CoStar reports a double-digit revenue increase for the third quarter
Apartments.com led CoStar’s earnings during a challenging quarter for the real estate industry.
Key points:
- CEO Andrew Florance expressed confidence that the company will deliver stronger revenue growth in the fourth quarter.
- Apartments.com continued to be the dominant player in the company’s portfolio.
- The sales team at Apartments.com reported a record third quarter, with $90 million in new bookings from January through September.
Proclaiming "we are now back to double-digit revenue growth," CoStar Group's CEO and founder Andrew Florance reported strong third-quarter earnings of $557 million in revenues for the commercial real estate platform, up 12% over the same period in 2021.
"Overall, I am extremely pleased by performance and have increasing confidence that we will return to 20% revenue growth," Florance said about the earnings period that ended Sept. 30.
Apartments.com, the company's apartment listing website, was the dominant player and led CoStar's growth at a challenging time for the overall real estate industry. Florance told investors that Apartments.com had an 11% increase in revenues for the third quarter, and he said that the fourth quarter should be more robust, predicting 16% growth in revenues. Net sales last quarter for the rentals portal were up 138% from a year ago. The trend continued into the third quarter. The company launched a new feature at the end of Q2, "Listing of the Future," which offers detailed online floor plans of apartment units.
The sales team at Apartments.com also had a record quarter, with $90 million in new bookings for the year. "We continue to hire aggressively, increasing our sales force by 26% since last year," Florance noted. The company delivered 12 billion media impressions in ad campaigns.
Florance said the company had strong earnings across all its business platforms. He cited the performance of LoopNet, CoStar's listing and marketing service; its New York City-based startup CitySnap; and Homes.com.
He noted that 70% of New York City real estate agents are now registered on CitySnap. CitySnap is a search engine and mobile app for home shoppers and real estate professionals in New York City the company launched in 2021.
CoStar's bread-and-butter is analysis of the real estate market through its database of research that spans commercial property values, market conditions and analytics for the global hospitality industry.
CoStar joined the S&P 500 Index on Sept. 19, but it already was a legend in the real estate industry. Founder Andrew Florance started the company in 1987 out of his college dormitory at Princeton University, and over the following decades, the company has grown into a major player.
Global acquisitions since 2021 include Business Immo, a commercial real estate news service; and BureauxLocaux.com, a platform for buying and leasing commercial real estate. Both companies are based in France. CoStar also acquired U.S. real estate portal Homes.com in May 2021.