CoStar Group Reports 23% Revenue Growth to $897 Million in Q1 2026

CoStar Group, Inc. reported a significant increase in financial performance for the first quarter of 2026, with total revenue rising to $897 million, a 23% increase from $732 million in the same period last year. This growth was driven by a 15% increase in Commercial Real Estate revenue, which reached $472 million, and a 32% increase in Residential Real Estate revenue, totaling $425 million. The company attributed this growth to several factors, including an increase in subscribers, inflation-based price adjustments, and contributions from recent acquisitions, particularly the Domain and Matterport acquisitions.

The company's net income for the quarter was $3 million, a notable recovery from a net loss of $15 million in the first quarter of 2025. This turnaround was supported by a gross profit of $701 million, despite a slight decrease in gross profit margin from 79% to 78%. The increase in cost of revenue, which rose by 28% to $196 million, was primarily due to higher amortization expenses related to acquired technology and personnel costs associated with the acquisitions. Operating expenses also increased, but at a slower rate than revenue, allowing for improved profitability.

CoStar Group has made strategic advancements through its acquisitions of Matterport and Domain, completed in February and August 2025, respectively. The Matterport acquisition has enhanced the company's capabilities in 3D digital twin technology, while the Domain acquisition has expanded its presence in the Australian market. As of March 31, 2026, CoStar reported a total of 407.1 million shares outstanding, with a significant portion of its stock repurchase program executed, totaling $505 million in share buybacks during the quarter.

Operationally, CoStar Group has seen an increase in customer engagement, with annualized net new bookings for subscription-based services rising to $67 million, up from $56 million in the previous year. The company reported a contract renewal rate of approximately 89% for its subscription services, indicating strong customer retention. Additionally, CoStar's international expansion efforts are underway, with plans to launch LoopNet in Australia and CoStar in France, further broadening its market reach.

Looking ahead, CoStar Group anticipates continued revenue growth, particularly in its Residential Real Estate segment, driven by the full-year impact of the Domain acquisition and an increase in Homes.com memberships. The company remains committed to investing in technology and expanding its service offerings, including the integration of AI capabilities across its platforms. CoStar's management believes that its current cash position of $1.3 billion, along with cash generated from operations, will be sufficient to support its growth initiatives over the next 12 months.