CSGP
$895.28
Costar Group
($10.47)
(1.16%)
Earnings Details
Quarter December 2020
Tuesday, February 23, 2021 4:10:00 PM
Tweet Share Watch
Summary

Costar Group Beats

Costar Group (CSGP) reported Quarter December 2020 earnings of $2.85 per share on revenue of $444.4 million. The consensus earnings estimate was $2.41 per share on revenue of $433.8 million. The Earnings Whisper number was $2.51 per share. Revenue grew 18.6% on a year-over-year basis.

The company said it expects first quarter non-GAAP earnings of $2.33 to $2.43 per share. The current consensus earnings estimate is $2.64 per share for the quarter ending March 31, 2021. The company said it expects 2021 earnings of $10.83 to $11.03 per share on revenue of $1.925 billion to $1.945 billion. The current consensus earnings estimate is $11.42 per share on revenue of $1.91 billion for the year ending December 31, 2021.

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
$2.85
Earnings Whisper
$2.51
Consensus Estimate
$2.41
Reported Revenue
$444.4 Mil
Revenue Estimate
$433.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CoStar Group Full Year and Fourth Quarter 2020 Revenues Increased 19% Year-over-Year

Traffic to CoStar Group’s Marketplaces Grew 29% in the Fourth Quarter

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 year ended December 31, 2020, was $1.66 billion, an increase of 19% over revenue of $1.4 billion for the full year of 2019. Revenue for the fourth quarter ended December 31, 2020, was $444 million, an increase of 19% over revenue of $375 million for the fourth quarter of 2019.

Net income for the year ended December 31, 2020, was $227 million, or $5.93 per diluted share. EBITDA for the full year of 2020 was $406 million and includes one-time charges of $59.5 million related to the now terminated RentPath acquisition. Excluding these one-time charges, EBITDA for the full year of 2020 was $466 million, an increase of 5% compared to EBITDA of $445 million for the full year of 2019. Net Income, excluding the one-time charges, was approximately $271 million, or $7.08 per diluted share.

Adjusted EBITDA (which excludes stock-based compensation, acquisition and integration related costs and other items as described below) for the fourth quarter ended December 31, 2020, was $167 million, an increase of 18% compared to adjusted EBITDA of $142 million for the fourth quarter of 2019. Adjusted EBITDA for the year ended December 31, 2020 was $553 million, an increase of 9% compared to adjusted EBITDA of $507 million for the full year of 2019.

“2020 was an exceptional year for CoStar Group in many ways,” said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “Following the initial pandemic disruption early in the year, we demonstrated that our business is strongly countercyclical as our sales rebounded strongly in the second half of the year. In the fourth quarter, we delivered annualized net new sales of $49 million, bringing our total sales bookings to over $100 million in the second half of 2020. Revenue increased by over a quarter of a billion dollars in 2020. I am particularly pleased that CoStar Suite had its best sales quarter of 2020 in the fourth quarter, more than doubling the third quarter sales level. Unique visitors to our marketplaces increased by over 20% for the year and by 29% in the fourth quarter as the pandemic led more people to shop for real estate online. We raised $2.7 billion in the debt and equity markets and completed the acquisitions of Ten-X, Emporis, and Homesnap, and are well into developing additional important acquisition opportunities – all while working remotely.”

“Apartments.com turned in its strongest performance since we first launched the platform in 2015,” continued Florance, “with revenues growing 22% to almost $600 million. Apartments.com net new sales increased 35% for the year, network visits grew 20% to over 1 billion in 2020, and quality leads to our customers increased over 20%. We believe that our increased investment in marketing for Apartments.com in 2020 was a key driver in our performance and produced outstanding results.”

The LoopNet marketplace network also had a record year, with revenue growth of 20% in 2020 and average monthly unique visitors of approximately 9.4 million in the fourth quarter of 2020, an increase of 37% over the fourth quarter of 2019. Our highest ad levels — gold, diamond, and platinum — are proving to be strongly countercyclical, with revenue growing almost 50% in 2020 and net new sales increasing 100% during the year. In 2020, we invested in marketing and successfully accelerated Apartments.com growth. In 2021, we plan to significantly accelerate our investment in LoopNet’s marketing and sales force and believe we will similarly accelerate LoopNet’s growth.

Year 2019-2020 Quarterly Results - Unaudited

(in millions, except per share data)

 

2019

 

2020

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

Q4

 

 

 

 

 

 

 

 

 

 

Revenues

$328

$344

$353

$375

 

$392

$397

$426

$444

Net income

85

63

79

88

 

73

60

58

36

Net income per share - diluted

2.33

1.73

2.15

2.39

 

1.98

1.60

1.48

0.91

Weighted average outstanding shares - diluted

36.6

36.6

36.7

36.7

 

36.8

37.7

39.4

39.4

 

 

 

 

 

 

 

 

 

 

EBITDA

113

94

113

125

 

100

109

108

88

Adjusted EBITDA

125

110

129

142

 

124

129

134

167

Non-GAAP net income

92

82

96

103

 

90

88

89

112

Non-GAAP net income per share - diluted

2.53

2.23

2.61

2.82

 

2.44

2.34

2.26

2.85

Non-GAAP net income (which excludes amortization of acquired intangible assets, stock-based compensation and other items as described below) for the full year of 2020 was $380 million or $9.91 per diluted share. Non-GAAP net income for the fourth quarter of 2020 was $112 million or $2.85 per diluted share.

2021 Outlook

The Company expects revenue in the range of $1.925 billion to $1.945 billion for the full year of 2021, representing growth of approximately 17% year-over-year at the midpoint of the range. This guidance includes an estimated 2021 revenue contribution from Homesnap of approximately $50 million. We expect revenue for the first quarter of 2021 in the range of $450 million to $455 million, representing revenue growth of 15% year-over-year at the midpoint of the range.

The Company expects adjusted EBITDA in a range of $640 million to $650 million for the full year of 2021, an increase of 17% at the midpoint of the range compared to 2020. Homesnap is expected to have negative adjusted EBITDA of approximately $5 million for the year. For the first quarter of 2021, the Company expects adjusted EBITDA in a range of $140 million to $145 million.

We expect full year 2021 non-GAAP net income per diluted share in a range of $10.83 to $11.03 based on 39.7 million shares. For the first quarter of 2021, we expect non-GAAP net income per diluted share in a range of $2.33 to $2.43 based on 39.5 million shares. These ranges include an estimated non-GAAP tax rate of 25% for the full year and the first quarter 2021.

The preceding forward-looking statements reflect CoStar Group’s expectations as of February 23, 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, 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 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 EST on Tuesday, February 23, 2021 to discuss earnings results for the fourth quarter and year ended 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 participate in the conference call, please register online in advance at http://www.directeventreg.com/registration/event/6192488 . After registering, participants will receive dial-in information as well as a passcode and registrant ID. At the time of the call, participants will dial in using the numbers on the confirmation email and enter their passcode and ID, upon which they will be entered into the conference.

The webcast replay will also be available in the Investors 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
December 31,

 

Year Ended
December 31,

 

 

2020

 

2019

 

2020

 

2019

Revenues

 

$

444,393

 

 

$

374,726

 

 

$

1,659,019

 

 

$

1,399,719

 

Cost of revenues

 

78,154

 

 

74,996

 

 

308,968

 

 

289,239

 

Gross profit

 

366,239

 

 

299,730

 

 

1,350,051

 

 

1,110,480

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing (excluding customer base amortization)

 

133,576

 

 

99,845

 

 

535,778

 

 

408,596

 

Software development

 

41,573

 

 

36,580

 

 

162,916

 

 

125,602

 

General and administrative

 

118,100

 

 

50,797

 

 

299,698

 

 

178,740

 

Customer base amortization

 

17,780

 

 

11,522

 

 

62,457

 

 

33,995

 

 

 

311,029

 

 

198,744

 

 

1,060,849

 

 

746,933

 

 

 

 

 

 

 

 

 

 

Income from operations

 

55,210

 

 

100,986

 

 

289,202

 

 

363,547

 

Interest (expense) income

 

(7,914)

 

 

3,439

 

 

(17,395)

 

 

16,742

 

Other (expense) income

 

(855)

 

 

9,880

 

 

(827)

 

 

10,660

 

Income before income taxes

 

46,441

 

 

114,305

 

 

270,980

 

 

390,949

 

Income tax expense

 

10,652

 

 

26,378

 

 

43,852

 

 

75,986

 

Net income

 

$

35,789

 

 

$

87,927

 

 

$

227,128

 

 

$

314,963

 

 

 

 

 

 

 

 

 

 

Net income per share - basic

 

$

0.91

 

 

$

2.42

 

 

$

5.97

 

 

$

8.67

 

Net income per share - diluted

 

$

0.91

 

 

$

2.39

 

 

$

5.93

 

 

$

8.60

 

 

 

 

 

 

 

 

 

 

Weighted-average outstanding shares - basic

 

39,137

 

 

36,359

 

 

38,073

 

 

36,310

 

Weighted-average outstanding shares - diluted

 

39,395

 

 

36,674

 

 

38,326

 

 

36,630

 

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
December 31,

 

Year Ended
December 31,

 

 

2020

 

2019

 

2020

 

2019

Net income

 

$

35,789

 

 

$

87,927

 

 

$

227,128

 

 

$

314,963

 

Income tax expense

 

10,652

 

 

26,378

 

 

43,852

 

 

75,986

 

Income before income taxes

 

46,441

 

 

114,305

 

 

270,980

 

 

390,949

 

Amortization of acquired intangible assets

 

24,784

 

 

17,406

 

 

88,132

 

 

55,352

 

Stock-based compensation expense

 

12,667

 

 

13,271

 

 

54,104

 

 

52,255

 

Acquisition and integration related costs

 

65,892

 

 

3,651

 

 

92,523

 

 

6,679

 

Restructuring and related costs

 

 

 

 

 

413

 

 

3,054

 

Other (income) expense

 

 

 

(10,750)

 

 

113

 

 

(10,750)

 

Non-GAAP income before income taxes

 

149,784

 

 

137,883

 

 

506,265

 

 

497,539

 

Assumed rate for income tax expense *

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(37,446)

 

 

(34,470)

 

 

(126,566)

 

 

(124,385)

 

Non-GAAP net income

 

$

112,338

 

 

$

103,413

 

 

$

379,699

 

 

$

373,154

 

 

 

 

 

 

 

 

 

 

Net income per share - diluted

 

$

0.91

 

 

$

2.39

 

 

$

5.93

 

 

$

8.60

 

Non-GAAP net income per share - diluted

 

$

2.85

 

 

$

2.82

 

 

$

9.91

 

 

$

10.19

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

39,137

 

 

36,359

 

 

38,073

 

 

36,310

 

Weighted average outstanding shares - diluted

 

39,395

 

 

36,674

 

 

38,326

 

 

36,630

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2020

 

2019

 

2020

 

2019

Net income

 

$

35,789

 

 

$

87,927

 

 

$

227,128

 

 

$

314,963

 

Amortization of acquired intangible assets in cost of revenues

 

7,004

 

 

5,854

 

 

25,675

 

 

21,357

 

Amortization of acquired intangible assets in operating expenses

 

17,780

 

 

11,552

 

 

62,457

 

 

33,995

 

Depreciation and other amortization

 

8,249

 

 

6,524

 

 

28,812

 

 

25,813

 

Interest expense (income)

 

7,914

 

 

(3,439)

 

 

17,395

 

 

(16,742)

 

Other expense (income)

 

855

 

 

(9,880)

 

 

827

 

 

(10,660)

 

Income tax expense

 

10,652

 

 

26,378

 

 

43,852

 

 

75,986

 

EBITDA

 

$

88,243

 

 

$

124,916

 

 

$

406,146

 

 

$

444,712

 

Stock-based compensation expense

 

12,667

 

 

13,271

 

 

54,104

 

 

52,255

 

Acquisition and integration related costs

 

65,892

 

 

3,651

 

 

92,523

 

 

6,679

 

Restructuring and related costs

 

 

 

 

 

413

 

 

3,054

 

Adjusted EBITDA

 

$

166,802

 

 

$

141,838

 

 

$

553,186

 

 

$

506,700

 

 

CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)

 

 

 

 

 

 

 

December 31,
2020

 

December 31,
2019

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

3,755,912

 

 

$

1,070,731

 

Accounts receivable

 

119,059

 

 

96,788

 

Less: Allowance for credit losses

 

(15,110)

 

 

(4,548)

 

Accounts receivable, net

 

103,949

 

 

92,240

 

Prepaid expenses and other current assets

 

28,651

 

 

36,194

 

Total current assets

 

3,888,512

 

 

1,199,165

 

 

 

 

 

 

Long-term investments

 

 

 

10,070

 

Deferred income taxes, net

 

4,983

 

 

5,408

 

Property and equipment, net

 

126,325

 

 

107,529

 

Lease right-of-use assets

 

108,740

 

 

115,084

 

Goodwill

 

2,235,999

 

 

1,882,020

 

Intangible assets, net

 

426,745

 

 

421,196

 

Deferred commission costs, net

 

93,274

 

 

89,374

 

Deposits and other assets

 

15,856

 

 

9,232

 

Income tax receivable

 

14,986

 

 

14,908

 

Total assets

 

$

6,915,420

 

 

$

3,853,986

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

15,732

 

 

$

7,640

 

Accrued wages and commissions

 

80,998

 

 

53,087

 

Accrued expenses

 

110,305

 

 

38,680

 

Income taxes payable

 

16,316

 

 

10,705

 

Lease liabilities

 

32,648

 

 

29,670

 

Deferred revenue

 

74,851

 

 

67,274

 

Total current liabilities

 

330,850

 

 

207,056

 

 

 

 

 

 

Long-term debt, net

 

986,715

 

 

 

Deferred income taxes, net

 

72,991

 

 

87,096

 

Income taxes payable

 

25,282

 

 

20,521

 

Lease and other long-term liabilities

 

124,223

 

 

133,720

 

Total liabilities

 

$

1,540,061

 

 

$

448,393

 

 

 

 

 

 

Total stockholders’ equity

 

5,375,359

 

 

3,405,593

 

Total liabilities and stockholders’ equity

 

$

6,915,420

 

 

$

3,853,986

 

CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)

 

 

 

Year Ended
December 31,

 

2020

 

2019

Operating activities:

 

 

 

Net income

$

227,128

 

 

$

314,963

 

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

 

 

 

Depreciation and amortization

116,944

 

 

81,165

 

Amortization of deferred commissions costs

60,516

 

 

53,421

 

Amortization of senior notes discount and issuance costs

1,658

 

 

876

 

Non-cash lease expense

26,326

 

 

22,748

 

Stock-based compensation expense

53,450

 

 

52,255

 

Deferred income taxes, net

(11,530)

 

 

8,220

 

Credit loss expense

25,212

 

 

10,978

 

Other operating activities, net

288

 

 

105

 

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

(36,118)

 

 

(5,014)

 

Income taxes payable

10,352

 

 

(577)

 

Prepaid expenses and other current assets

1,936

 

 

(14,244)

 

Deferred commissions

(64,355)

 

 

(66,688)

 

Other assets

1,762

 

 

(648)

 

Accounts payable and other liabilities

100,846

 

 

17,751

 

Lease liabilities

(30,497)

 

 

(25,442)

 

Deferred revenue

2,188

 

 

7,911

 

Net cash provided by operating activities

486,106

 

 

457,780

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from sale and settlement of investments

10,259

 

 

 

Purchases of property and equipment and other assets

(48,347)

 

 

(46,197)

 

Cash paid for acquisitions, net of cash acquired

(426,075)

 

 

(437,556)

 

Net cash used in investing activities

(464,163)

 

 

(483,753)

 

 

 

 

 

Financing activities:

 

 

 

Proceeds from long-term debt

1,744,210

 

 

 

Payments of debt issuance costs

(16,647)

 

 

 

Payments of long-term debt

(745,000)

 

 

 

Repurchase of restricted stock to satisfy tax withholding obligations

(38,867)

 

 

(27,577)

 

Proceeds from equity offering, net of transaction costs

1,689,971

 

 

 

Proceeds from exercise of stock options and employee stock purchase plan

30,280

 

 

25,080

 

Other financing activities

(1,650)

 

 

(1,657)

 

Net cash provided by (used in) financing activities

2,662,297

 

 

(4,154)

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

941

 

 

442

 

Net increase in cash, cash equivalents and restricted cash

2,685,181

 

 

(29,685)

 

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

$

3,755,912

 

 

$

1,070,731

 

CoStar Group, Inc.

Disaggregated Revenues - Unaudited

(in thousands)

 

 

 

Three Months Ended December 31,

 

2020

 

2019

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

 

 

 

 

 

CoStar Suite

$

160,842

 

 

$

7,896

 

 

$

168,738

 

 

$

154,152

 

 

$

7,107

 

 

$

161,259

 

Information services

27,048

 

 

6,930

 

 

33,978

 

 

24,318

 

 

5,030

 

 

29,348

 

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

Multifamily

160,370

 

 

 

 

160,370

 

 

130,168

 

 

 

 

130,168

 

Commercial property and land

81,129

 

 

178

 

 

81,307

 

 

53,846

 

 

105

 

 

53,951

 

Total revenues

$

429,389

 

 

$

15,004

 

 

$

444,393

 

 

$

362,484

 

 

$

12,242

 

 

$

374,726

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

2020

 

2019

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

 

 

 

 

 

CoStar Suite

$

634,205

 

 

$

30,530

 

 

$

664,735

 

 

$

590,222

 

 

$

27,576

 

 

$

617,798

 

Information services

104,117

 

 

25,953

 

 

130,070

 

 

76,950

 

 

11,496

 

 

88,446

 

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

Multifamily

598,555

 

 

 

 

598,555

 

 

490,631

 

 

 

 

490,631

 

Commercial property and land

265,225

 

 

434

 

 

265,659

 

 

202,264

 

 

580

 

 

202,844

 

Total revenues

$

1,602,102

 

 

$

56,917

 

 

$

1,659,019

 

 

$

1,360,067

 

 

$

39,652

 

 

$

1,399,719

 

CoStar Group, Inc.

Results of Segments - Unaudited

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

2019

 

2020

 

2019

EBITDA

 

 

 

 

 

 

 

North America

$

88,241

 

 

$

125,457

 

 

$

410,852

 

 

$

451,699

 

International

2

 

 

(541)

 

 

(4,706)

 

 

(6,987)

 

Total EBITDA

$

88,243

 

 

$

124,916

 

 

$

406,146

 

 

$

444,712

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

Q3

Q4

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$85.2

$63.2

$78.6

$87.9

 

$72.8

$60.4

$58.2

$35.8

Income tax expense

 

12.5

16.8

20.3

26.4

 

5.6

16.9

10.7

10.7

Income before income taxes

 

97.7

80.0

98.9

114.3

 

78.4

77.3

68.9

46.4

Amortization of acquired intangible assets

 

13.2

12.2

12.5

17.4

 

17.5

21.0

24.9

24.8

Stock-based compensation expense

 

12.0

13.8

13.1

13.3

 

15.2

9.5

16.7

12.7

Acquisition and integration related costs

 

0.2

0.5

2.3

3.7

 

8.7

10.0

7.9

65.9

Restructuring and related costs

 

0.1

2.2

0.8

 

0.4

Other (income) expense

 

(10.8)

 

0.1

Non-GAAP income before income taxes

 

123.2

108.7

127.6

137.9

 

119.8

117.8

118.9

149.8

Assumed rate for income tax expense *

 

25%

25%

25%

25%

 

25%

25%

25%

25%

Assumed provision for income tax expense

 

(30.8)

(27.2)

(31.9)

(34.5)

 

(30.0)

(29.5)

(29.7)

(37.5)

Non-GAAP net income

 

$92.4

$81.5

$95.7

$103.4

 

$89.8

$88.3

$89.2

$112.3

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share - diluted

 

$2.53

$2.23

$2.61

$2.82

 

$2.44

$2.34

$2.26

$2.85

 

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - basic

 

36.2

36.3

36.3

36.4

 

36.5

37.5

39.2

39.1

Weighted average outstanding shares - diluted

 

36.6

36.6

36.7

36.7

 

36.8

37.7

39.4

39.4

 

 

 

 

 

 

 

 

 

 

 

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

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2020

 

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

Q4

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$85.2

$63.2

$78.6

$87.9

 

$72.8

$60.4

$58.2

$35.8

Amortization of acquired intangible assets

 

13.2

12.2

12.5

17.4

 

17.5

21.0

24.9

24.8

Depreciation and other amortization

 

6.5

6.5

6.3

6.5

 

6.8

7.0

6.8

8.2

Interest (income) expense

 

(4.2)

(4.7)

(4.4)

(3.4)

 

(1.7)

3.6

7.5

7.9

Other (income) expense

 

(0.5)

(0.3)

(9.9)

 

(0.8)

0.4

0.3

0.9

Income tax expense

 

12.5

16.8

20.3

26.4

 

5.6

16.9

10.7

10.7

EBITDA

 

$113.2

$93.5

$113.0

$124.9

 

$100.2

$109.3

$108.4

$88.3

Stock-based compensation expense

 

12.0

13.8

13.1

13.3

 

15.1

9.5

16.7

12.7

Acquisition and integration related costs

 

0.2

0.5

2.3

3.7

 

8.7

10.0

7.9

65.9

Restructuring and related costs

 

0.1

2.2

0.8

 

0.4

Adjusted EBITDA

 

$125.5

$110.0

$129.2

$141.9

 

$124.0

$128.8

$133.4

$166.9

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 March 31, 2021

 

December 31, 2021

 

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

 

Net income

$

64,000

 

 

$

70,000

 

 

$

313,000

 

 

$

324,000

 

 

Income tax expense

11,000

 

 

12,000

 

 

89,000

 

 

92,000

 

 

Income before income taxes

75,000

 

 

82,000

 

 

402,000

 

 

416,000

 

 

Amortization of acquired intangible assets

24,000

 

 

24,000

 

 

92,000

 

 

92,000

 

 

Stock-based compensation expense

17,000

 

 

16,000

 

 

68,000

 

 

66,000

 

 

Acquisition and integration related costs

7,000

 

 

6,000

 

 

12,000

 

 

10,000

 

 

Non-GAAP income before income taxes

123,000

 

 

128,000

 

 

574,000

 

 

584,000

 

 

Assumed rate for income tax expense *

25

%

 

25

%

 

25

%

 

25

%

 

Assumed provision for income tax expense

(30,800)

 

 

(32,000)

 

 

(144,000)

 

 

(146,000)

 

 

Non-GAAP net income

$

92,200

 

 

$

96,000

 

 

$

430,000

 

 

$

438,000

 

 

 

 

 

 

 

 

 

 

 

Net income per share - diluted

$

1.62

 

 

$

1.77

 

 

$

7.88

 

 

$

8.16

 

 

Non-GAAP net income per share - diluted

$

2.33

 

 

$

2.43

 

 

$

10.83

 

 

$

11.03

 

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares - diluted

39,500

 

 

39,500

 

 

39,700

 

 

39,700

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Guidance Range

 

Guidance Range

 

 

For the Three Months

 

For the Year Ending

 

 

Ending March 31, 2021

 

December 31, 2021

 

 

Low

 

High

 

Low

 

High

 

Net income

$

64,000

 

 

$

70,000

 

 

$

313,000

 

 

$

324,000

 

 

Amortization of acquired intangible assets

24,000

 

 

24,000

 

 

92,000

 

 

92,000

 

 

Depreciation and other amortization

9,000

 

 

9,000

 

 

32,000

 

 

32,000

 

 

Interest and other expense, net

8,000

 

 

8,000

 

 

34,000

 

 

34,000

 

 

Income tax expense

11,000

 

 

12,000

 

 

89,000

 

 

92,000

 

 

Stock-based compensation expense

17,000

 

 

16,000

 

 

68,000

 

 

66,000

 

 

Acquisition and integration related costs

7,000

 

 

6,000

 

 

12,000

 

 

10,000

 

 

Adjusted EBITDA

$

140,000

 

 

$

145,000

 

 

$

640,000

 

 

$

650,000

 

 

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. 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. 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. 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 over 4,600 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, leads generated, and sales; 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 acquisition opportunities do not continue to develop or that any completed acquisitions do not produce the expected results; the risk that the Company’s investment plans change or that those investments do not produce the expected results, including accelerated growth; the risk that revenues for the first quarter and full year 2021 will not be as stated in this press release; the risk that Homesnap revenues for 2021 differ from expectations; the risk that net income for the first quarter and full year 2021 will not be as stated in this press release; the risk that adjusted EBITDA for the first quarter and full year 2021 will not be as stated in this press release; the risk that Homesnap adjusted EBITDA for 2021 differs from expectations; the risk that non-GAAP net income and non-GAAP net income per diluted share for the first quarter and full year 2021 will not be as stated in this press release; and the risk that the tax rate estimates stated in this press release may change. 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 Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 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

Bill Warmington
Vice President
Investor Relations
(202) 346-5661
wwarmington@costar.com

Source: CoStar Group, Inc.