CoStar’s Q4 Earnings Boosted by Homes.com & AI, Eyes M&A for Future Growth

CoStar reported $900M Q4 income (27% boost) and $47M take-home pay. Execs highlight Homes.com growth (31k agents, $100M annualized revenue) and AI's potential in home search. They plan a $700M stock buyback in 2026, signaling strong M&A appetite.

The business reported $900 million in income in Q4, a 27% boost from a year earlier and CoStar’s 59th consecutive quarter of double-digit year-over-year development. Take-home pay recoiled to $47 million complying with a $31 million loss in the third quarter.

Earnings accelerated once more at CoStar in the fourth quarter, and execs made use of a Feb. 24 earnings phone call to argue that its biggest wagers– particularly on Homes.com and expert system– are readied to improve the landscape in the affordable home search room.

Homes.com Network Performance

Homes.com energy: The Homes.com Network now has more than 31,000 agent clients producing regarding $100 million in annualized profits, with 76% on annual contracts, according to the firm’s earnings materials.

Apartments.com vs. opponents: On the other hand Apartments.com’s performance with competitors, Florance highlighted website traffic dips at rival rental systems and slammed what he referred to as “shotgunning leads”– a method where occupants are encouraged to speak to several residential or commercial properties at once. While that method may blow up lead matters, Florance suggested it minimizes top quality and conversion prices for property supervisors.

M&A & Q1 Financial Projections

M&A passion and opportunities: On prospective purchase chances, Florance stated CoStar has “a lot on our plate right now” and is concentrated on executing present initiatives. There are “loads, if not 100 possibilities out there,” he added, signaling continued appetite for critical bargains.

Q1 overview: CoStar expects Q1 2026 profits in between $890 million and $900 million and changed EBITDA between $95 million and $115 million. Furthermore, after finishing a $500 million stock buyback in 2025, the company plans to buy $700 million well worth of shares in 2026 under its $1.5 billion authorization.

AI’s Impact on Home Search

Residences AI might redefine search: Throughout today’s phone call with capitalists, chief executive officer Andy Florance invested much of his time concentrated on Homes AI, the business’s newly released AI-powered home search user interface. Early inner information reveals individuals who engage with the AI setting spend substantially more time on the site and submit even more leads, he stated.

Lown was also inquired about Matterport, which CoStar got in 2024. He described that, after the procurement, CoStar removed “a number of duplicative public firm costs”– largely in executive payment and related cash/equity costs, which he approximated to be around $120 million.

During the Feb. 24 telephone call, executives expressed proceeded optimism about the potential of both Homes.com and Apartments.com. “We feel great concerning business and the trajectory we’re on,” Principal Financial Policeman Chris Lown claimed.

“I think that it’s mosting likely to be something that a year from currently individuals are not mosting likely to be able to picture the old way of interfacing with a web site,” Florance stated of the experience, which runs via a natural language design.