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CoStar Group (CSGP) Q3 Earnings Top Estimates, Revenues Up Y/Y
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CoStar Group (CSGP - Free Report) reported third-quarter 2022 non-GAAP earnings of 30 cents per share, beating the Zacks Consensus Estimate by 25% and increasing 20% year over year.
Revenues of $556.9 million beat the Zacks Consensus Estimate by 0.35% and increased 11.5% year over year.
The upside was led by one of the company’s main products, Apartments.com, which experienced an exceptional sales quarter.
Annualized net new sale bookings led by Apartments.com was $76 million, reflecting a 62% increase year over year.
CoStar Group, Inc. Price, Consensus and EPS Surprise
CoStar revenues (38.2% of revenues) increased 16.1% year over year to $212.7 million. In the third quarter, CoStar surpassed 180,000 subscribers and maintained high renewal rates at 93% from the year-ago period.
In the CoStar business segment, Apartments.com net new sales bookings surged a whopping 192% year over year as apartment vacancy rates increased, leading to raised apartment advertisements. Apartment.com revenues were $190 million in the third quarter of 2022, which increased 11% year over year.
Information Services (7.4% of revenues) increased 14.2% year over year to $41 million. The revenue surge can be attributed to the real estate manager solution, which contributed to the information services revenues.
Multifamily revenues (10.8% of revenues) increased 7.4% year over year to $189.5 million. The improvement in multifamily revenues was fueled by higher vacancy rates. However, it is still reeling from the post-effects of the pandemic as vacancy rates are still not at the pre-pandemic levels.
LoopNet revenues (10.6% of revenues) were up 12.1% year over year to $58.9 million. Net new sales bookings for LoopNet in the third quarter of 2022 are up 99% year over year.
Third-quarter Residential revenues (3.5% of revenues) were $19.4 million, declining 21.8% compared with the third quarter of 2021 levels.
Other marketplace revenues (6.4% of revenues) increased 11.7% year over year to $35.4 million.
Operating Details
Both selling and marketing and software development expenses, as a percentage of revenues, fell 280 bps and 40 bps, respectively. General & administrative expenses increased 340 bps, as a percentage of revenues, while customer base amortization expenses increased by 150 bps.
Adjusted EBITDA margin in the second quarter of 2022 was 27.4% compared with 28.8% in the year-ago quarter.
Balance Sheet and Cash Flow Statement
CSGP reported cash, cash equivalents and restricted cash of $4.78 billion as of Sep 30, 2022, compared with $4 billion as of Jun 30, 2022.
The company, however, had long-term debt of $988.9 million as of Jun 30, 2022, compared with $1 billion as of Jun 30, 2022.
It generated $293.59 million in cash from operations compared with $212 million in the previous quarter.
Guidance
Fourth-quarter 2022 revenues are expected between $566 million to $571 million, representing revenue growth of 12% to 13%.
The company has raised its revenue guidance to a range of $2.175 billion to $2.180 billion for 2022, an increase of $5 million at the mid-point of the range compared with the prior outlook.
The company expects adjusted EBITDA in the range of $176 million to $181 million, indicating a margin of 31% at the midpoint. For the full year, CSGP raised its adjusted EBITDA guidance to a range of $665 million to $670 million, which reflects an increase of $48 million at the mid-point.
Stocks to Consider
CoStar currently carries a Zacks Rank #3 (Hold).
CSGP’s shares have fallen 5.8% compared with the Zacks Computer and Technology sector’s decline of 32.6% in the year-to-date period.
Here are some top-ranked stocks worth considering in the broader sector.
Image: Bigstock
CoStar Group (CSGP) Q3 Earnings Top Estimates, Revenues Up Y/Y
CoStar Group (CSGP - Free Report) reported third-quarter 2022 non-GAAP earnings of 30 cents per share, beating the Zacks Consensus Estimate by 25% and increasing 20% year over year.
Revenues of $556.9 million beat the Zacks Consensus Estimate by 0.35% and increased 11.5% year over year.
The upside was led by one of the company’s main products, Apartments.com, which experienced an exceptional sales quarter.
Annualized net new sale bookings led by Apartments.com was $76 million, reflecting a 62% increase year over year.
CoStar Group, Inc. Price, Consensus and EPS Surprise
CoStar Group, Inc. price-consensus-eps-surprise-chart | CoStar Group, Inc. Quote
Top Line Details
CoStar revenues (38.2% of revenues) increased 16.1% year over year to $212.7 million. In the third quarter, CoStar surpassed 180,000 subscribers and maintained high renewal rates at 93% from the year-ago period.
In the CoStar business segment, Apartments.com net new sales bookings surged a whopping 192% year over year as apartment vacancy rates increased, leading to raised apartment advertisements. Apartment.com revenues were $190 million in the third quarter of 2022, which increased 11% year over year.
Information Services (7.4% of revenues) increased 14.2% year over year to $41 million. The revenue surge can be attributed to the real estate manager solution, which contributed to the information services revenues.
Multifamily revenues (10.8% of revenues) increased 7.4% year over year to $189.5 million. The improvement in multifamily revenues was fueled by higher vacancy rates. However, it is still reeling from the post-effects of the pandemic as vacancy rates are still not at the pre-pandemic levels.
LoopNet revenues (10.6% of revenues) were up 12.1% year over year to $58.9 million. Net new sales bookings for LoopNet in the third quarter of 2022 are up 99% year over year.
Third-quarter Residential revenues (3.5% of revenues) were $19.4 million, declining 21.8% compared with the third quarter of 2021 levels.
Other marketplace revenues (6.4% of revenues) increased 11.7% year over year to $35.4 million.
Operating Details
Both selling and marketing and software development expenses, as a percentage of revenues, fell 280 bps and 40 bps, respectively. General & administrative expenses increased 340 bps, as a percentage of revenues, while customer base amortization expenses increased by 150 bps.
Adjusted EBITDA margin in the second quarter of 2022 was 27.4% compared with 28.8% in the year-ago quarter.
Balance Sheet and Cash Flow Statement
CSGP reported cash, cash equivalents and restricted cash of $4.78 billion as of Sep 30, 2022, compared with $4 billion as of Jun 30, 2022.
The company, however, had long-term debt of $988.9 million as of Jun 30, 2022, compared with $1 billion as of Jun 30, 2022.
It generated $293.59 million in cash from operations compared with $212 million in the previous quarter.
Guidance
Fourth-quarter 2022 revenues are expected between $566 million to $571 million, representing revenue growth of 12% to 13%.
The company has raised its revenue guidance to a range of $2.175 billion to $2.180 billion for 2022, an increase of $5 million at the mid-point of the range compared with the prior outlook.
The company expects adjusted EBITDA in the range of $176 million to $181 million, indicating a margin of 31% at the midpoint. For the full year, CSGP raised its adjusted EBITDA guidance to a range of $665 million to $670 million, which reflects an increase of $48 million at the mid-point.
Stocks to Consider
CoStar currently carries a Zacks Rank #3 (Hold).
CSGP’s shares have fallen 5.8% compared with the Zacks Computer and Technology sector’s decline of 32.6% in the year-to-date period.
Here are some top-ranked stocks worth considering in the broader sector.
ZoomInfo Technologies (Z - Free Report) I) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company is set to report its third quarter 2022 earnings on Nov 1.
ZI’s shares have lost 26.5% in the year-to-date period compared with the Zacks Computer - Integrated Systems industry’s decline of 8.5%.
Tencent Music Entertainment Group (TME - Free Report) also a Zacks Rank #2. The company is set to report its third quarter 2022 earnings on Nov 15.
TME shares have lost 44.1% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 35.2%.
Upstart (UPST - Free Report) has a Zacks Rank #2. The company is set to report its third quarter 2022 earnings on Nov 8.
UPST shares have lost 83.7% in the year-to-date period compared with the Zacks Computers - IT Services industry’s decline of 34.4%.