Key Highlights

  • CoStar Group reported third quarter revenue of USD 952 million, up 14% year over year and roughly in line with estimates.
  • Adjusted earnings per share reached USD 0.38, up 65% from a year earlier, while adjusted EBITDA doubled to USD 229 million.
  • Net income was USD 74 million for the quarter, an increase of USD 105 million compared with the prior year period.
  • The company raised full year 2026 adjusted EBITDA guidance to a range of USD 820 million to USD 840 million.

Profitability Surges on Cost Efficiency Gains

CoStar Group (NASDAQ:CSGP) reported third quarter revenue of USD 952 million, up 14% from USD 834 million a year earlier. Net income reached USD 74 million, up USD 105 million year over year, with earnings per diluted share of USD 0.18 on a GAAP basis. Adjusted net income rose 59% to USD 153 million, with adjusted earnings per share of USD 0.38, up 65% from a year earlier.

Adjusted EBITDA reached USD 229 million for the quarter, doubling from the prior year period and coming in above the company's prior guidance range of USD 190 million to USD 210 million. The company said it has identified approximately USD 150 million in total anticipated cost savings for the year, versus its original guidance, with potential additional savings of at least USD 200 million identified through an ongoing expense review.

Raised Guidance Reflects Margin Expansion Trajectory

The company increased its full year 2026 adjusted EBITDA guidance to a range of USD 820 million to USD 840 million, representing an increase of USD 30 million at the midpoint from its July guidance and a cumulative USD 60 million increase from its February guidance. Full year revenue guidance was raised to a range of USD 3.75 billion to USD 3.77 billion, representing growth of approximately 16% year over year at the midpoint.

For the fourth quarter, the company guided adjusted EBITDA to a range of USD 275 million to USD 295 million and revenue to a range of USD 976 million to USD 996 million. Full year adjusted earnings per share guidance was raised to a range of USD 1.38 to USD 1.41, based on an estimated 405 million shares outstanding.

Acquisitions and Longer Term Targets

The company's recent acquisition of Zonda and its agreement to acquire Vexcel were cited as steps to expand its proprietary data assets, which management described as a competitive advantage in deploying artificial intelligence across its marketplace platforms. Net new bookings were USD 37 million for the quarter.

The company said its cost efficiency gains support its 2028 adjusted EBITDA target of USD 1.25 billion, with the additional USD 200 million in identified savings to be realized over the next 12 to 18 months. Continued execution of the expense review program, alongside integration of recent acquisitions, remain variables in achieving the longer term target.

Guidance and Integration Items to Watch

Progress toward the raised full year adjusted EBITDA guidance of USD 820 million to USD 840 million, the pace of additional cost savings beyond the USD 150 million already identified, and integration milestones tied to the Zonda and pending Vexcel acquisitions are among the items the company has flagged for coming quarters. The 2028 adjusted EBITDA target of USD 1.25 billion remains a longer term reference point management has reiterated.