Despite acquisition woes, CoStar Group saw its Homesnap and brands help boost the company’s revenue 21 percent from Q2 2020.

Commercial real estate giant CoStar Group reported solid second-quarter earnings on Tuesday with revenue increasing 21 percent annually to $480 million. Although the company experienced a year-over-year increase (+1.63 percent) in its net income, it failed to secure the same growth on a quarterly basis with profits sliding from $74 million to $61 million.

The company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) increased 22 percent annually to $133 million. The adjusted EBITDA, which excludes stock-based compensation, acquisition and integration-related costs, increased 17 percent annually to $129 million, according to an announcement.

CEO Andy Florance was pleased with the company’s performance, he said, thanks to increased traffic and bookings to CoStar’s brands, which include CoStar, LoopNet,, BizBuySell, Lands of America and STR.

Andy Florance (Photo courtesy of CoStar)

“We saw incredibly strong performance across all of our businesses in the second quarter, with total revenue and profit ahead of forecast and the total numbers of visitors to our platforms up over 45 percent year over year,” Florance said in a statement. “CoStar Group net new bookings in the second quarter of 2021 increased 47 percent over the second quarter of 2020 to $51 million.”

“CoStar Suite net new bookings were the strongest in years, up over 900 percent year over year and 19 percent quarter over quarter in the second quarter,” he added.

Florance highlighted as the company reported a 30 percent year-over-year increase in traffic — an all-time high for the 29-year-old operation. The traffic increase resulted in a whopping 57 percent annual increase in leads, as apartment owners and managers took advantage of a boost in renter demand.

“Total leads generated by are up over 120 percent since 2018,” he explained. “During the second quarter of 2021, our most economical ad packages generated more leads than our top-level packages were generating just a year ago.”

“Without significant price increases during the pandemic, our effective price per lead dropped dramatically,” he added. “This caused net new bookings in to fall from the record-high levels achieved in the second quarter of 2020.”

Florance said the company will announce pricing changes in the near future to “reflect the strength of our dramatically higher lead flows, which we believe will accelerate net new bookings.”

CoStar had a drama-filled second quarter as they failed to acquire CoreLogic and paid dearly for their scuttled acquisition of RentPath. However, the company bounced back with the acquisition of — which is set to become one of CoStar’s biggest moneymakers.

“We believe that the acquisition of is highly complementary alongside Homesnap, the industry-leading workflow and marketing platform for residential real estate agents that we acquired in December last year,” Florance told Inman in April.

LoopNet, Ten-X and Homesnap also secured double-digit increases in revenue and subscriptions. LoopNet Signature Ad revenue increased 71 percent year over year, while Ten-X’s revenue rose 40 percent from Q2 2020 due to a boost in asset volume and sales. Homesnap’s revenue increased 50 percent annually, with the total number of agent subscribers growing 80 percent to 63,000.

Florance said the company’s second-quarter performance has set the stage for a successful expansion of and future residential technology and content. With that in mind, the company boosted its revenue trajectory to $495 million to $500 million for Q3 and $1.940 billion to $1.950 billion for the full year.

However, CoStar lowered the expectations for its adjusted EBITDA and net income, due to the costs associated with and investing in the residential real estate market.

“With great momentum in our core business, we are focused on significantly expanding our total addressable market by leveraging our strengths into the digitization of residential real estate and into international markets,” he said. “We are committed to accelerating future growth, as evidenced by the acquisition of in May of this year; the steps we have taken to improve that experience for sellers, buyers and real estate agents; and our planned investment in residential technology and content in the second half of 2021.”

CoStar’s earnings had little effect on its stock market performance (Nasdaq: CSGP), with the price per share declining $0.25 from the close of the market on Monday ($89.27) to the close of the market on Tuesday ($89.02).

Email Marian McPherson

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