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CoStar Group Third Quarter 2021 Revenue Increased 17% Year-over-Year, CoStar Accelerated to Double-Digit Revenue Growth with Net Sales Reaching All-Time High

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, 2021, was $499 million, an increase of 17% over revenue of $426 million for the third quarter of 2020.

Net income for the third quarter of 2021 was $64 million, or $0.16 per diluted share. Non-GAAP net income for the third quarter of 2021 (which excludes amortization of acquired intangible assets, stock-based compensation, and other items as described below) was $99 million or $0.25 per diluted share, an increase of $10 million or 11% versus the third quarter of 2020. EBITDA for the third quarter of 2021 was $123 million, an increase of 13% versus EBITDA of $108 million for the third quarter of 2020.

“We achieved another great quarter of strong results, with CoStar Group now at nearly $2 billion in run rate revenue and profit for the third quarter of 2021 well-ahead of our guidance,” commented Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “CoStar performance continues to improve, with revenue returning to double-digit growth rates in the third quarter of 2021 and our CoStar sales team produced net sales bookings 57% higher quarter-over-quarter and 566% higher year-over-year," continued Florance. "I’m very happy with the performance of our Ten-X and Residential businesses as well, both of which delivered exceptional revenue growth of 27% for Ten-X and 38% for Homesnap, on a year-over-year and pro forma basis, respectively.”

“With recent record levels of demand for apartments, vacancies have declined to the lowest levels in decades creating some headwinds for demand in apartment advertising. However, traffic to our network of sites increased 17% year-over-year in the third quarter of 2021,” stated Florance, “with Apartments.com generating millions more high-quality leads for our customers year-over-year in a low-vacancy environment while our clients are increasing their rents to record levels. This tremendous growth in leads and rents has positioned Apartments.com to begin initiating pricing adjustments to better capture the value of the lead flow we are delivering to our clients. We are just beginning to implement the new pricing, and I am encouraged by the initial results of the price changes.”

Companywide net bookings for the third quarter of 2021 were $47 million, which includes stronger than expected CoStar sales offset by sales results slowed by the ultra-low vacancy rates in Multifamily.

Year 2020-2021 Quarterly Results - Unaudited

(in millions, except per share data)

 

2020

 

2021

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

 

 

 

 

 

 

 

 

 

Revenues

$392

$397

$426

$444

 

$458

$480

$499

Net income

73

60

58

36

 

74

61

64

Net income per share - diluted(1)

0.20

0.16

0.15

0.09

 

0.19

0.16

0.16

Weighted average outstanding shares - diluted(1)

368

377

394

394

 

394

394

394

 

 

 

 

 

 

 

 

 

EBITDA

100

109

108

88

 

136

133

123

Adjusted EBITDA

124

129

134

167

 

160

150

144

Non-GAAP net income

90

88

89

112

 

108

103

99

Non-GAAP net income per share - diluted(1)

0.24

0.23

0.23

0.29

 

0.27

0.26

0.25

__________________________

 

 

 

 

 

 

 

 

(1) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

As of September 30, 2021, the Company had approximately $3.8 billion in cash, cash equivalents and restricted cash and outstanding debt of approximately $988 million.

2021 Outlook

“In order to provide additional transparency and insight into the revenue performance of our most promising growth areas, we will now report revenue for both LoopNet and Residential services separately in our quarterly financial results,” said CoStar Group Chief Financial Officer, Scott Wheeler. The Commercial Property and Land sector is being renamed Other Marketplaces and includes Ten-X and the Lands and Businesses for Sale marketplaces.

The Company is adjusting its revenue guidance for the full year of 2021 to a new range of $1.935 billion to $1.940 billion, representing growth of approximately 17% year-over-year at the midpoint of the range. The new guidance includes a reduction in expected revenue from Multifamily which is partially offset by stronger expected revenue from CoStar. Revenue for the fourth quarter of 2021 is expected to be in the range of $498 million to $503 million, representing year-over-year revenue growth of approximately 13% at the midpoint of the range.

The Company is raising its adjusted EBITDA guidance for the full year of 2021 to a new range of $615 million to $620 million, representing growth of approximately 12% at the midpoint of the range. For the fourth quarter of 2021, the Company expects adjusted EBITDA in a range of $161 million to $166 million.

The Company is raising its non-GAAP net income per diluted share guidance for full-year 2021 to a new range of $1.07 to $1.08 per share based on 394 million shares. For the fourth quarter of 2021, we expect non-GAAP net income per diluted share in a range of $0.29 to $0.30 per share based on 394 million shares. These ranges include an estimated non-GAAP tax rate of 25% for the full year and the fourth quarter of 2021.

The preceding forward-looking statements reflect CoStar Group’s expectations as of October 26, 2021, including forward-looking non-GAAP financial measures on a consolidated basis, based on current estimates, expectations, observations, and trends. Given the risk factors, rapidly evolving economic environment, and uncertainties and assumptions discussed in this release and in our quarterly reports on Form 10-Q and annual reports on Form 10-K, including uncertainties as a result of the COVID-19 pandemic and responses to it by, and the impact on, global economies and the commercial real estate industry, 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 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 interest (expense) income and other (expense) income, loss on debt extinguishment, income taxes, depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, and settlements and impairments incurred outside the Company’s normal course of business.

Non-GAAP net income is a non-GAAP financial measure determined by adjusting GAAP net income attributable to CoStar Group for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside the Company's normal course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes. In 2021, the Company is assuming a 25% tax rate in order to approximate our statutory corporate tax rate excluding the impact of discrete items.

Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share. 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 to discuss third quarter 2021 results and the Company’s outlook at 5:00 PM EDT on Tuesday, October 26, 2021. A live audio webcast of the conference will be available in listen-only mode through the Investors section of the CoStar Group website: https://investors.costargroup.com. A replay of the webcast audio will also be available in the Investors section of our 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,

 

 

2021

 

2020

 

2021

 

2020

Revenues

 

$

499,319

 

 

$

425,620

 

 

$

1,437,349

 

 

$

1,214,626

 

Cost of revenues

 

92,597

 

 

77,865

 

 

270,911

 

 

230,814

 

Gross profit

 

406,722

 

 

347,755

 

 

1,166,438

 

 

983,812

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing (excluding customer base amortization)

 

180,055

 

 

146,634

 

 

483,354

 

 

402,202

 

Software development

 

53,143

 

 

40,732

 

 

148,500

 

 

121,343

 

General and administrative

 

64,671

 

 

65,322

 

 

186,747

 

 

181,598

 

Customer base amortization

 

19,121

 

 

18,258

 

 

55,885

 

 

44,677

 

 

 

316,990

 

 

270,946

 

 

874,486

 

 

749,820

 

 

 

 

 

 

 

 

 

 

Income from operations

 

89,732

 

 

76,809

 

 

291,952

 

 

233,992

 

Interest expense, net

 

(7,943)

 

 

(7,537)

 

 

(23,698)

 

 

(9,482)

 

Other income (expense)

 

1,546

 

 

(338)

 

 

2,343

 

 

29

 

Income before income taxes

 

83,335

 

 

68,934

 

 

270,597

 

 

224,539

 

Income tax expense

 

19,031

 

 

10,748

 

 

70,933

 

 

33,200

 

Net income

 

$

64,304

 

 

$

58,186

 

 

$

199,664

 

 

$

191,339

 

 

 

 

 

 

 

 

 

 

Net income per share - basic(1)

 

$

0.16

 

 

$

0.15

 

 

$

0.51

 

 

$

0.51

 

Net income per share - diluted(1)

 

$

0.16

 

 

$

0.15

 

 

$

0.51

 

 

$

0.50

 

 

 

 

 

 

 

 

 

 

Weighted-average outstanding shares - basic(1)

 

392,419

 

 

391,586

 

 

392,101

 

 

377,177

 

Weighted-average outstanding shares - diluted(1)

 

394,295

 

 

394,013

 

 

394,036

 

 

379,704

 

__________________________

 

 

 

 

 

 

 

 

(1) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

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,

 

 

2021

 

2020

 

2021

 

2020

Net income

 

$

64,304

 

 

$

58,186

 

 

$

199,664

 

 

$

191,339

 

Income tax expense

 

19,031

 

 

10,748

 

 

70,933

 

 

33,200

 

Income before income taxes

 

83,335

 

 

68,934

 

 

270,597

 

 

224,539

 

Amortization of acquired intangible assets

 

26,330

 

 

24,870

 

 

77,450

 

 

63,348

 

Stock-based compensation expense

 

16,299

 

 

16,730

 

 

46,988

 

 

41,437

 

Acquisition and integration related costs

 

5,012

 

 

7,887

 

 

15,475

 

 

26,631

 

Restructuring and related costs

 

 

 

413

 

 

 

 

413

 

Other expense

 

934

 

 

113

 

 

2,791

 

 

113

 

Non-GAAP income before income taxes

 

131,910

 

 

118,947

 

 

413,301

 

 

356,481

 

Assumed rate for income tax expense(1)

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(32,978)

 

 

(29,737)

 

 

(103,325)

 

 

(89,120)

 

Non-GAAP net income

 

$

98,932

 

 

$

89,210

 

 

$

309,976

 

 

$

267,361

 

 

 

 

 

 

 

 

 

 

Net income per share - diluted(2)

 

$

0.16

 

 

$

0.15

 

 

$

0.51

 

 

$

0.50

 

Non-GAAP net income per share - diluted(2)

 

$

0.25

 

 

$

0.23

 

 

$

0.79

 

 

$

0.70

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic(2)

 

392,419

 

 

391,586

 

 

392,101

 

 

377,177

 

Weighted average outstanding shares - diluted(2)

 

394,295

 

 

394,013

 

 

394,036

 

 

379,704

 

__________________________

 

 

 

 

 

 

 

 

(1) A 25% tax rate is assumed for 2021 and 2020, which approximates our statutory federal and state corporate tax rate.

(2) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2021

 

2020

 

2021

 

2020

Net income

 

$

64,304

 

 

$

58,186

 

 

$

199,664

 

 

$

191,339

 

Amortization of acquired intangible assets in cost of revenues

 

7,209

 

 

6,612

 

 

21,565

 

 

18,671

 

Amortization of acquired intangible assets in operating expenses

 

19,121

 

 

18,258

 

 

55,885

 

 

44,677

 

Depreciation and other amortization

 

6,610

 

 

6,806

 

 

22,138

 

 

20,563

 

Interest expense

 

7,943

 

 

7,537

 

 

23,698

 

 

9,482

 

Other (income) expense

 

(1,546)

 

 

338

 

 

(2,343)

 

 

(29)

 

Income tax expense

 

19,031

 

 

10,748

 

 

70,933

 

 

33,200

 

EBITDA

 

$

122,672

 

 

$

108,485

 

 

$

391,540

 

 

$

317,903

 

Stock-based compensation expense

 

16,299

 

 

16,730

 

 

46,988

 

 

41,437

 

Acquisition and integration related costs

 

5,012

 

 

7,887

 

 

15,475

 

 

26,631

 

Restructuring and related costs

 

 

 

413

 

 

 

 

413

 

Adjusted EBITDA

$

143,983

$

133,515

$

454,003

$

386,384

CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)

 

 

 

 

 

 

 

September 30,

2021

 

December 31,

2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

3,761,587

 

 

$

3,755,912

 

Accounts receivable

 

128,700

 

 

119,059

 

Less: Allowance for credit losses

 

(13,049)

 

 

(15,110)

 

Accounts receivable, net

 

115,651

 

 

103,949

 

Prepaid expenses and other current assets

 

37,599

 

 

28,651

 

Total current assets

 

3,914,837

 

 

3,888,512

 

 

 

 

 

 

Deferred income taxes, net

 

1,975

 

 

4,983

 

Property and equipment, net

 

238,866

 

 

126,325

 

Lease right-of-use assets

 

105,964

 

 

108,740

 

Goodwill

 

2,293,514

 

 

2,235,999

 

Intangible assets, net

 

447,900

 

 

426,745

 

Deferred commission costs, net

 

96,303

 

 

93,274

 

Deposits and other assets

 

16,971

 

 

15,856

 

Income tax receivable

 

14,986

 

 

14,986

 

Total assets

 

$

7,131,316

 

 

$

6,915,420

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

17,487

 

 

$

15,732

 

Accrued wages and commissions

 

82,905

 

 

80,998

 

Accrued expenses

 

86,788

 

 

110,305

 

Income taxes payable

 

11,828

 

 

16,316

 

Lease liabilities

 

29,878

 

 

32,648

 

Deferred revenue

 

92,631

 

 

74,851

 

Total current liabilities

 

321,517

 

 

330,850

 

 

 

 

 

 

Long-term debt, net

 

987,633

 

 

986,715

 

Deferred income taxes, net

 

83,399

 

 

72,991

 

Income taxes payable

 

26,188

 

 

25,282

 

Lease and other long-term liabilities

 

109,156

 

 

124,223

 

Total liabilities

 

$

1,527,893

 

 

$

1,540,061

 

 

 

 

 

 

Total stockholders’ equity

 

5,603,423

 

 

5,375,359

 

Total liabilities and stockholders’ equity

 

$

7,131,316

 

 

$

6,915,420

 

CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)

 

 

 

Nine Months Ended

September 30,

 

2021

 

2020

Operating activities:

 

 

 

Net income

$

199,664

 

 

$

191,339

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

102,390

 

 

83,911

 

Amortization of deferred commissions costs

46,728

 

 

45,017

 

Amortization of Senior Notes discount and issuance costs

1,742

 

 

1,082

 

Non-cash lease expense

21,118

 

 

18,801

 

Stock-based compensation expense

46,988

 

 

40,783

 

Deferred income taxes, net

16,255

 

 

6,812

 

Credit loss expense

7,797

 

 

21,395

 

Other operating activities, net

10

 

 

(12)

 

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

(17,715)

 

 

(34,131)

 

Prepaid expenses and other current assets

(18,820)

 

 

4,145

 

Deferred commissions

(49,798)

 

 

(48,704)

 

Accounts payable and other liabilities

(27,912)

 

 

47,341

 

Lease liabilities

(23,596)

 

 

(21,247)

 

Income taxes payable

(3,583)

 

 

(9,838)

 

Deferred revenue

15,800

 

 

7,123

 

Other assets

2,150

 

 

1,521

 

Net cash provided by operating activities

319,218

 

 

355,338

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from sale and settlement of investments

 

 

10,259

 

Proceeds from sale of property and equipment and other assets

245

 

 

 

Purchase of Richmond assets and other intangibles

(123,623)

 

 

 

Purchases of property and equipment and other assets

(21,533)

 

 

(42,137)

 

Cash paid for acquisitions, net of cash acquired

(152,594)

 

 

(192,002)

 

Net cash used in investing activities

(297,505)

 

 

(223,880)

 

 

 

 

 

Financing activities:

 

 

 

Proceeds from long-term debt

 

 

1,744,210

 

Payments of debt issuance costs

 

 

(15,747)

 

Payments of long-term debt

 

 

(745,000)

 

Repurchase of restricted stock to satisfy tax withholding obligations

(29,306)

 

 

(34,051)

 

Proceeds from equity offering, net of transaction costs

 

 

1,689,971

 

Proceeds from exercise of stock options and employee stock purchase plan

15,025

 

 

28,169

 

Other financing activities

(57)

 

 

(1,650)

 

Net cash (used in) provided by financing activities

(14,338)

 

 

2,665,902

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

(1,700)

 

 

(286)

 

Net increase in cash, cash equivalents and restricted cash

5,675

 

 

2,797,074

 

Cash, cash equivalents and restricted cash at the beginning of period

3,755,912

 

 

1,070,731

 

Cash, cash equivalents and restricted cash at the end of period

$

3,761,587

 

 

$

3,867,805

 

CoStar Group, Inc.

Disaggregated Revenues - Unaudited

(in thousands)

 

 

 

Three Months Ended September 30,

 

2021

 

2020

 

North America

 

International

 

Total

 

North America

 

International

 

Total

CoStar

$

174,071

 

 

$

9,194

 

 

$

183,265

 

 

$

158,235

 

 

$

7,753

 

 

$

165,988

 

Information Services

29,177

 

 

6,749

 

 

35,926

 

 

26,357

 

 

6,817

 

 

33,174

 

Multifamily

171,125

 

 

 

 

171,125

 

 

155,184

 

 

 

 

155,184

 

LoopNet(1)

52,103

 

 

424

 

 

52,527

 

 

44,938

 

 

146

 

 

45,084

 

Residential(1)

24,747

 

 

 

 

24,747

 

 

 

 

 

 

 

Other Marketplaces(1)

31,729

 

 

 

 

31,729

 

 

26,190

 

 

 

 

26,190

 

Total revenues

$

482,952

 

 

$

16,367

 

 

$

499,319

 

 

$

410,904

 

 

$

14,716

 

 

$

425,620

 

__________________________

 

 

 

 

 

 

 

 

 

 

(1) As of September 30, 2021, Commercial Property and Land revenue has been further disaggregated into LoopNet, Residential and Other Marketplaces.

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

2021

 

2020

 

North America

 

International

 

Total

 

North America

 

International

 

Total

CoStar

$

505,470

 

 

$

26,958

 

 

$

532,428

 

 

$

473,363

 

 

$

22,634

 

 

$

495,997

 

Information Services

84,959

 

 

20,820

 

 

105,779

 

 

77,069

 

 

19,023

 

 

96,092

 

Multifamily

508,629

 

 

 

 

508,629

 

 

438,185

 

 

 

 

438,185

 

LoopNet(1)

151,770

 

 

1,082

 

 

152,852

 

 

131,348

 

 

256

 

 

131,604

 

Residential(1)

53,939

 

 

 

 

53,939

 

 

 

 

 

 

 

Other Marketplaces(1)

83,722

 

 

 

 

83,722

 

 

52,748

 

 

 

 

52,748

 

Total revenues

$

1,388,489

 

 

$

48,860

 

 

$

1,437,349

 

 

$

1,172,713

 

 

$

41,913

 

 

$

1,214,626

 

__________________________

 

 

 

 

 

 

 

 

 

 

(1) As of September 30, 2021, Commercial Property and Land revenue has been further disaggregated into LoopNet, Residential and Other Marketplaces.

CoStar Group, Inc.

Results of Segments - Unaudited

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

EBITDA

 

 

 

 

 

 

 

North America

$

119,823

 

 

$

107,906

 

 

$

385,857

 

 

$

322,611

 

International

2,849

 

 

579

 

 

5,683

 

 

(4,708)

 

Total EBITDA

$

122,672

$

108,485

$

391,540

$

317,903

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures with 2020-2021 Quarterly Results - Unaudited

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

 

 

 

 

 

 

 

 

 

 

Net income

 

$72.8

$60.4

$58.2

$35.8

 

$74.2

$61.1

$64.3

Income tax expense

 

5.6

16.9

10.7

10.7

 

19.1

32.8

19.0

Income before income taxes

 

78.4

77.3

68.9

46.4

 

93.3

93.9

83.3

Amortization of acquired intangible assets

 

17.5

21.0

24.9

24.8

 

25.8

25.3

26.3

Stock-based compensation expense

 

15.2

9.5

16.7

12.7

 

15.5

15.1

16.3

Acquisition and integration related costs

 

8.7

10.0

7.9

65.9

 

8.5

2.0

5.0

Restructuring and related costs

 

0.4

 

Other expense

 

0.1

 

1.1

0.8

0.9

Non-GAAP income before income taxes

 

119.8

117.8

118.9

149.8

 

144.2

137.1

131.8

Assumed rate for income tax expense (1)

 

25%

25%

25%

25%

 

25%

25%

25%

Assumed provision for income tax expense

 

(30.0)

(29.5)

(29.7)

(37.5)

 

(36.0)

(34.3)

(33.0)

Non-GAAP net income

 

$89.8

$88.3

$89.2

$112.3

 

$108.2

$102.8

$98.8

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share - diluted(2)

 

$0.24

$0.23

$0.23

$0.29

 

$0.27

$0.26

$0.25

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic(2)

 

364.7

375.2

391.6

391.4

 

391.6

392.3

392.4

Weighted average outstanding shares - diluted(2)

 

367.8

377.3

394.0

394.0

 

393.7

394.1

394.3

__________________________

 

 

 

 

 

 

 

 

 

(1) A 25% tax rate is assumed for 2021 and 2020, which approximates our statutory federal and state corporate tax rate.

(2) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

 

 

 

 

 

 

 

 

 

 

Net income

 

$72.8

$60.4

$58.2

$35.8

 

$74.2

$61.1

$64.3

Amortization of acquired intangible assets

 

17.5

21.0

24.9

24.8

 

25.8

25.3

26.3

Depreciation and other amortization

 

6.8

7.0

6.8

8.2

 

8.5

7.0

6.6

Interest (income) expense

 

(1.7)

3.6

7.5

7.9

 

7.9

7.9

7.9

Other (income) expense

 

(0.8)

0.4

0.3

0.9

 

0.1

(0.8)

(1.5)

Income tax expense

 

5.6

16.9

10.7

10.7

 

19.1

32.8

19.0

EBITDA

 

$100.2

$109.3

$108.4

$88.3

 

$135.6

$133.3

$122.6

Stock-based compensation expense

 

15.1

9.5

16.7

12.7

 

15.5

15.1

16.3

Acquisition and integration related costs

 

8.7

10.0

7.9

65.9

 

8.5

2.0

5.0

Restructuring and related costs

 

0.4

 

Adjusted EBITDA

 

$124.0

$128.8

$133.4

$166.9

 

$159.6

$150.4

$143.9

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 Year Ending

 

Ending December 31, 2021

 

December 31, 2021

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

Net income

$

76,000

 

 

$

80,000

 

 

$

276,000

 

 

$

280,000

 

Income tax expense

25,000

 

 

26,000

 

 

96,000

 

 

97,000

 

Income before income taxes

101,000

 

 

106,000

 

 

372,000

 

 

377,000

 

Amortization of acquired intangible assets

26,000

 

 

26,000

 

 

103,000

 

 

103,000

 

Stock-based compensation expense

17,000

 

 

17,000

 

 

64,000

 

 

64,000

 

Acquisition and integration related costs

2,000

 

 

2,000

 

 

17,000

 

 

17,000

 

Other expense

5,000

 

 

5,000

 

 

8,000

 

 

8,000

 

Non-GAAP income before income taxes

151,000

 

 

156,000

 

 

564,000

 

 

569,000

 

Assumed rate for income tax expense(1)

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

(37,800)

 

 

(39,000)

 

 

(141,000)

 

 

(142,300)

 

Non-GAAP net income

$

113,200

 

 

$

117,000

 

 

$

423,000

 

 

$

426,700

 

 

 

 

 

 

 

 

 

Net income per share - diluted(2)

$

0.19

 

 

$

0.20

 

 

$

0.70

 

 

$

0.71

 

Non-GAAP net income per share - diluted(2)

$

0.29

 

 

$

0.30

 

 

$

1.07

 

 

$

1.08

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - diluted(2)

394,400

 

 

394,400

 

 

394,000

 

 

394,000

 

__________________________

 

 

 

 

 

 

 

(1) A 25% tax rate is assumed, which approximates our statutory federal and state corporate tax rate.

(2) Prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021.

 

 

 

 

 

 

 

 

Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA

 

 

 

 

 

Guidance Range

 

Guidance Range

 

For the Three Months

 

For the Year Ending

 

Ending December 31, 2021

 

December 31, 2021

 

Low

 

High

 

Low

 

High

Net income

$

76,000

 

 

$

80,000

 

 

$

276,000

 

 

$

280,000

 

Amortization of acquired intangible assets

26,000

 

 

26,000

 

 

103,000

 

 

103,000

 

Depreciation and other amortization

8,000

 

 

8,000

 

 

30,000

 

 

30,000

 

Interest expense

8,000

 

 

8,000

 

 

32,000

 

 

32,000

 

Other (income)

(1,000)

 

 

(1,000)

 

 

(3,000)

 

 

(3,000)

 

Income tax expense

25,000

 

 

26,000

 

 

96,000

 

 

97,000

 

Stock-based compensation expense

17,000

 

 

17,000

 

 

64,000

 

 

64,000

 

Acquisition and integration related costs

2,000

 

 

2,000

 

 

17,000

 

 

17,000

 

Adjusted EBITDA

$

161,000

 

 

$

166,000

 

 

$

615,000

 

 

$

620,000

 

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. STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality sector. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com 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. Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homes.com offers real estate professionals advertising and marketing services for residential properties. Realla is the UK’s most comprehensive commercial property digital marketplace. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe, Canada and Asia with a staff of approximately 4,800 worldwide, including the industry’s largest professional research organization. For more information, visit www.costargroup.com.

This news release and the Company’s earnings conference call contain “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 plans, objectives, expectations, beliefs 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 many risks and uncertainties. Actual results may differ materially from the results anticipated in the forward-looking statements and the assumptions and estimates used as a basis for 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 or in the earnings conference call cannot or will not be sustained at the current pace or may increase or decrease or expectations are not met, including trends and expectations related to revenue, net income, non-GAAP net income, EBITDA, adjusted EBITDA, adjusted EBITDA margin, gross margin, sales, net new bookings, site traffic and visitors, leads, and renewal rates; the risk that pricing adjustments for Apartments.com do not achieve the anticipated results, including capturing the value of the lead flow delivered; the risk that the Company is unable to sustain current revenue and earnings, including CoStar, Ten-X and Homesnap revenue growth rates or increase them; the risk that the Company is unable to sustain current CoStar net new bookings; the risk that revenues for the fourth quarter and full year 2021 will not be as stated in this press release; the risk that net income for the fourth quarter and full year 2021 will not be as stated in this press release; the risk that adjusted EBITDA for the fourth quarter and full year 2021 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 2021 will not be as stated in this press release; the risk that the tax rate estimates stated in this press release may change; uncertainty surrounding the impact of the COVID-19 pandemic, including volatility in the international and U.S. economy and the commercial real estate industry, employee attrition, absenteeism or decreased productivity, quarantines or other travel or health-related restrictions; the length and severity of the COVID-19 pandemic; the pace of recovery following the COVID-19 pandemic; and government and private actions taken to control the spread of COVID-19. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar Group’s filings from time to time with the Securities and Exchange Commission, including in CoStar Group’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar Group’s other filings with the SEC (including Current Reports on Form 8-K) available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar Group on the date hereof, and CoStar Group assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts

Investor Relations:

Bill Warmington

Vice President

CoStar Group Investor Relations

(202) 346-5661

wwarmington@costar.com



News Media:

Matthew Blocher

Vice President

CoStar Group Corporate Marketing & Communications

(202) 346-6775

mblocher@costargroup.com

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