CoStar Q3财报：EBITDA翻倍但净新签订单仅3,700万美元同比腰斩，盘后跌约8%

Introduction & Market Context
CoStar Group (NASDAQ:CSGP) presented its third-quarter 2026 results on October 27, showcasing a stark contrast between surging profitability and weakening sales momentum that sent shares tumbling in after-hours trading. The commercial real estate data and analytics provider reported record adjusted EBITDA of $229 million while simultaneously disclosing a sharp decline in new bookings, highlighting the tension between near-term operational improvements and longer-term growth concerns.
The stock fell 7.84% in after-hours trading to $29.32 following the results, adding to a 5.01% decline during the regular session. Despite beating Wall Street’s earnings expectations with adjusted EPS of $0.38 versus estimates of $0.34, investors appeared more focused on the company’s annualized net new bookings of just $37 million—less than half the $84 million reported in the prior-year quarter.
Quarterly Performance Highlights
CoStar delivered its 62nd consecutive quarter of double-digit revenue growth, with third-quarter revenue reaching $952 million, representing a 14% year-over-year increase. The following slide presents the key financial highlights from the quarter:
The company’s two business segments showed divergent growth trajectories. The Commercial segment generated $492 million in revenue with more modest 7% year-over-year growth, while the Residential segment posted $460 million in revenue with a robust 23% increase, aided by the Zonda acquisition.
Net income turned positive at $74 million compared to a loss of $31 million in the prior-year period, demonstrating the company’s improved operational efficiency. The consolidated financial results for both the quarter and year-to-date period are detailed in the following table:
The year-to-date performance shows even stronger momentum, with revenue of $2.774 billion up 18% and adjusted EBITDA of $545 million representing a 20% margin. This progression indicates accelerating profitability as the company scales its operations and implements cost-efficiency measures.
Detailed Financial Analysis
The segment-level breakdown reveals the strategic dynamics within CoStar’s portfolio. As illustrated in the following financial summary, the Commercial and Residential segments are performing at different stages of maturity:
The Commercial Real Estate segment, while growing at a slower 7% rate in the quarter, delivered substantially higher adjusted EBITDA of $180 million with strong margins. In contrast, the faster-growing Residential segment produced $49 million in adjusted EBITDA for the quarter, reflecting ongoing investments in platforms like Homes.com.
The company’s profitability transformation becomes more apparent when examining the reconciliation from GAAP net income to adjusted EBITDA. The following reconciliation table shows how CoStar achieved its record adjusted EBITDA of $229 million:
Key adjustments include $50 million in stock-based compensation expense, $48 million in amortization of acquired intangible assets, and $32 million in depreciation. The 24% adjusted EBITDA margin in the third quarter represents a 10 percentage-point improvement from the prior year, marking the seventh consecutive quarter of margin expansion.
The company’s strong gross profit margin of 78.7% over the trailing twelve months reflects the high-margin nature of its software and data business model, providing significant operating leverage as revenue scales.
Strategic Challenges
Despite the impressive profitability metrics, CoStar faces near-term headwinds in its sales execution. Management attributed the weak $37 million in net new bookings to slower-than-expected sales-force growth and challenging market conditions in the residential real estate sector across the U.S., U.K., and Australian markets.
CEO Andy Florance acknowledged the bookings shortfall during the earnings call, stating: "Our annualized net new bookings were below our expectations, coming in at $37 million for the third quarter." He attributed the weakness to economic headwinds and sales-force capacity constraints, noting that the company can identify a large universe of prospects not being reached with current staffing levels.
The company has identified approximately $350 million in cost-efficiency opportunities, including $150 million expected in 2026 and another $200 million over the following 12 to 18 months. This focus on operational efficiency appears designed to sustain margin expansion even as revenue growth moderates.
Forward-Looking Statements
CoStar raised its full-year 2026 guidance across key metrics, signaling confidence in its ability to deliver strong results despite the bookings weakness. The updated outlook is presented in the following table:
For the full year 2026, the company now expects revenue of $3.75 billion to $3.77 billion, representing 16% growth at the midpoint. Adjusted EBITDA guidance of $820 million to $840 million implies a 22% margin for the full year, up from the prior midpoint of approximately $810 million.
The fourth-quarter outlook calls for revenue of $976 million to $996 million and adjusted EBITDA of $275 million to $295 million, with margins expected to expand to 28-30% in the period.
Breaking down the guidance by segment, the following table shows the company’s expectations for both the Commercial and Residential businesses:
The segment outlook indicates that Residential revenue growth of 24-25% for the full year will continue to outpace Commercial growth of 8-9%. However, Commercial adjusted EBITDA margins are expected to reach 36% for the full year, substantially higher than the Residential segment’s 7-8% margin.
Management reiterated its long-term target of $1.25 billion in adjusted EBITDA by 2028, suggesting confidence that current investments in sales capacity and product development will yield accelerating returns.
The company continues to advance strategic initiatives including AI-driven tenant research tools, international expansion, integration of the Zonda acquisition, and preparation for the pending Vexcel acquisition. Management indicated that sales-force growth should re-accelerate in 2027, which would support improved bookings momentum.
Market Reaction and Valuation Context
The sharp post-earnings decline extended a difficult year for CoStar shareholders, with the stock down 52% year-to-date and 59% over the past twelve months. The after-hours price of $29.32 sits near the lower end of the 52-week range of $25.89 to $78.95, leaving the company with a market capitalization of approximately $13.66 billion.
The negative market reaction despite the earnings beat and raised guidance suggests investors remain concerned about the sustainability of growth given the bookings weakness. The stock’s elevated P/E ratio of 181 reflects high expectations that may prove challenging to meet if new business generation remains constrained by sales-force capacity limitations.
However, the company maintains a strong balance sheet with more cash than debt, providing financial flexibility to continue investing in growth initiatives while pursuing operational efficiencies. The current ratio of 2.21 indicates robust short-term liquidity.
The detailed reconciliation from GAAP earnings to adjusted metrics provides transparency into the adjustments management uses to evaluate performance:
For the third quarter, the company added back $50 million in stock-based compensation, $48 million in intangible amortization, and other items to arrive at adjusted net income of $153 million, or $0.38 per diluted share. The assumed 26% tax rate for adjusted calculations provides consistency in year-over-year comparisons.
The segment-level EBITDA detail, including both historical results and forward guidance, illustrates the different profitability profiles of the Commercial and Residential businesses:
The Commercial segment is expected to generate $690 million to $700 million in adjusted EBITDA for the full year with a 36% margin, while the Residential segment should contribute $130 million to $140 million at a 7-8% margin. This divergence reflects the maturity difference between the established Commercial business and the still-developing Residential platforms.
As CoStar navigates the tension between margin expansion and growth acceleration, the coming quarters will test whether the company can rebuild sales momentum while maintaining its improved profitability trajectory. The market’s focus on bookings trends suggests investors will be watching sales-force additions and new business generation closely as key indicators of the company’s ability to sustain its long track record of double-digit revenue growth.
Full presentation:
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