The company’s revenue jumped 13 percent year over year between October and December. CEO Andy Florance also promised Tuesday to continue CoStar’s push into residential real estate.

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Despite a slowing real estate market last year, and amid an ongoing feud with arch rival Zillow, CoStar on Tuesday revealed that both its revenue and profits jumped in the fourth quarter of 2022.

In total, CoStar brought in $573 million in revenue between October and December, according to a newly published earnings report. That’s a 13 percent increase compared to the same period in 2021. Profit also jumped, rising 34 percent year over year to $124 million.

CoStar’s fourth quarter revenues and profits were also higher than those it brought in during any other quarter in 2022.

Tuesday’s report additionally shows that for all of 2022, CoStar brought in $2.18 billion in revenue, a 12 percent year-over-year increase, and made $369 million in profit, a 26 percent increase.

Andy Florance

In the report, company founder and CEO Andy Florance said “2022 was an outstanding year for CoStar Group.”

In a call with investors Tuesday afternoon, Florance added that the company “delivered exceptional sales results” in the fourth quarter.

“Costar definitely had a tremendous year,” Florance said later during the call.

In a surprising announcement during the call, Florance also revealed that CoStar will not acquire portal Instead, CoStar will focus on building up its business.

In the hours before Tuesday’s report went live, the company’s shares were trading in the low $76 range. That was down slightly for the day, and compared to the last month, but up compared to one year ago when shares were fetching just above $62.

Immediately after the company published its fourth quarter earnings, however, shares plummeted in after hours trading.

Credit: Google

CoStar had a market cap of around $31 billion as of the close of the markets Tuesday.

CoStar last reported earnings in late October. At the time, the company revealed that during the third quarter of 2022 its revenue jumped 12 percent year over year to $557 million. Profit climbed 19 percent during the third quarter to $72 million.

Back in October, Florance described the company’s third quarter 2022 results as “outstanding.”

In Tuesday’s new earning report, Florance singled out CoStar-owned, saying he was “particularly pleased” with the brand’s revenue growth, and noting that net bookings for the site in “the fourth quarter were the highest ever, increasing 177% compared to the same period in 2021.”

In his investor call, Florance added that the brand is “stronger than ever.”

Tuesday’s earnings come amid an ongoing cold war between CoStar and portal giant Zillow. The crux of the conflict is CoStar’s attempt to move from working mostly in commercial real estate to also running residential listing portals. So far, CoStar’s biggest offensive in the conflict took place last June when it launched Citysnap, a portal focused on New York City that directly competes with Zillow-owned StreatEasy.

A Costar acquisition of had the potential to intensify the rivalry even more by expanding the competition with Zillow to the entire U.S.

Florance has also fanned the rivalry’s flames, suggesting Zillow “blackmails” agents and “hijacks” listings.

Zillow has resisted publicly stirring the pot to the same extent, though when asked directly about CoStar during his own recent earnings call CEO Rich Barton expressed confidence in his company.

The feud has also grabbed the attention of third parties. On Sunday, for instance, Gary Keller weighed in during his company’s Family Reunion conference, saying CoStar’s purchase of portal maker Homesnap apparently “didn’t get them where they wanted to go.”

“My prediction is they’re going to be relentless,” Keller added of CoStar’s push into residential real estate.

In Tuesday’s earnings report, Florance said his company “made great progress on our residential strategy in 2022.” He also said that traffic to — which CoStar acquired in 2021 — “has passed 20 million unique monthly visitors and has doubled in the last few months.”

“Given the strong momentum of,” Florance added in the report, “we plan to increase our residential investments in the year ahead.”

During Tuesday’s investor call, Florance also said that CoStar’s biggest 2023 investment will be in its residential business.

He added during the call that he has used rival portals. Though he didn’t name names, he described his experience as “remarkably awful,” and noted that it led to him being “bombarded” with inquiries from agents. He also criticized unnamed rivals for using all listings to funnel leads to a small number of agents who pay for them.

Alternatively, Florance said CoStar is pursuing a “your listing, your lead” approach that connects buyers directly to listing agents. He then argued that such and approach is better aligned with agents’ needs, and that it “offers a dramatically better consumer experience.”

“We believe that by respecting your listing, your lead,” Florance added, “we can serve all agents better.”

Update: This story was updated after publication with additional information from CoStar’s earnings report, and with commentary from the company’s call with investors. 


Email Jim Dalrymple II

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