COSTAR GROUP, INC. Q3 FY26 Results

CoStar Group generated outstanding profitability growth in the third quarter, delivering on our commitment to expand margins as we exit a period of investment. Adjusted EBITDA doubled year-over-year and was considerably above the high end of our $190 million to $210 million guidance range. We achieved significant additional efficiencies in the quarter, bringing total anticipated cost savings this year to approximately $150 million versus our original guidance. Our ongoing deep expense review has identified potential additional savings of at least $200 million that we believe will improve efficiency without sacrificing revenue growth. We expect to realize these over the next 12 to 18 months, keeping us on track to achieve our 2028 Adjusted EBITDA target of $1.25 billion. We are demonstrating our ability to meaningfully grow profitability and are confident in our strategy to fuel future growth. We are leveraging AI and our proprietary ground truth data, giving us a unique competitive advantage in providing value to our information clients. Furthermore, our global scale enables us to deliver best-in-class consumer-facing AI functionality on our marketplaces at significantly lower costs than our competitors. Our acquisition of Zonda and agreement to acquire Vexcel demonstrate our ability to further enhance our proprietary datasets and global scale, which are real differentiators in the world of AI. Since 1989, CoStar Group has deployed thousands of researchers in vehicles driving tens of millions of miles across hundreds of cities on multiple continents to find, document and photograph real estate, tenants, and construction. Since then, we have inspected and photographed millions of properties. This direct observation and capture of on-the-ground facts has differentiated CoStar Group from its competitors, making us the leading CRE information solution in the world. Rapid technology advances in aerial photography and lidar are enabling Vexcel to produce extremely high-resolution images and survey-grade measurements of land, houses, office buildings, industrial properties, retail properties, apartment buildings, construction sites, and other infrastructure in the built environment. Combining these high-resolution images with the rapidly evolving capabilities of AI to semantically recognize and extract information and features from properties, we believe we can capture hundreds of data fields per property, across the approximately half a billion properties captured by Vexcel, creating a transformative, new, ultra-low-cost proprietary data source that makes CoStar even more valuable, more accurate, and timelier.

For decades, Vexcel has invested in creating highly accurate geospatial data that customers rely on every day. By joining CoStar Group, we gain the scale, technology, and resources to broaden our reach, accelerate innovation, and deliver even greater value to customers worldwide.