CoStar Group Reports 12% Revenue Increase to $732.2 Million in Q1 2025

CoStar Group, Inc. reported a revenue increase of 12% for the first quarter of 2025, reaching $732.2 million compared to $656.4 million in the same period last year. The company's gross profit also rose by 12% to $578.9 million, with a gross profit margin of 79%. However, CoStar experienced a net loss of $14.8 million, a significant decline from a net income of $6.7 million in the prior year, primarily due to increased operating expenses and a decrease in interest income.

The company's operating expenses increased by 11% to $621.7 million, driven by a 43% rise in general and administrative costs, largely attributed to acquisition-related activities. Selling and marketing expenses remained relatively stable, while software development costs rose by 15%. The increase in costs was partially offset by a decrease in the cost of revenues as a percentage of total revenues, which fell from 22% to 21%.

CoStar's strategic developments included the completion of the Matterport Acquisition in February 2025, which is expected to enhance its offerings in 3D digital twin technology. The acquisition contributed to a 46% increase in other revenues, reflecting the integration of Matterport's services. Additionally, the company reported a 21% increase in Information Services revenues, primarily due to the Visual Lease Acquisition completed in November 2024.

As of March 31, 2025, CoStar's cash, cash equivalents, and restricted cash totaled $3.8 billion, down from $4.7 billion at the end of 2024. The decrease was largely due to cash used in investing activities, including the Matterport Acquisition, which amounted to $750.1 million. The company also initiated a stock repurchase program in February 2025, authorizing the repurchase of up to $500 million of its common stock, with $18.5 million spent on repurchases in the first quarter.

Looking ahead, CoStar Group anticipates continued revenue growth driven by its strategic acquisitions and product integrations. The company plans to invest in expanding its sales force and enhancing its service offerings, particularly in the Homes.com and LoopNet segments. However, management has cautioned that economic conditions and market dynamics could impact future performance, particularly in terms of customer retention and subscription renewals.