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CoStar Group Announces Third Quarter Revenue Growth of 16%, Net Income Increases 48% and Company Raises Full Year Revenue and Earnings Guidance

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WASHINGTON, Oct. 25, 2017 (GLOBE NEWSWIRE) -- 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 September 30, 2017 was $248 million, an increase of 16% over revenue of $213 million in the third quarter of 2016. Net income for the third quarter of 2017 increased to $34 million or $1.04 per diluted share compared to $23 million in the third quarter of 2016, an increase of 48%. EBITDA in the third quarter of 2017 was $73 million, an increase of 26% over the third quarter of 2016.

"In the third quarter, we built upon our solid momentum in 2017 driving excellent growth with profitable revenue and strong sales," said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. "Company-wide net new bookings continued to be exceptionally strong at $34 million in the third quarter of 2017, up 31% year-over-year. Our marketplace businesses are performing extremely well as we achieved year-over-year revenue growth in the third quarter of 25% in Multifamily and 21% in Commercial property and land. CoStar Suite revenue accelerated to 14% year-over-year growth. Margins are also expanding, as we achieved 34% adjusted EBITDA margins in the third quarter, up 1,100 basis points from 23% in the second quarter of this year."

Florance continued, "We have successfully completed the integration of our CoStar and LoopNet databases. At that time, we converted LoopNet.com to a pure pay-to-list marketing site eliminating free listings and creating more value for our paid listers. Beginning in early October, our sales force hit the ground running with our focused cross-selling campaign to convert LoopNet information users to CoStar Suite and sell more paid advertising on LoopNet. In the first twelve days of the campaign, we closed over 500 deals.  The response from our sales teams, clients, and prospects has been overwhelmingly positive. We believe this will ultimately result in significant revenue opportunities for the next several years."

 
Year 2016-2017 Quarterly Results - Unaudited
(in millions, except per share data)
  2016   2017
  Q1 Q2 Q3 Q4   Q1 Q2 Q3
                 
Revenues $ 200   $ 207   $ 213   $ 218     $ 227   $ 237   $ 248  
Net income 17   16   23   30     22   22   34  
Net income per share - diluted 0.52   0.48   0.72   0.91     0.68   0.68   1.04  
Weighted average outstanding shares - diluted 32.4   32.4   32.4   32.5     32.6   32.7   32.8  
                 
EBITDA 48   46   58   64     55   44   73  
Adjusted EBITDA 58   56   67   75     64   54   84  
Non-GAAP net income 31   29   36   42     34   28   46  
Non-GAAP net income per share - diluted 0.95   0.91   1.11   1.29     1.05   0.86   1.41  
                               

Non-GAAP net income (defined below) for the quarter ended September 30, 2017 was $46 million or $1.41 per diluted share, an increase of $10 million versus the third quarter of 2016.  Adjusted EBITDA (which excludes stock-based compensation and other items as defined below) was $84 million for the third quarter of 2017, an increase of 25% over the third quarter of 2016.

As of September 30, 2017, the Company had approximately $633 million in cash, cash equivalents and long term investments, while short and long-term debt outstanding, net of debt issuance costs, totaled approximately $305 million.  Subsequent to the end of the third quarter, the Company completed a public offering of common stock on October 3, 2017.  The proceeds from the stock offering net of underwriting discounts and commissions totaled $833 million. In addition, the Company restructured its outstanding credit facility on October 19, 2017, by increasing the size of its revolving credit facility to $750 million, putting in place a new five-year term, and prepaying the outstanding term loan in full. The Company intends to use the proceeds from the public stock offering and the revolving credit facility to support future growth, to fund all or a portion of any strategic acquisitions, for working capital and other general corporate purposes.

2017 Outlook 
"We exceeded our third quarter top and bottom line estimates, and we are raising our full year 2017 earnings and revenue guidance," stated Scott Wheeler, Chief Financial Officer of CoStar Group.

The Company expects revenue to be in a range of approximately $962 million to $965 million for the full year of 2017, increasing the midpoint of the revenue outlook by approximately $7 million. For the fourth quarter, the Company expects revenue in a range of $251 million to $254 million.

Adjusted EBITDA for the full year of 2017 is expected to be in a range of $287 million to $291 million, an increase of $17 million at the midpoint from the prior outlook. For the fourth quarter, the Company expects adjusted EBITDA in a range of $85 million to $89 million.

For the full year of 2017, the Company expects non-GAAP net income per diluted share (defined below) in a range of approximately $4.65 to $4.73. The non-GAAP net income per diluted share outlook includes a $0.31 increase at the midpoint versus the previous outlook from strong operating performance, partially offset by approximately $0.09 net dilution related to the Company's recent common stock offering and debt reduction, for a net increase of $0.22 per diluted share. For the fourth quarter, the Company expects non-GAAP net income per diluted share in a range of $1.31 to $1.38, which includes net dilution of $0.11 from the common stock offering and debt restructuring.

The Company's outlook excludes any impact from the pending acquisition of ForRent, which was announced September 12, 2017. Based on preliminary estimates and assuming a close date at the end of November 2017, the Company expects that ForRent will contribute $6 million - $8 million in revenue in the fourth quarter of 2017, and be slightly dilutive on a non-GAAP net income per share basis due to the impact of integration and purchase accounting adjustments.

The preceding forward-looking statements reflect CoStar Group's expectations as of October 25, 2017, including forward-looking non-GAAP financial measures on a consolidated basis. We are not able to forecast with certainty whether or when certain events, such as acquisition-related costs, closing of the ForRent acquisition, the exact amounts or timing of investments, transition, restructuring, settlements or impairments will occur in any given quarter. Given the risk factors, uncertainties and assumptions discussed above, 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 and all of the disclosed non-GAAP financial measures 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 (i) interest income (expense), (ii) provision for income taxes, and (iii) depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before (i) stock-based compensation expense, (ii) acquisition and integration related costs, (iii) restructuring charges and related costs, and (iv) settlements and impairments incurred outside the Company's normal business operations.

Non-GAAP net income is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before (i) amortization of acquired intangible assets, (ii) stock-based compensation expense, (iii) acquisition and integration related costs, (iv) purchase accounting adjustments, (v) restructuring charges and related costs, (vi) settlements and impairments and (vii) debt restructuring costs. From this figure, we then subtract an assumed provision for income taxes to arrive at non-GAAP net income. The company assumes a 38% tax rate in order to approximate our long-term effective corporate tax rate.

Non-GAAP net income per diluted share (also referred to as non-GAAP EPS) is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period.  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 at 11:00 AM EDT on Thursday, October 26, 2017 to discuss earnings results for the third quarter of 2017 and the Company's outlook. The audio portion of the conference call will be broadcast live over the Internet at www.costargroup.com/investors/events. To join the conference call by telephone, please dial (800) 230-1096 (from the United States and Canada) or (612) 288-0340 (from all other countries) and refer to conference code 431618. An audio recording of the conference call will be available for replay approximately one hour after the call's completion and will remain available for a period of time following the call. To access the recorded conference call, please dial (800) 475-6701 (from the U.S. and Canada) or (320) 365-3844 (from all other countries) using access code 431618. The webcast replay will also be available in the Investors section of CoStar Group's 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
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
                 
                 
Revenues   $ 247,533     $ 212,711     $ 711,239     $ 619,319  
Cost of revenues   55,483     42,222     162,102     127,801  
Gross margin   192,050     170,489     549,137     491,518  
                 
Operating expenses:                
Selling and marketing   72,705     75,414     240,833     231,086  
Software development   21,536     19,357     67,054     56,539  
General and administrative   35,998     30,572     104,550     88,275  
Customer base amortization   4,298     5,550     13,642     17,602  
    134,537     130,893     426,079     393,502  
                 
Income from operations   57,513     39,596     123,058     98,016  
Interest and other income   555     344     1,589     587  
Interest and other expense   (2,901 )   (2,498 )   (8,280 )   (7,462 )
Income before income taxes   55,167     37,442     116,367     91,141  
Income tax expense   20,990     14,241     37,876     35,643  
Net income   $ 34,177     $ 23,201     $ 78,491     $ 55,498  
                 
Net income per share - basic   $ 1.05     $ 0.72     $ 2.42     $ 1.73  
Net income per share - diluted   $ 1.04     $ 0.72     $ 2.40     $ 1.71  
                 
Weighted average outstanding shares - basic   32,444     32,186     32,375     32,152  
Weighted average outstanding shares - diluted   32,814     32,440     32,705     32,423  

 

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
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
                 
Net income   $ 34,177     $ 23,201     $ 78,491     $ 55,498  
Income tax expense   20,990     14,241     37,876     35,643  
Income before income taxes   55,167     37,442     116,367     91,141  
Amortization of acquired intangible assets   8,498     11,286     28,731     34,721  
Stock-based compensation expense   9,743     9,311     29,203     26,981  
Acquisition and integration related costs   1,224         1,996     2,258  
Restructuring and related costs       66         66  
Settlements and impairments           (760 )    
Non-GAAP income before income taxes   74,632     58,105     175,537     155,167  
Assumed rate for income tax expense *   38 %   38 %   38 %   38 %
Assumed provision for income tax expense   (28,360 )   (22,080 )   (66,704 )   (58,963 )
Non-GAAP net income   $ 46,272     $ 36,025     $ 108,833     $ 96,204  
                 
Net income per share - diluted   $ 1.04     $ 0.72     $ 2.40     $ 1.71  
Non-GAAP net income per share - diluted   $ 1.41     $ 1.11     $ 3.33     $ 2.97  
                 
Weighted average outstanding  shares - basic   32,444     32,186     32,375     32,152  
Weighted average outstanding  shares - diluted   32,814     32,440     32,705     32,423  
                 
* A 38% tax rate is assumed, which approximates our long-term effective corporate tax rate.
                 
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
                 
Net income   $ 34,177     $ 23,201     $ 78,491     $ 55,498  
Amortization of acquired intangible assets in cost of revenues   4,200     5,736     15,089     17,119  
Amortization of acquired intangible assets in operating expenses   4,298     5,550     13,642     17,602  
Depreciation and other amortization   6,621     6,794     19,546     18,320  
Interest and other income   (555 )   (344 )   (1,589 )   (587 )
Interest and other expense   2,901     2,498     8,280     7,462  
Income tax expense   20,990     14,241     37,876     35,643  
EBITDA   $ 72,632     $ 57,676     $ 171,335     $ 151,057  
Stock-based compensation expense   9,743     9,311     29,203     26,981  
Acquisition and integration related costs   1,224         1,996     2,258  
Settlements and impairments           (760 )    
Restructuring and related costs       66         66  
Adjusted EBITDA   $ 83,599     $ 67,053     $ 201,774     $ 180,362  

 

CoStar Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
         
    September 30,
2017
  December 31,
2016
    (Unaudited)    
ASSETS        
Current assets:        
Cash and cash equivalents   $ 622,995     $ 567,223  
Accounts receivable, net   60,871     48,537  
Income tax receivable       129  
 Prepaid expenses and other current assets   16,215     11,602  
Total current assets   700,081     627,491  
         
Long-term investments   9,952     9,952  
Deferred income taxes, net   6,477     7,273  
Property and equipment, net   84,326     87,568  
Goodwill   1,283,190     1,254,866  
Intangible assets, net   191,178     195,965  
Deposits and other assets   5,392     1,948  
Total assets   $ 2,280,596     $ 2,185,063  
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Accounts payable, accrued expenses and other current liabilities   $ 94,109     $ 83,916  
Current portion of long-term debt   36,910     31,866  
Deferred revenue   45,568     39,164  
Total current liabilities   176,587     154,946  
         
Long-term debt, less current portion   268,586     306,473  
Deferred gain on sale of building   16,823     18,715  
Deferred rent   30,090     31,589  
Deferred income taxes, net   22,101     18,386  
Income taxes payable   3,982     741  
         
Stockholders' equity   1,762,427     1,654,213  
Total liabilities and stockholders' equity   $ 2,280,596     $ 2,185,063  

 

CoStar Group, Inc.
Condensed Consolidated Statements of Cash Flows - Unaudited
(in thousands, unaudited)
   
  Nine Months Ended
September 30,
  2017   2016
Operating activities:      
Net income $ 78,491     $ 55,498  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 48,277     53,041  
Amortization of debt issuance costs 2,157     2,407  
Stock-based compensation expense 29,203     26,981  
Deferred income tax expense, net 6,087     5,554  
Provision for losses on accounts receivable 3,992     6,462  
Changes in operating assets and liabilities, net of acquisitions:      
Accounts receivable (15,809 )   (13,808 )
Prepaid expenses and other current assets (3,561 )   (1,398 )
Deposits and other assets (3,387 )   473  
Accounts payable and other liabilities 11,888     12,864  
Deferred revenue 5,969     386  
Net cash provided by operating activities 163,307     148,460  
       
Investing activities:      
Proceeds from sale and settlement of investments     4,700  
Purchases of property and equipment and other assets (19,754 )   (11,692 )
Acquisitions, net of cash acquired (47,767 )   (10,443 )
Net cash used in investing activities (67,521 )   (17,435 )
       
Financing activities:      
Payments of long-term debt (35,000 )   (20,000 )
Payments of issuance costs (643 )    
Repurchase of restricted stock to satisfy tax withholding obligations (14,309 )   (14,573 )
Proceeds from exercise of stock options and employee stock purchase plan 9,058     4,791  
Net cash used in financing activities (40,894 )   (29,782 )
       
Effect of foreign currency exchange rates on cash and cash equivalents 880     (962 )
Net increase in cash and cash equivalents 55,772     100,281  
Cash and cash equivalents at the beginning of period 567,223     421,818  
Cash and cash equivalents at the end of period $ 622,995     $ 522,099  

 

CoStar Group, Inc.
Results of Segments-Unaudited
(in thousands)
               
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2017   2016   2017   2016
Revenues              
North America $ 239,537     $ 205,637     $ 688,704     $ 598,757  
International              
External customers 7,996     7,074     22,535     20,562  
Intersegment revenues * 5     3     27     24  
Total International revenues 8,001     7,077     22,562     20,586  
Intersegment eliminations (5 )   (3 )   (27 )   (24 )
Total revenues $ 247,533     $ 212,711     $ 711,239     $ 619,319  
               
EBITDA              
North America $ 72,267     $ 56,305     $ 170,064     $ 148,296  
International 365     1,371     1,271     2,761  
Total EBITDA $ 72,632     $ 57,676     $ 171,335     $ 151,057  
               
*Intersegment revenues recorded were attributable to services performed for the Company's wholly owned subsidiary, CoStar Portfolio Strategy by Grecam S.A.S. ("Grecam"), a wholly owned subsidiary of CoStar Limited, the Company's wholly owned U.K. holding company. Intersegment revenues are recorded at an amount the Company believes approximates fair value. North America EBITDA includes a corresponding cost for the services performed by Grecam for CoStar Portfolio Strategy.


CoStar Group, Inc.
Revenues by Services-Unaudited
(in thousands)
                 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
                 
Information and analytics                
CoStar Suite   $ 117,314     $ 103,261     $ 341,087     $ 301,969  
Information services   18,716     19,486     55,364     58,336  
Online marketplaces                
Multifamily   72,257     57,654     204,324     164,752  
Commercial property and land   39,246     32,310     110,464     94,262  
Total revenues   $ 247,533     $ 212,711     $ 711,239     $ 619,319  

 

CoStar Group, Inc.
Reconciliation of Non-GAAP Financial Measures with 2016-2017 Quarterly Results - Unaudited
(in millions, except per share data)
                   
Reconciliation of Net Income to Non-GAAP Net Income
                   
    2016   2017
    Q1 Q2 Q3 Q4   Q1 Q2 Q3
                   
Net income   $ 16.7   $ 15.6   $ 23.2   $ 29.6     $ 22.1   $ 22.2   $ 34.2  
Income tax expense   11.2   10.2   14.2   16.0     13.3   3.6   21.0  
Income before income taxes   27.9   25.8   37.4   45.5     35.4   25.8   55.2  
Amortization of acquired intangible assets   11.9   11.5   11.3   10.8     10.9   9.3   8.5  
Stock-based compensation expense   8.3   9.3   9.3   9.4     9.4   10.1   9.7  
Acquisition and integration related costs   1.5   0.8         0.4   0.4   1.2  
Restructuring and related costs       0.1   1.8          
Settlements and impairments             (0.8 )    
Non-GAAP income before income taxes   49.6   47.5   58.1   67.5     55.3   45.6   74.6  
Assumed rate for income tax expense *   38 % 38 % 38 % 38 %   38 % 38 % 38 %
Assumed provision for income tax expense   (18.9 ) (18.0 ) (22.1 ) (25.6 )   (21.0 ) (17.3 ) (28.4 )
Non-GAAP net income   $ 30.7   $ 29.4   $ 36.0   $ 41.8     $ 34.3   $ 28.3   $ 46.3  
                   
Non-GAAP net income per share - diluted   $ 0.95   $ 0.91   $ 1.11   $ 1.29     $ 1.05   $ 0.86   $ 1.41  
                   
Weighted average outstanding  shares - basic   32.1   32.2   32.2   32.2     32.3   32.4   32.4  
Weighted average outstanding  shares - diluted   32.4   32.4   32.4   32.5     32.6   32.7   32.8  
                   
* A 38% tax rate is assumed, which approximates our long-term effective corporate tax rate.    
     
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
                   
    2016   2017
    Q1 Q2 Q3 Q4   Q1 Q2 Q3
                   
Net income   $ 16.7   $ 15.6   $ 23.2   $ 29.6     $ 22.1   $ 22.2   $ 34.2  
Amortization of acquired intangible assets   11.9   11.5   11.3   10.8     10.9   9.3   8.5  
Depreciation and other amortization   5.6   5.9   6.8   6.3     6.4   6.5   6.6  
Interest and other income   (0.1 ) (0.2 ) (0.3 ) (1.2 )   (0.4 ) (0.6 ) (0.6 )
Interest and other expense   2.5   2.5   2.5   2.6     2.7   2.7   2.9  
Income tax expense   11.2   10.2   14.2   15.9     13.3   3.6   21.0  
EBITDA   $ 47.8   $ 45.6   $ 57.7   $ 64.0     $ 55.0   $ 43.7   $ 72.6  
Stock-based compensation expense   8.3   9.3   9.3   9.4     9.4   10.1   9.7  
Acquisition and integration related costs   1.5   0.8         0.4   0.4   1.2  
Restructuring and related costs       0.1   1.8          
Settlements and impairments             (0.8 )    
Adjusted EBITDA   $ 57.6   $ 55.7   $ 67.1   $ 75.2     $ 63.9   $ 54.3   $ 83.6  

 

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 Twelve Months
  Ended December 31, 2017   Ended December 31, 2017
  Low   High   Low   High
               
Net income $ 33,500     $ 38,200     $ 112,000     $ 116,700  
Income tax expense 17,100     19,500     55,000     57,400  
Income before income taxes 50,600     57,700     167,000     174,100  
Amortization of acquired intangible assets 8,300     8,300     37,000     37,000  
Stock-based compensation expense 11,800     9,800     41,000     39,000  
Acquisition and integration related costs 3,000     2,000     5,000     4,000  
Restructuring and related costs              
Settlements and impairments         (800 )   (800 )
Debt restructuring costs 3,000     3,000     3,000     3,000  
Non-GAAP income before income taxes 76,700     80,800     252,200     256,300  
Assumed rate for income tax expense * 38 %   38 %   38 %   38 %
Assumed provision for income tax expense (29,100 )   (30,700 )   (95,800 )   (97,400 )
Non-GAAP net income $ 47,600     $ 50,100     $ 156,400     $ 158,900  
               
Net income per share - diluted $ 0.93     $ 1.06     $ 3.33     $ 3.47  
Non-GAAP net income per share - diluted $ 1.31     $ 1.38     $ 4.65     $ 4.73  
               
Weighted average outstanding  shares - diluted 36,200     36,200     33,600     33,600  
               
* A 38% tax rate is assumed, which approximates our long-term effective corporate tax rate. 
               
Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA  
       
  Guidance Range   Guidance Range
  For the Three Months   For the Twelve Months
  Ended December 31, 2017   Ended December 31, 2017
  Low   High   Low   High
Net income $ 33,500     $ 38,200     $ 112,000     $ 116,700  
Amortization of acquired intangible assets 8,300     8,300     37,000     37,000  
Depreciation and other amortization 7,400     7,400     27,000     27,000  
Interest and other expense, net 4,200     4,200     11,000     11,000  
Income tax expense 17,100     19,500     55,000     57,400  
Stock-based compensation expense 11,800     9,800     41,000     39,000  
Acquisition and integration related costs 3,000     2,000     5,000     4,000  
Restructuring and related costs              
Settlements and impairments         (800 )   (800 )
Adjusted EBITDA $ 85,300     $ 89,400     $ 287,200     $ 291,300  


All Contacts

Scott Wheeler
Chief Financial Officer
(202) 336-6920
swheeler@costar.com

Richard Simonelli
Vice President, Investor Relations
(202) 346-6394
rsimonelli@costar.com

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. LoopNet is the most heavily trafficked commercial real estate marketplace online with over 5 million monthly unique visitors per month. Apartments.com, ApartmentFinder.com, ApartmentHomeLiving.com, Westside Rentals 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. Through an exclusive partnership with Move, a subsidiary of News Corporation, Apartments.com is the exclusive provider of apartment community listings across Move's family of websites, which include realtor.com®, doorsteps.com and move.com.  CoStar Group's websites attracted an average of approximately 37 million unique monthly visitors in aggregate in the third quarter of 2017. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Canada with a staff of over 3,600 worldwide, including the industry's largest professional research organization. For more information, visit www.costargroup.com

This news release contains "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 financial expectations, the Company's plans, objectives, expectations 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 significant risks and uncertainties. Actual results may differ materially from the results anticipated in 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 cannot or will not be sustained at the current pace, including trends related to revenue, bookings, sales, margins, and earnings; the risk that the Company is unable to sustain current revenue and earnings growth rates or increase them; the risk that returns on the Company's CoStar and LoopNet integration efforts, related investments and sales efforts will not continue in line with early results or that those efforts and investments will not result in significant sales and revenue opportunities for CoStar and LoopNet for the next several years as expected; the risk that revenues for the fourth quarter and full year 2017 will not be as stated in this press release; the risk that net income for the fourth quarter and full year 2017 will not be as stated in this press release; the risk that adjusted EBITDA for the fourth quarter and full year 2017 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 fourth quarter and full year 2017 will not be as stated in this press release; the risk that the acquisition of ForRent does not close when expected or at all; the risk that the businesses of ForRent, Apartments.com, and CoStar may not be combined successfully or in a timely and cost-efficient manner; the risk that the combination does not produce the expected results or benefits; the risk that business disruption relating to the ForRent acquisition may be greater than expected; the risk that synergies and expected operating efficiencies from the acquisition of ForRent may not be as expected, may not be fully realized, may take longer to realize than expected or may not drive revenue and earnings growth; the risk that the combination and integration of ForRent will disrupt CoStar's operations or result in the loss of consumers, property owners or key employees; the risk that the company's estimates and assumptions regarding ForRent change from current expectations, including as a result of the timing of the acquisition; the risk that the amount of  fourth quarter 2017 revenue from the ForRent acquisition differs from expectations and that dilution on a non-GAAP net income per share basis due to the impact of integration and purchase accounting adjustments as a result of the ForRent acquisition  differs from expectations; and the risk that costs actually incurred in connection with the Xceligent litigation differ from estimates included within the Company's forecast, which differences may be material.  Additional factors that could cause results to differ materially from those anticipated in the forward-looking statements can be found in CoStar's Annual Report on Form 10-K for the year ended December 31, 2016, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, and the Company's other filings with the SEC available at the SEC's website (www.sec.gov). CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.      

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