CSGP
$819.81
Costar Group
($2.24)
(.27%)
Earnings Details
2nd Quarter June 2020
Tuesday, July 28, 2020 4:16:00 PM
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Summary

Costar Group Beats

Costar Group (CSGP) reported 2nd Quarter June 2020 earnings of $2.43 per share on revenue of $397.2 million. The consensus earnings estimate was $2.00 per share on revenue of $389.8 million. The Earnings Whisper number was $2.10 per share. Revenue grew 15.5% on a year-over-year basis.

The company said it expects third quarter earnings of $2.00 to $2.10 per share on revenue of $415.0 million to $420.0 million and 2020 earnings of $9.22 to $9.42 per share on revenue of $1.63 billion to $1.64 billion. The current consensus earnings estimate is $2.13 per share on revenue of $408.9 million for the quarter ending September 30, 2020 and $9.11 per share on revenue of $1.61 billion for the year ending December 31, 2020.

CoStar Group Inc is a provider of information services to the commercial real estate industry in the United States and United Kingdom. Its services include CoStar Property Professional service that offers inventory of office, industrial & retail.

Results
Reported Earnings
$2.43
Earnings Whisper
$2.10
Consensus Estimate
$2.00
Reported Revenue
$397.2 Mil
Revenue Estimate
$389.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CoStar Group Second Quarter 2020 Revenues Increase 16% Year-over-Year with June Sales Reaching All Time Record of $22 Million While Cash Position Exceeds $3.5 Billion

WASHINGTON--(BUSINESS WIRE)--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 June 30, 2020, was $397 million, an increase of 16% over revenue of $344 million for the second quarter of 2019. Net income for the second quarter of 2020 was $60 million, or $1.60 per diluted share. Adjusted EBITDA (which excludes stock-based compensation, acquisition and integration related costs and other items as described below) for the second quarter of 2020 was $129 million, an increase of 17% compared to adjusted EBITDA of $110 million for the second quarter of 2019.

“Our team delivered an outstanding set of results in the second quarter as we grew revenue 16%, increased adjusted EBITDA by 17%, set a record sales month, raised $2.7 billion dollars in the equity and debt markets and acquired Ten-X – all while working 100% from remote locations,” said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “Our results indicate that our business is not only resilient but is in fact clearly countercyclical. Traffic to our Apartments.com and LoopNet marketplaces are at record levels, exceeding pre-pandemic levels. We had 62 million monthly unique visitors on our platforms in the second quarter, an increase of 13% over our record traffic levels of 55 million monthly unique visitors reached in the first quarter of 2020.”

Florance continued, “We generated company-wide net new sales bookings of $35 million in the second quarter of 2020, with sales levels increasing each month to a record $22 million of annualized net new sales in June. Our Apartments.com platform delivered record sales, traffic and revenue in the second quarter, once again demonstrating that our solutions are mission critical to our clients, and even more so in an environment of limited person-to-person contact. Our increased brand marketing campaign is producing strong results, generating over three billion impressions in the second quarter, an increase of 57% over the second quarter of 2019. Our investment to create higher levels of brand awareness is driving record sales results.”

 

Year 2019-2020 Quarterly Results - Unaudited

(in millions, except per share data)

 

2019

 

2020

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$328

 

$344

 

$353

 

$375

 

$392

 

$397

Net income

85

 

63

 

79

 

88

 

73

 

60

Net income per share - diluted

2.33

 

1.73

 

2.15

 

2.39

 

1.98

 

1.60

Weighted average outstanding shares - diluted

36.6

 

36.6

 

36.7

 

36.7

 

36.8

 

37.7

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

113

 

94

 

113

 

125

 

100

 

109

Adjusted EBITDA

125

 

110

 

129

 

142

 

124

 

129

Non-GAAP net income

92

 

82

 

96

 

103

 

90

 

88

Non-GAAP net income per share - diluted

2.53

 

2.23

 

2.61

 

2.82

 

2.44

 

2.34

 

Non-GAAP net income (which excludes amortization of acquired intangible assets, stock-based compensation and other items as described below) for the second quarter of 2020 was $88 million or $2.34 per diluted share.

2020 Outlook

With our strong financial results in the second quarter and the initial disruption from the COVID-19 pandemic behind us, we are reinstating guidance for the full year 2020.

The Company expects revenue in the range of $1.63 billion to $1.64 billion for the full year of 2020, representing growth of approximately 17% for the year. This guidance includes an estimated partial year 2020 revenue contribution from Ten-X of $25 to $30 million. We expect revenue for the third quarter of 2020 in the range of $415 million to $420 million, representing revenue growth of 18% year-over-year at the midpoint of the range.

The Company expects adjusted EBITDA in a range of $515 million to $525 million for the full year of 2020, an increase of 3% at the midpoint of the range compared to 2019. Ten-X is not expected to have a material impact on adjusted EBITDA in the second half of 2020. For the third quarter of 2020, the Company expects adjusted EBITDA in a range of $120 million to $125 million.

We expect full-year 2020 non-GAAP net income per diluted share in a range of $9.22 to $9.42 based on 38.3 million shares. For the third quarter of 2020, we expect non-GAAP net income per diluted share in a range of $2.00 to $2.10 based on 39.4 million shares. These ranges include an estimated non-GAAP tax rate of 25% for the full year and the third quarter.

The preceding guidance does not include any operating results from the proposed RentPath acquisition.

The preceding forward-looking statements reflect CoStar Group’s expectations as of July 28, 2020, 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, 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 for pending and completed acquisitions, 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 for pending and completed acquisitions, 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 2020, 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 at 5:00 PM EDT on Tuesday, July 28, 2020 to discuss earnings results for the second quarter 2020 and the Company’s outlook. The audio portion of the conference call will be broadcast live over the Internet at investors.costargroup.com. To join the conference call by telephone, please dial (833) 714-0936 (from the United States and Canada) or +1 778 560 2890 (from all other countries) and refer to access code 9066087. The webcast replay will also be available in the Investor section of CoStar Group's 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
June 30,

Six Months Ended
June 30,

 

2020

2019

2020

2019

 

 

 

 

 

Revenues

$

397,159

 

$

343,760

$

789,006

 

$

672,185

Cost of revenues

 

74,040

 

 

71,918

 

152,949

 

 

143,071

Gross profit

 

323,119

 

 

271,842

 

636,057

 

 

529,114

 

 

 

 

 

Operating expenses:

 

 

 

 

Selling and marketing (excluding customer base amortization)

 

130,461

 

 

119,075

 

255,568

 

 

207,169

Software development

 

39,001

 

 

28,455

 

80,611

 

 

56,383

General and administrative

 

57,403

 

 

42,337

 

116,276

 

 

82,413

Customer base amortization

 

14,935

 

 

7,175

 

26,419

 

 

14,857

 

 

241,800

 

 

197,042

 

478,874

 

 

360,822

 

 

 

 

 

Income from operations

 

81,319

 

 

74,800

 

157,183

 

 

168,292

Interest (expense) income

 

(3,596

)

 

4,678

 

(1,945

)

 

8,890

Other (expense) income

 

(474

)

 

538

 

367

 

 

539

Income before income taxes

 

77,249

 

 

80,016

 

155,605

 

 

177,721

Income tax expense

 

16,889

 

 

16,768

 

22,452

 

 

29,304

Net income

$

60,360

 

$

63,248

$

133,153

 

$

148,417

 

 

 

 

 

Net income per share - basic

$

1.61

 

$

1.74

$

3.60

 

$

4.09

Net income per share - diluted

$

1.60

 

$

1.73

$

3.57

 

$

4.06

 

 

 

 

 

Weighted average outstanding shares - basic

 

37,524

 

 

36,310

 

36,998

 

 

36,273

Weighted average outstanding shares - diluted

 

37,734

 

 

36,627

 

37,256

 

 

36,597

 
 

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
June 30,

Six Months Ended
June 30,

 

2020

 

2019

 

2020

 

2019

Net income

$

60,360

 

$

63,248

 

$

133,153

 

$

148,417

 

Income tax expense

 

16,889

 

 

16,768

 

 

22,452

 

 

29,304

 

Income before income taxes

 

77,249

 

 

80,016

 

 

155,605

 

 

177,721

 

Amortization of acquired intangible assets

 

20,989

 

 

12,208

 

 

38,478

 

 

25,403

 

Stock-based compensation expense

 

9,527

 

 

13,816

 

 

24,707

 

 

25,845

 

Acquisition and integration related costs

 

10,031

 

 

492

 

 

18,744

 

 

741

 

Restructuring and related costs

 

 

 

2,180

 

 

 

 

2,248

 

Non-GAAP income before income taxes

 

117,796

 

 

108,712

 

 

237,534

 

 

231,958

 

Assumed rate for income tax expense *

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(29,449

)

 

(27,178

)

 

(59,384

)

 

(57,989

)

Non-GAAP net income

$

88,347

 

$

81,534

 

$

178,150

 

$

173,969

 

 

 

 

 

 

Net income per share - diluted

$

1.60

 

$

1.73

 

$

3.57

 

$

4.06

 

Non-GAAP net income per share - diluted

$

2.34

 

$

2.23

 

$

4.78

 

$

4.75

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

37,524

 

 

36,310

 

 

36,998

 

 

36,273

 

Weighted average outstanding shares - diluted

 

37,734

 

 

36,627

 

 

37,256

 

 

36,597

 

 

 

 

 

 

* A 25% tax rate is assumed for 2020 and 2019, which approximates our statutory corporate tax rate.

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

Three Months Ended
June 30,

Six Months Ended
June 30,

 

2020

2019

2020

2019

Net income

$

60,360

 

$

63,248

 

$

133,153

 

$

148,417

 

Amortization of acquired intangible assets in cost of revenues

 

6,054

 

 

5,033

 

 

12,059

 

 

10,546

 

Amortization of acquired intangible assets in operating expenses

 

14,935

 

 

7,175

 

 

26,419

 

 

14,857

 

Depreciation and other amortization

 

6,990

 

 

6,546

 

 

13,757

 

 

13,010

 

Interest expense (income)

 

3,596

 

 

(4,678

)

 

1,945

 

 

(8,890

)

Other expense (income)

 

474

 

 

(538

 

(367

)

 

(539

Income tax expense

 

16,889

 

 

16,768

 

 

22,452

 

 

29,304

 

EBITDA

$

109,298

 

$

93,554

 

$

209,418

 

$

206,705

 

Stock-based compensation expense

 

9,527

 

 

13,816

 

 

24,707

 

 

25,845

 

Acquisition and integration related costs

 

10,031

 

 

492

 

 

18,744

 

 

741

 

Restructuring and related costs

 

 

 

2,180

 

 

 

 

2,248

 

Adjusted EBITDA

$

128,856

 

$

110,042

 

$

252,869

 

$

235,539

 

 

 

CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)

 

 

 

 

June 30,
2020

December 31,
2019

ASSETS

 

 

Current assets:

 

 

Cash, cash equivalents and restricted cash

$

3,548,405

 

$

1,070,731

 

Accounts receivable

 

127,030

 

 

96,788

 

Less: Allowance for credit losses

 

(13,363

)

 

(4,548

)

Accounts receivable, net

 

113,667

 

 

92,240

 

Prepaid expenses and other current assets

 

28,576

 

 

36,194

 

Total current assets

 

3,690,648

 

 

1,199,165

 

 

 

 

Long-term investments

 

 

 

10,070

 

Deferred income taxes, net

 

4,372

 

 

5,408

 

Property and equipment, net

 

104,316

 

 

107,529

 

Lease right-of-use assets

 

112,641

 

 

115,084

 

Goodwill

 

2,009,117

 

 

1,882,020

 

Intangible assets, net

 

437,550

 

 

421,196

 

Deferred commission costs, net

 

91,712

 

 

89,374

 

Deposits and other assets

 

13,868

 

 

9,232

 

Income tax receivable

 

14,806

 

 

14,908

 

Total assets

$

6,479,030

 

$

3,853,986

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

Current liabilities:

 

 

Accounts payable

$

26,864

 

$

7,640

 

Accrued wages and commissions

 

56,748

 

 

53,087

 

Accrued expenses

 

45,726

 

 

38,680

 

Income taxes payable

 

22,764

 

 

10,705

 

Lease liabilities

 

30,905

 

 

29,670

 

Deferred revenue

 

80,358

 

 

67,274

 

Total current liabilities

 

263,365

 

 

207,056

 

 

 

 

Long-term debt

 

745,000

 

 

 

Deferred income taxes, net

 

93,934

 

 

87,096

 

Income taxes payable

 

20,738

 

 

20,521

 

Lease and other long-term liabilities

 

131,672

 

 

133,720

 

Total liabilities

$

1,254,709

 

$

448,393

 

 

 

 

Total CoStar, Inc. stockholders’ equity

 

5,224,321

 

 

3,405,593

 

Total liabilities and stockholders’ equity

$

6,479,030

 

$

3,853,986

 

 
 

CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)

 

 

 

Six Months Ended
June 30,

 

2020

2019

Operating activities:

 

 

Net income

$

133,153

 

$

148,417

 

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

 

 

Depreciation and amortization

 

52,235

 

 

38,413

 

Amortization of deferred commissions costs

 

29,662

 

 

25,550

 

Amortization of debt issuance costs

 

508

 

 

438

 

Realized loss on investments

 

541

 

 

 

Non-cash lease expense

 

12,400

 

 

10,859

 

Stock-based compensation expense

 

24,053

 

 

25,845

 

Deferred income taxes, net

 

3,569

 

 

6,359

 

Credit loss expense

 

15,688

 

 

5,224

 

Foreign currency, net

 

(789

)

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

Accounts receivable

 

(37,364

)

 

(10,898

)

Income taxes payable

 

12,328

 

 

(5,577

)

Prepaid expenses and other current assets

 

4,371

 

 

1,751

 

Deferred commissions

 

(32,122

)

 

(33,397

)

Other assets

 

(6,757

)

 

236

 

Accounts payable and other liabilities

 

37,793

 

 

22,691

 

Lease liabilities

 

(14,126

)

 

(12,977

)

Deferred revenue

 

13,503

 

 

10,633

 

Net cash provided by operating activities

 

248,646

 

 

233,567

 

 

 

 

Investing activities:

 

 

Proceeds from sale and settlement of investments

 

10,259

 

 

 

Purchases of property and equipment and other assets

 

(12,782

)

 

(14,387

)

Cash paid for acquisitions, net of cash acquired

 

(184,502

)

 

(13,721

)

Net cash used in investing activities

 

(187,025

)

 

(28,108

)

 

 

 

Financing activities:

 

 

Proceeds from long-term debt

 

745,000

 

 

 

Repurchase of restricted stock to satisfy tax withholding obligations

 

(33,653

)

 

(24,225

)

Proceeds from equity offering, net of transaction costs

 

1,690,148

 

 

 

Proceeds from exercise of stock options and employee stock purchase plan

 

16,513

 

 

16,695

 

Other financing activities

 

(1,650

)

 

(123

)

Net cash provided by (used in) financing activities

 

2,416,358

 

 

(7,653

)

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

(305

)

 

(410

)

Net increase in cash, cash equivalents and restricted cash

 

2,477,674

 

 

197,396

 

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

 

1,070,731

 

 

1,100,416

 

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

$

3,548,405

 

$

1,297,812

 

 
 

CoStar Group, Inc.

Disaggregated Revenues - Unaudited

(in thousands)

 

 

 

Three Months Ended June 30,

 

2020

 

2019

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

CoStar Suite

$

157,793

$

7,260

$

165,053

$

145,910

$

6,915

 

$

152,825

Information services

 

25,022

 

5,514

 

30,536

 

18,659

 

2,118

 

 

20,777

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

145,541

 

 

145,541

 

120,488

 

 

 

120,488

Commercial property and land

 

56,006

 

23

 

56,029

 

49,505

 

165

 

 

49,670

Total revenues

$

384,362

$

12,797

$

397,159

$

334,562

$

9,198

 

$

343,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

2020

 

2019

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

CoStar Suite

$

315,128

 

$

14,881

 

$

330,009

 

$

286,883

 

$

13,643

 

$

300,526

Information services

 

50,712

 

 

12,206

 

 

62,918

 

 

35,250

 

 

4,377

 

 

39,627

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

283,001

 

 

 

 

283,001

 

 

234,756

 

 

 

 

234,756

Commercial property and land

 

112,968

 

 

110

 

 

113,078

 

 

96,910

 

 

366

 

 

97,276

Total revenues

$

761,809

 

$

27,197

 

$

789,006

 

$

653,799

 

$

18,386

 

$

672,185

 
 

CoStar Group, Inc.

Results of Segments - Unaudited

(in thousands)

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2020

 

2019

 

2020

 

2019

EBITDA

 

 

 

 

North America

$

112,292

 

$

95,001

 

$

214,705

 

$

210,269

 

International

 

(2,994

)

 

(1,447

)

 

(5,287

)

 

(3,564

)

Total EBITDA

$

109,298

 

$

93,554

 

$

209,418

 

$

206,705

 

 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures with 2019-2020 Quarterly Results - Unaudited

(in millions, except per share data)

 

 

 

 

 

 

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

 

 

 

 

 

 

2019

 

2020

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

 

 

 

 

 

 

Net income

$85.2

 

$63.2

 

$78.6

 

$87.9

 

$72.8

 

$60.4

 

Income tax expense

12.5

 

16.8

 

20.3

 

26.4

 

5.6

 

16.9

 

Income before income taxes

97.7

 

80.0

 

98.9

 

114.3

 

78.4

 

77.2

 

Amortization of acquired intangible assets

13.2

 

12.2

 

12.5

 

17.4

 

17.5

 

21.0

 

Stock-based compensation expense

12.0

 

13.8

 

13.1

 

13.3

 

15.2

 

9.5

 

Acquisition and integration related costs

0.2

 

0.5

 

2.3

 

3.7

 

8.7

 

10.0

 

Restructuring and related costs

0.1

 

2.2

 

0.8

 

 

 

 

Settlements and impairments

 

 

 

(10.8

)

 

 

Non-GAAP income before income taxes

123.2

 

108.7

 

127.6

 

137.9

 

119.8

 

117.7

 

Assumed rate for income tax expense *

25

%

25

%

25

%

25

%

25

%

25

%

Assumed provision for income tax expense

(30.8

)

(27.2

)

(31.9

)

(34.5

)

(30.0

)

(29.4

)

Non-GAAP net income

$92.4

 

$81.5

 

$95.7

 

$103.4

 

$89.8

 

$88.3

 

 

 

 

 

 

 

 

Non-GAAP net income per share - diluted

$2.53

 

$2.23

 

$2.61

 

$2.82

 

$2.44

 

$2.34

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

36.2

 

36.3

 

36.3

 

36.4

 

36.5

 

37.5

 

Weighted average outstanding shares - diluted

36.6

 

36.6

 

36.7

 

36.7

 

36.8

 

37.7

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed for 2020 and 2019, which approximates our statutory corporate tax rate.

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

2019

 

2020

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

 

 

 

 

 

 

Net income

$85.2

 

$63.2

 

$78.6

 

$87.9

 

$72.8

 

$60.4

 

Amortization of acquired intangible assets

13.2

 

12.2

 

12.5

 

17.4

 

17.5

 

21.0

 

Depreciation and other amortization

6.5

 

6.5

 

6.3

 

6.5

 

6.8

 

7.0

 

Interest (income) expense

(4.2

)

(4.7

)

(4.4

)

(3.4

)

(1.7

)

3.6

 

Other (income) expense

 

(0.5

)

(0.2

)

(9.9

)

(0.8

)

0.4

 

Income tax expense

12.5

 

16.8

 

20.3

 

26.4

 

5.6

 

16.9

 

EBITDA

$113.2

 

$93.5

 

$113.0

 

$124.9

 

$100.2

 

$109.3

 

Stock-based compensation expense

12.0

 

13.8

 

13.1

 

13.3

 

15.1

 

9.5

 

Acquisition and integration related costs

0.2

 

0.5

 

2.3

 

3.7

 

8.7

 

10.0

 

Restructuring and related costs

0.1

 

2.2

 

0.8

 

 

 

 

Adjusted EBITDA

$125.5

 

$110.0

 

$129.2

 

$141.9

 

$124.0

 

$128.8

 

 
 

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

 

 

For the Three Months

For the Twelve Months

 

Ended September 30, 2020

Ended December 31, 2020

 

Low

High

Low

High

 

 

 

 

 

Net income

$

39,000

 

$

45,000

 

$

239,000

 

$

250,000

 

Income tax expense

 

10,000

 

 

11,000

 

 

53,000

 

 

56,000

 

Income before income taxes

 

49,000

 

 

56,000

 

 

292,000

 

 

306,000

 

Amortization of acquired intangible assets

 

25,000

 

 

25,000

 

 

87,000

 

 

87,000

 

Stock-based compensation expense

 

15,000

 

 

14,000

 

 

55,000

 

 

53,000

 

Acquisition and integration related costs

 

16,000

 

 

15,000

 

 

37,000

 

 

35,000

 

Non-GAAP income before income taxes

 

105,000

 

 

110,000

 

 

471,000

 

 

481,000

 

Assumed rate for income tax expense *

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(26,300

)

 

(27,400

)

 

(118,000

)

 

(120,300

)

Non-GAAP net income

$

78,700

 

$

82,600

 

$

353,000

 

$

360,700

 

 

 

 

 

 

Net income per share - diluted

$

0.99

 

$

1.14

 

$

6.24

 

$

6.53

 

Non-GAAP net income per share - diluted

$

2.00

 

$

2.10

 

$

9.22

 

$

9.42

 

 

 

 

 

 

Weighted average outstanding shares - diluted

 

39,400

 

 

39,400

 

 

38,300

 

 

38,300

 

 

 

 

 

 

* A 25% tax rate is assumed, which approximates our statutory corporate tax rate.

 

 

 

 

 

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

 

 

 

 

Guidance Range

Guidance Range

 

For the Three Months

For the Twelve Months

 

Ended September 30, 2020

Ended December 31, 2020

 

Low

High

Low

High

Net income

$

39,000

 

$

45,000

 

$

239,000

 

$

250,000

 

Amortization of acquired intangible assets

 

25,000

 

 

25,000

 

 

87,000

 

 

87,000

 

Depreciation and other amortization

 

7,000

 

 

7,000

 

 

27,000

 

 

27,000

 

Interest and other expense, net

 

8,000

 

 

8,000

 

 

17,000

 

 

17,000

 

Income tax expense

 

10,000

 

 

11,000

 

 

53,000

 

 

56,000

 

Stock-based compensation expense

 

15,000

 

 

14,000

 

 

55,000

 

 

53,000

 

Acquisition and integration related costs

 

16,000

 

 

15,000

 

 

37,000

 

 

35,000

 

Adjusted EBITDA

$

120,000

 

$

125,000

 

$

515,000

 

$

525,000

 

 

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 with over 7 million monthly unique visitors. Realla is the UK’s most comprehensive commercial property digital marketplace. 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. CoStar Group’s websites attracted an average of approximately 62 million unique monthly visitors in aggregate in the second quarter of 2020. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe, Canada and Asia with a staff of over 4,200 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'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 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: uncertainty surrounding the impact of the COVID-19 pandemic, including volatility in the international and U.S. economy, worker 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; government and private actions taken to control the spread of COVID-19; 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, including trends related to revenue, net income, non-GAAP net income, EBITDA, adjusted EBITDA, site traffic and visitors, sales, renewal rates, impressions and brand awareness; the risk that the Company is unable to sustain current revenue, earnings and net new sales bookings growth rates or increase them; the risk that CoStar and Ten-X cannot be combined successfully or that the acquisition does not produce the expected results; the risk that Ten-X’s auction platform is not combined into the Company’s product offerings when and as expected; the risk that the Company’s estimated results for Ten-X, including partial year 2020 revenue contribution and adjusted EBITDA impact in the second half of 2020 will not be as expected and stated in this release; the risk that revenues for the third quarter and full year 2020 will not be as stated in this press release; the risk that net income for the third quarter and full year 2020 will not be as stated in this press release; the risk that adjusted EBITDA for the third quarter and full year 2020 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 third quarter and full year 2020 will not be as stated in this press release; the risk that the tax rate estimates stated in this press release may change; the possibility that the Company’s investment plans or strategy may change; and the possibility that the acquisition of RentPath does not close when expected or at all. 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’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2019, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Scott Wheeler
Chief Financial Officer
(202) 336-6920
swheeler@costar.com

Sarah Spray
Vice President
Investor Relations
(202) 346-6394
sspray@costar.com

Source: CoStar Group, Inc.