CEO Andy Florance touted his company’s residential portal as the “fastest growing residential property site in the United States” in a new earnings report released Tuesday.

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Commercial real estate and up-and-coming portal warrior CoStar managed to maintain a long-running winning streak at the end of 2023 by growing revenue, while also notching successes in its push into the residential space.

In total, CoStar brought in $640 million in revenue between October and December, according to a newly published earnings report. That’s an increase of 12 percent compared to the fourth quarter of 2022. Those results make the final three months of last year the company’s 51st straight quarter of revenue growth.

CoStar also remained profitable in Q4, earning a total of $96 million in net income. However, that is down from the $124 million in profit the company earned during the final quarter of 2022.

Andy Florance

CEO Andy Florance celebrated the numbers, saying in the report that the company “delivered exceptional results in our commercial information and marketplace businesses for the full year 2023, while at the same time devoting major time and resources towards launching the new”

Tuesday’s earnings come less than two weeks after CoStar revealed to Inman that it was launching a massive marketing campaign to promote The campaign kicked off with a series of Super Bowl ads, and the company plans to keep spending on marketing throughout 2024. Florance wouldn’t say how much exactly CoStar plans to spend while speaking with Inman, but did say it “rounds up to a billion.”

Though spending for the 2024 campaign wouldn’t necessarily be reflected in the Q4 numbers, Tuesday’s earnings call was the company’s first opportunity to speak directly to the public since announcing the marketing strategy. In the report, Florance touted the Super Bowl commercials, adding that the following day “we began monetizing, selling subscriptions to residential real estate agents.”

“By Friday, February 16th we were selling more than $1.1 million in net new bookings in a day,” Florance added. “Within the first week, we have sold almost $4.5 million in net new bookings.”

Florance went on to describe as “the fastest growing residential property site in the United States, with average monthly unique visitors increasing 600 percent year over year, according to Google Analytics.”

“Our Residential Network traffic reached 95 million monthly average unique visitors in Q4 2023 and is now the second most highly trafficked network of residential sites and growing,” Florance continued.

During a call with investors Tuesday afternoon, Florance also said, “Our efforts to grow traffic on in 2023 were a big success,” adding that among other things the coming year will be spent on growing consumers’ unaided awareness of the brand.

Heading into Tuesday’s earnings, shares in CoStar ended at just over $81. That was down for the day, and down compared to the beginning of 2024, but up compared to one year ago.

Shares fell in after-hours trading Tuesday following the earning report’s publication.

Credit: Google

CoStar had a market cap of about $33.2 billion when markets closed Tuesday.

CoStar last reported earnings in October. At the time, the company revealed that its revenue rose 12 percent year over year to $625 million between July and September of 2023. Profits also increased 25 percent year over year to $91 million.

Long a powerhouse in commercial real estate, CoStar’s large size and huge resources have made its entrance into the residential sector one of real estate’s defining stories of the past few years. Florance effectively kicked off what have now become known as the “portal wars” in 2021 when on Inman Connect Las Vegas stage he pointedly criticized the way Zillow — the largest residential portal, both then and now — treats agents.

Florance was less openly pugnacious during Tuesday’s investor call, but he did say that CoStar’s research suggests consumers and real estate professionals both dislike portals that “bait” users to collect leads. Based on Florance’s past commentary about rival portals, the comment was likely a reference to Zillow’s lead generation business.

Speaking of the marketing effort, he also said, “We believe no other competitor is investing close to this effort.”

Florance additionally spent a significant amount of time during Tuesday’s investor call touting’s success. CoStar bought the brand in 2014, and Tuesday’s report describes the site as holding “the number one position in the industry in terms of monthly unique visitor traffic.” The report also describes as CoStar’s “single largest business.”

CoStar’s apparent success with is significant because other portals, including both Zillow and Redfin, also offer rental listings. The site’s trajectory is perhaps even more relevant, at least to Inman readers, because it offers a case study in just how far CoStar is able to grow a residential search site — something that has implications for the company’s efforts to take share from the incumbent homebuying portals.

During the investor call, Florance ultimately described CoStar’s marketing efforts as “putting the pedal to the metal” and said the results so far have exceeded his expectations.

So far, in the fourth quarter of 2023 CoStar generated 7.8 million in revenue in North America from its residential segment, according to Tuesday’s report. That was down from $16.2 million in the fourth quarter of 2022.

CoStar Chief Financial Officer Scott Wheeler added during the call that the company expects to generate between $50 million and $60 million from memberships.

Such memberships are designed for real estate professionals. Florance explained during the call that members’ listings and bio pages get more prominent positions on Memberships are priced based on users’ sales volumes and the typical price points of their deals and will eventually be based on the markets in which they work. Florance also said that members will typically get 1.3 million impressions across their listings and bio pages on, while non-members will get around 5,000.

At another point during the call, Florance said that “peak investment” for will come during the first half of 2024, while profits and margins from those efforts will likely begin to appear in the latter half of the year.

“We believe,” Florance also said, “we just launched Costar Group’s next transformative billion-dollar business.”

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

Email Jim Dalrymple II

Andy Florance | Zillow
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