basis, based on
current estimates, expectations, observations, and trends. Given
the risk factors, rapidly evolving economic environment, and
uncertainties and assumptions discussed in this release and in our
quarterly reports on Form 10-Q and annual reports on Form 10-K,
including uncertainties as a result of the COVID-19 pandemic and
responses to it by, and the impact on, global economies and the
commercial real estate industry, actual results may differ
materially. Other than in publicly available statements, the
Company does not intend to update its forward-looking statements
until its next quarterly results announcement.
Reconciliation of EBITDA, adjusted EBITDA, non-GAAP net income
and non-GAAP net income per diluted share to their GAAP basis
results are shown in detail below, along with definitions for those
terms. A reconciliation of forward-looking non-GAAP guidance to the
most directly comparable GAAP measure, net income, can be found
within the tables included in this release.
Non-GAAP Financial 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 Company’s financial
condition and results of operations, please refer to the Company’s
latest periodic report.
EBITDA is a non-GAAP financial measure that represents GAAP net
income attributable to CoStar Group before interest (expense)
income and other (expense) income, loss on debt extinguishment,
income taxes, depreciation and amortization.
Adjusted EBITDA is a non-GAAP financial measure that represents
EBITDA before stock-based compensation expense, acquisition- and
integration-related costs, restructuring costs, and settlements and
impairments incurred outside the Company’s normal course of
business.
Non-GAAP net income is a non-GAAP financial measure determined
by adjusting GAAP net income attributable to CoStar Group for
stock-based compensation expense, acquisition- and
integration-related costs, restructuring costs, settlement and
impairment costs incurred outside the Company's normal course of
business and loss on debt extinguishment, as well as amortization
of acquired intangible assets and other related costs, and then
subtracting an assumed provision for income taxes. In 2021, the
Company is assuming a 25% tax rate in order to approximate our
statutory corporate tax rate excluding the impact of discrete
items.
Non-GAAP net income per diluted share is a non-GAAP financial
measure that represents non-GAAP net income divided by the number
of diluted shares outstanding for the period used in the
calculation of GAAP net income per diluted share. For periods with
GAAP net losses and non-GAAP net income, the weighted average
outstanding shares used to calculate non-GAAP net income per share
includes potentially dilutive securities that were excluded from
the calculation of GAAP net income per share as the effect was
anti-dilutive.
Earnings Conference Call Management will conduct a
conference call to discuss first quarter 2021 results and the
Company’s outlook at 5:00 PM EDT on Tuesday, April 27, 2021. A live
audio webcast of the conference will be available in listen-only
mode through the Investors section of the CoStar Group website:
https://investors.costargroup.com. A replay of the webcast audio
will also be available in the Investors section of our website for
a period of time following the call.
CoStar Group, Inc.
Condensed Consolidated
Statements of Operations - Unaudited
(in thousands, except per share
data)
Three Months Ended March 31,
2021
2020
Revenues
$
457,697
$
391,847
Cost of revenues
88,748
78,909
Gross profit
368,949
312,938
Operating expenses:
Selling and marketing (excluding customer
base amortization)
138,687
125,107
Software development
46,784
41,610
General and administrative
63,850
58,873
Customer base amortization
18,419
11,484
267,740
237,074
Income from operations
101,209
75,864
Interest (expense) income
(7,878
)
1,651
Other (expense) income
(50
)
841
Income before income taxes
93,281
78,356
Income tax expense
19,069
5,563
Net income
$
74,212
$
72,793
Net income per share - basic
$
1.90
$
2.00
Net income per share - diluted
$
1.88
$
1.98
Weighted-average outstanding shares -
basic
39,158
36,471
Weighted-average outstanding shares -
diluted
39,371
36,776
CoStar Group, Inc.
Reconciliation of Non-GAAP
Financial Measures - Unaudited
(in thousands, except per
share data)
Reconciliation of Net Income
to Non-GAAP Net Income
Three Months Ended March 31,
2021
2020
Net income
$
74,212
$
72,793
Income tax expense
19,069
5,563
Income before income taxes
93,281
78,356
Amortization of acquired intangible
assets
25,827
17,489
Stock-based compensation expense
15,545
15,180
Acquisition and integration related
costs
8,462
8,713
Other expense
1,071
—
Non-GAAP income before income taxes
144,186
119,738
Assumed rate for income tax expense *
25
%
25
%
Assumed provision for income tax
expense
(36,047
)
(29,935
)
Non-GAAP net income
$
108,139
$
89,803
Net income per share - diluted
$
1.88
$
1.98
Non-GAAP net income per share -
diluted
$
2.75
$
2.44
Weighted average outstanding shares -
basic
39,158
36,471
Weighted average outstanding shares -
diluted
39,371
36,776
* A 25% tax rate is assumed for 2021 and
2020, which approximates our statutory federal and state corporate
tax rate
Reconciliation of Net Income
to EBITDA and Adjusted EBITDA
Three Months Ended March 31,
2021
2020
Net income
$
74,212
$
72,793
Amortization of acquired intangible assets
in cost of revenues
7,408
6,005
Amortization of acquired intangible assets
in operating expenses
18,419
11,484
Depreciation and other amortization
8,500
6,767
Interest expense (income)
7,878
(1,651
)
Other expense (income)
50
(841
)
Income tax expense
19,069
5,563
EBITDA
$
135,536
$
100,120
Stock-based compensation expense
15,545
15,180
Acquisition and integration related
costs
8,462
8,713
Adjusted EBITDA
$
159,543
$
124,013
CoStar Group, Inc.
Condensed Consolidated Balance
Sheets - Unaudited
(in thousands)
March 31, 2021
December 31, 2020
ASSETS
Current assets:
Cash, cash equivalents and restricted
cash
$
3,690,296
$
3,755,912
Accounts receivable
124,361
119,059
Less: Allowance for credit losses
(14,563
)
(15,110
)
Accounts receivable, net
109,798
103,949
Prepaid expenses and other current
assets
22,233
28,651
Total current assets
3,822,327
3,888,512
Deferred income taxes, net
3,633
4,983
Property and equipment, net
239,480
126,325
Lease right-of-use assets
90,949
108,740
Goodwill
2,210,976
2,235,999
Intangible assets, net
450,341
426,745
Deferred commission costs, net
93,056
93,274
Deposits and other assets
16,223
15,856
Income tax receivable
14,986
14,986
Total assets
$
6,941,971
$
6,915,420
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
16,870
$
15,732
Accrued wages and commissions
68,590
80,998
Accrued expenses
58,290
110,305
Income taxes payable
28,757
16,316
Lease liabilities
27,932
32,648
Deferred revenue
89,696
74,851
Total current liabilities
290,135
330,850
Long-term debt, net
987,018
986,715
Deferred income taxes, net
86,081
72,991
Income taxes payable
25,387
25,282
Lease and other long-term liabilities
106,425
124,223
Total liabilities
$
1,495,046
$
1,540,061
Total stockholders’ equity
5,446,925
5,375,359
Total liabilities and stockholders’
equity
$
6,941,971
$
6,915,420
CoStar Group, Inc.
Condensed Consolidated
Statements of Cash Flows - Unaudited
(in thousands)
Three Months Ended March 31,
2021
2020
Operating activities:
Net income
$
74,212
$
72,793
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
35,410
24,256
Amortization of deferred commissions
costs
15,317
14,747
Amortization of Senior Notes discount and
issuance costs
578
292
Non-cash lease expense
6,483
6,261
Stock-based compensation expense
15,545
15,180
Deferred income taxes, net
5,464
2,825
Credit loss expense
1,820
6,183
Other operating activities, net
(136
)
541
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
(7,609
)
(26,613
)
Income taxes payable
12,556
1,624
Prepaid expenses and other current
assets
(2,823
)
1,838
Deferred commissions
(15,078
)
(16,523
)
Other assets
2,273
1,215
Accounts payable and other liabilities
(63,051
)
15,564
Lease liabilities
(7,788
)
(6,967
)
Deferred revenue
14,680
18,248
Net cash provided by operating
activities
87,853
131,464
Investing activities:
Proceeds from sale and settlement of
investments
—
10,259
Purchase of Richmond assets
(123,259
)
—
Purchases of property and equipment and
other assets
(10,619
)
(7,133
)
Cash paid for acquisitions, net of cash
acquired
(442
)
(432
)
Net cash (used in) provided by investing
activities
(134,320
)
2,694
Financing activities:
Proceeds from long-term debt
—
745,000
Repurchase of restricted stock to satisfy
tax withholding obligations
(27,667
)
(30,144
)
Proceeds from exercise of stock options
and employee stock purchase plan
9,124
10,295
Net cash (used in) provided by financing
activities
(18,543
)
725,151
Effect of foreign currency exchange rates
on cash and cash equivalents
(606
)
(2,117
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(65,616
)
857,192
Cash, cash equivalents and restricted cash
at the beginning of period
3,755,912
1,070,731
Cash, cash equivalents and restricted cash
at the end of period
$
3,690,296
$
1,927,923
CoStar Group, Inc.
Disaggregated Revenues -
Unaudited
(in thousands)
Three Months Ended March 31,
2021
2020
North America
International
Total
North America
International
Total
Information and analytics
CoStar Suite
$
163,554
$
8,630
$
172,184
$
157,335
$
7,621
$
164,956
Information services
27,686
7,010
34,696
25,690
6,692
32,382
Online marketplaces
Multifamily
166,147
—
166,147
137,460
—
137,460
Commercial property and land
84,376
294
84,670
56,962
87
57,049
Total revenues
$
441,763
$
15,934
$
457,697
$
377,447
$
14,400
$
391,847
CoStar Group, Inc.
Results of Segments -
Unaudited
(in thousands)
Three Months Ended March 31,
2021
2020
EBITDA
North America
$
135,858
$
102,413
International
(322
)
(2,293
)
Total EBITDA
$
135,536
$
100,120
CoStar Group, Inc.
Reconciliation of Non-GAAP
Financial Measures with 2020-2021 Quarterly Results -
Unaudited
(in millions, except per share
data)
Reconciliation of Net Income
to Non-GAAP Net Income
2020
2021
Q1
Q2
Q3
Q4
Q1
Net income
$72.8
$60.4
$58.2
$35.8
$74.2
Income tax expense
5.6
16.9
10.7
10.7
19.1
Income before income taxes
78.4
77.3
68.9
46.4
93.3
Amortization of acquired intangible
assets
17.5
21.0
24.9
24.8
25.8
Stock-based compensation expense
15.2
9.5
16.7
12.7
15.5
Acquisition and integration related
costs
8.7
10.0
7.9
65.9
8.5
Other expense
—
—
0.1
—
1.1
Non-GAAP income before income taxes
119.8
117.8
118.9
149.8
144.2
Assumed rate for income tax expense *
25%
25%
25%
25.0%
25%
Assumed provision for income tax
expense
(30.0)
(29.5)
(29.7)
(37.5)
(36.0)
Non-GAAP net income
$89.8
$88.3
$89.2
$112.3
$108.2
Non-GAAP net income per share -
diluted
$2.44
$2.34
$2.26
$2.85
$2.75
Weighted average outstanding shares -
basic
36.5
37.5
39.2
39.1
39.2
Weighted average outstanding shares -
diluted
36.8
37.7
39.4
39.4
39.4
* A 25% tax rate is assumed for 2021 and
2020, which approximates our statutory federal and state corporate
tax rate.
Reconciliation of Net Income
to EBITDA and Adjusted EBITDA
2020
2021
Q1
Q2
Q3
Q4
Q1
Net income
$72.8
$60.4
$58.2
$35.8
$74.2
Amortization of acquired intangible
assets
17.5
21.0
24.9
24.8
25.8
Depreciation and other amortization
6.8
7.0
6.8
8.2
8.5
Interest (income) expense
(1.7)
3.6
7.5
7.9
7.9
Other (income) expense
(0.8)
0.4
0.3
0.9
0.1
Income tax expense
5.6
16.9
10.7
10.7
19.1
EBITDA
$100.2
$109.3
$108.4
$88.3
$135.6
Stock-based compensation expense
15.1
9.5
16.7
12.7
15.5
Acquisition and integration related
costs
8.7
10.0
7.9
65.9
8.5
Restructuring and related costs
—
—
0.4
—
—
Adjusted EBITDA
$124.0
$128.8
$133.4
$166.9
$159.6
CoStar Group, Inc.
Reconciliation of
Forward-Looking Guidance - Unaudited
(in thousands, except per share
data)
Reconciliation of
Forward-Looking Guidance, Net Income to Non-GAAP Net Income
Guidance Range
Guidance Range
For the Three Months
For the Year Ending
Ending June 30, 2021
December 31, 2021
Low
High
Low
High
Net income
$
54,000
$
59,000
$
308,000
$
319,000
Income tax expense
19,000
21,000
101,000
104,000
Income before income taxes
73,000
80,000
409,000
423,000
Amortization of acquired intangible
assets
24,000
24,000
97,000
97,000
Stock-based compensation expense
17,000
16,000
68,000
66,000
Acquisition and integration related
costs
2,000
1,000
12,000
10,000
Other expense
1,000
1,000
4,000
4,000
Non-GAAP income before income taxes
117,000
122,000
590,000
600,000
Assumed rate for income tax expense *
25
%
25
%
25
%
25
%
Assumed provision for income tax
expense
(29,400
)
(30,500
)
(147,700
)
(149,700
)
Non-GAAP net income
$
87,600
$
91,500
$
442,300
$
450,300
Net income per share - diluted
$
1.37
$
1.50
$
7.80
$
8.08
Non-GAAP net income per share -
diluted
$
2.22
$
2.32
$
11.20
$
11.40
Weighted average outstanding shares -
diluted
39,400
39,400
39,500
39,500
* A 25% tax rate is assumed, which
approximates our statutory federal and state corporate tax
rate.
Reconciliation of
Forward-Looking Guidance, Net Income to Adjusted EBITDA
Guidance Range
Guidance Range
For the Three Months
For the Year Ending
Ending June 30, 2021
December 31, 2021
Low
High
Low
High
Net income
$
54,000
$
59,000
$
308,000
$
319,000
Amortization of acquired intangible
assets
24,000
24,000
97,000
97,000
Depreciation and other amortization
7,000
7,000
30,000
30,000
Interest expense
8,000
8,000
32,000
32,000
Other (income)
(1,000
)
(1,000
)
(3,000
)
(3,000
)
Income tax expense
19,000
21,000
101,000
104,000
Stock-based compensation expense
17,000
16,000
68,000
66,000
Acquisition and integration related
costs
2,000
1,000
12,000
10,000
Adjusted EBITDA
$
130,000
$
135,000
$
645,000
$
655,000
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ:CSGP) is the leading provider of
commercial real estate information, analytics and online
marketplaces. Founded in 1987, CoStar conducts expansive, ongoing
research to produce and maintain the largest and most comprehensive
database of commercial real estate information. Our suite of online
services enables clients to analyze, interpret and gain unmatched
insight on commercial property values, market conditions and
current availabilities. STR provides premium data benchmarking,
analytics and marketplace insights for the global hospitality
sector. Ten-X provides a leading platform for conducting commercial
real estate online auctions and negotiated bids. LoopNet is the
most heavily trafficked commercial real estate marketplace online.
Realla is the UK’s most comprehensive commercial property digital
marketplace. Apartments.com, ApartmentFinder.com, ForRent.com,
ApartmentHomeLiving.com, Westside Rentals, AFTER55.com,
CorporateHousing.com, ForRentUniversity.com and Apartamentos.com
form the premier online apartment resource for renters seeking
great apartment homes and provide property managers and owners a
proven platform for marketing their properties. Homesnap is an
industry-leading online and mobile software platform that provides
user-friendly applications to optimize residential real estate
agent workflow and reinforce the agent-client relationship. CoStar
Group’s websites attract tens of millions of unique monthly
visitors. Headquartered in Washington, DC, CoStar maintains offices
throughout the U.S. and in Europe, Canada and Asia with a staff of
approximately 4,700 worldwide, including the industry’s largest
professional research organization. For more information, visit
www.costargroup.com.
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, expectations, beliefs and intentions and other
statements including words such as “hope,” “anticipate,” “may,”
“believe,” “expect,” “intend,” “will,” “should,” “plan,”
“estimate,” “predict,” “continue” and “potential” or the negative
of these terms or other comparable terminology. Such statements are
based upon the current beliefs and expectations of management of
CoStar Group and are subject to many risks and uncertainties.
Actual results may differ materially from the results anticipated
in the forward-looking statements and the assumptions and estimates
used as a basis for the forward-looking statements. The following
factors, among others, could cause or contribute to such
differences: the risk that the trends stated or implied by this
release or in the earnings conference call cannot or will not be
sustained at the current pace or may increase or decrease,
including trends related to revenue, net income, non-GAAP net
income, EBITDA, adjusted EBITDA, site traffic and visitors, sales,
renewal rates, leads and the number of Ten-X bidders; the risk that
the Company is unable to sustain current revenue, earnings, and net
new sales growth rates, as well as renewal rates during the
remainder of 2021 or increase them; the risk that the Company’s
investment plans change or that those investments do not produce
the expected results, including accelerated growth; the risk that
revenues for the second quarter and full year 2021 will not be as
stated in this press release; the risk that net income for the
second quarter and full year 2021 will not be as stated in this
press release; the risk that adjusted EBITDA for the second quarter
and full year 2021 will not be as stated in this press release; the
risk that non-GAAP net income and non-GAAP net income per diluted
share for the second quarter and full year 2021 will not be as
stated in this press release; the risk that the tax rate estimates
stated in this press release may change; the possibility that the
acquisition of Homes.com does not close when expected or at all;
uncertainty surrounding the impact of the COVID-19 pandemic,
including volatility in the international and U.S. economy and the
commercial real estate industry, worker absenteeism or decreased
productivity, quarantines or other travel or health-related
restrictions; the length and severity of the COVID-19 pandemic; the
pace of recovery following the COVID-19 pandemic; and government
and private actions taken to control the spread of COVID-19. More
information about potential factors that could cause results to
differ materially from those anticipated in the forward-looking
statements include, but are not limited to, those stated in CoStar
Group’s filings from time to time with the Securities and Exchange
Commission, including in CoStar Group’s Annual Report on Form 10-K
for the year ended December 31, 2020, which is filed with the SEC,
including in the “Risk Factors” section of that filing, as well as
CoStar Group’s other filings with the SEC (including Current
Reports on Form 8-K) available at the SEC’s website (www.sec.gov).
All forward-looking statements are based on information available
to CoStar Group on the date hereof, and CoStar Group assumes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210427006114/en/
Investor Relations: Bill Warmington Vice President CoStar
Group Investor Relations (202) 346-5661 wwarmington@costar.com
News Media: Matthew Blocher Vice President CoStar Group
Corporate Marketing & Communications (202) 346-6775
mblocher@costargroup.com
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