CoStar Earnings: Residential Investments Drive Impressive Homes.com Traffic Growth

Wide-moat-rated CoStar Group reported decent results in the second quarter as the firm reported non-GAAP EPS of $0.31, slightly higher than the FactSet consensus estimate of $0.30 per share. The company’s 2023 revenue guidance was lowered slightly to reflect the impact of lower property transaction volume on Ten-X, but the adjusted EBITDA guidance remained roughly similar. Overall revenue increased 13.2% on a year-over-year basis on the back of strong growth in the CoStar suite and multifamily segments. Annualized net new sales bookings which is an indicator of future revenue growth came in at $82 million for the second quarter, compared with $84 million in the same quarter of the last year. The adjusted EBITDA margins were recorded at 20.9% in the current quarter down from 29.6% in the second quarter of the previous year, largely because of the considerable residential investments of the company.