CoStar Group’s annual revenue increase of 12% during the third quarter of 2023 marked the 50th straight quarter of double-digit revenue growth. The company reported revenue of $625 million and net income of $91 million, up 25% compared to a year ago, for the quarter.
“We have diversified our revenue across counter-cyclical marketplaces, such as Loop Net and Apartments.com, while diversifying CoStar product revenue into broader verticals,” Andy Florance, CoStar’s founder and CEO, said during the firm’s Q3 2023 earnings call with investors and analysts Tuesday evening. “We remain committed to building a subscription only revenue portfolio across the business. The result we see today is an extremely resilient and steady growth business even during a time when the property markets are in a hard down cycle as they are now.”
Florance also highlighted the impressive growth of Homes.com, which recorded over 100 million unique monthly visitors in September, a 1,290% increase over the year prior, according to data from Google Analytics.
According to Florance, the combined traffic on both Homes.com and Apartments.com in September was more than combined traffic of Realtor.com and Redfin, according to their most recent earnings announcements.
“Two short years ago, when we acquired Homes.com, we set out to deliver an agent-friendly site that homebuyers love,” Florance said. “I believe that reaching over 100 million monthly unique visitors in September to Homes.com is evidence that we are achieving that goal.”
With the Sitzer/Burnett class action buyer broker compensation antitrust lawsuit currently being the talk of the industry, it came as little surprise that Florance took some time out of the call to address the elephant in the room.
Florance believes that unlike other portals which sell agents buyside leads, Homes.com will not be “negatively impacted by the end of the buyer broker commission rule.”
“I think we can succeed regardless of what the outcome is in those cases, but I think if the plaintiffs prevail it will likely create rapidly changing conditions that might favor a company like Homes.com, which is not focused on monetizing buyer agent leads and as things get turned upside down if you are not in the blast radius of that change you are better off to compete the next day,” Florance said.
Despite his confidence in his firm, Florance did not downplay the significance of the lawsuits.
“We could be seeing the biggest change the residential real estate industry has seen in recent or even long-term history,” Florance said.
As the firm looks toward the end of the year, CoStar executives said the firm expects to generate revenue for the full year 2023 in the $2.445 billion to $2.450 billion range, an increase of roughly 12% year over year.