CoStar Group, Inc Q1 2026 Earnings Call Transcript

CoStar Group, Inc (NASDAQ: CSGP) Q1 2026 Earnings Call dated Apr. 28, 2026

Presentation

Rich Simonelli — Head of Investor Relations

Hello everybody and welcome to the CoStar earnings call for Q1 2026. Thank you all for joining us.

Before I turn the call over to Andy Florence, CoStar Group’s CEO and founder; and Chris Lown, our CFO, I’d like to review a few of our safe harbor statements. First of all, certain portions of the discussion today may contain forward looking statements. The company’s outlook and expectations are based on current beliefs and assumptions. Forward looking statements involve many risks, uncertainties, assumptions, estimates and other factors that can cause actual results to differ materially from such statements. Important factors that can cause actual results to differ include, but are not limited to those stated in CoStar Group’s press release issued today and in our filings with the sec. All forward looking statements are based on the information available to CoStar Group on the date of this call. CoStar Group assumes no obligation to update these statements, whether as a result of new information, future events or otherwise.

Reconciliations, the most directly comparable GAAP measure of any non GAAP financial measure discussed on this call are shown in detail in our press release issued today along with the definitions for those terms.

The press release is available on our website located on costargroup.com under press room. Please refer to today’s press release on how to access the replay of this call. Remember one question during the Q&A session, so make it a good one.

And with that, I’d like to turn the call over to our Founder and CEO, Andy Florence. Thank you.

Andy Florance — Founder and Chief Executive Officer

Rich, thank you for joining us today. I want to start with three things. First, this was an exceptional quarter. We delivered our 60th consecutive quarter of double digit revenue growth. Our adjusted EBITDA doubled and we’re on track for the highest full year adjusted EBITDA in Costar Group’s history. Second, the homes.com investment is delivering exactly what we said it would. Member agents are generating extraordinary returns on their subscriptions. Consumer engagement on Holmes AI is multiples of conventional residential search and homes.com is the fastest growing residential portal in the United States.

I’ll walk you through the evidence later in the call. Third, the activist distraction is behind us. With the noise gone, we have more focused energy than ever to spend on what matters growing EBITDA. Let me take you through the numbers. First quarter 2026 revenue grew 23% year over year. Q1. 26 adjusted EBITDA of 132 million doubled year over year and came in 26% above the midpoint of our guidance after a record 2025 for annualized net new bookings we started 2026. Stronger still, Q1 net bookings of 67 million were up 20% year over year.

We expect productivity to build over the year, particularly from the sales reps we hired. Throughout 2025, our commercial business generated $472 million of revenue in Q1, up 15% year over year with adjusted EBITDA of $161 million. CoStar revenue was 330 million 331 million. Let’s get that extra million in there in Q1. With annualized net new bookings from our core Costar product up 16% year over year, CoStar users grew 22% year over year to 317,000. Sales to brokers and tenants were especially strong, with broker sales up 29% and tenant sales up 27% year over year.

CoStar NPS was 69 and our quarterly renewal rate was 92%. CoStar Rent Benchmark launches this summer Drawing on our proprietary lease database and public records, it will be the industry’s only net effective rent benchmark product, giving landlords, occupiers, investors and brokers visibility into starting rents, effective rents, TI allowances, free rents and escalations across US markets. CoStar New Homes is in development with phase one plan for Q2. The module tracks new residential construction from planning through delivery and serves homebuilders, mortgage bankers, retailers and retail center owners.

It integrates builder feeds, drone imagery and other data sources to deliver insight into housing supply, demand and market trends. CoStar Debt Solutions, formerly Costar Lender, had a strong quarter with net new bookings up 26% year over year as the business crossed 100 million in revenue. Debt Solution now serves over 500 financial institutions across the full lender spectrum, including banks, private lenders, debt funds and regulators. Debt Solutions is on track to launch CRE debt benchmarking in 2H26 with CRE loan origination workflow following in Q1 of 27.

The final product will be a full workflow solution to originate and underwrite a loan. Our first release will focus on seamless delivery of property details, peer properties and market information. We launched a client advisory committee with over a dozen institutions to shape the loan origination roadmap, deepen understanding of how AI is reshaping their workflows and strengthen product market fit across the platform. Debt Solutions is actively building these AI enhanced workflows. CoStar UK’s growth accelerated in Q1 with revenue up 25% and net new bookings up 44% year over year.

This growth was supported by the release of new land registry lease modules that gave clients authority of authoritative effective rent data sourced from government records and the recollapse of one of our primary competitors there, CoStar Canada revenue grew 22% year over year. We released multi family analytics coverage for Montreal in Q1. CoStar France launches in Q2 we will cross sell into the 32,000 French CRE professionals who already subscribe to news and information from our business IMO acquisition Accelerating Adoption as we build the only pan European CRE data and analytics platform in CoStar Australia, we are rapidly building proprietary property data.

With our local research team now approaching 100 people, we expect to launch CoStar and LoopNet in Australia in Q3 and Q4. Real estate manager added AI lease abstraction capabilities to the visual lease platform this quarter and we’ll extend these capabilities to Costar Real Estate Manager later this year. Customers are eager to bring this best in class capability into the lease management and accounting workflows to save them a lot of time and hassle. We’re also deploying multiple AI agents internally to accelerate customer onboarding, support, enablement and the automation of reputable professional services.

Work in Q1 SDR launched profitability benchmarking, supporting more than 150 detailed data points across a hotel’s P and L. Customer interest was immediate with 750 hotel subscribers submitting data to unlock the functionality. Building participation at scale is critical to future monetization and this early engagement reinforces the long term value of the investment. LoopNet generated 85 million of revenue in Q1, up 16% year over year. Paid listings rose 10% year over year in the US, 35% in Canada and 63% in the UK.

Last month, after more than a year of successful testing, we rolled out asset based pricing across all US markets. LoopNet advertising is now priced to match the size of the asset and the value LoopNet delivers to Listers. Early results have been really outstanding. At the high end, the volume of silver listings sold at $300 or above per month grew 650% from February to March. At the low end, listings sold below $40 grew over 1,100%, opening up an entirely new category of inventory and bringing in smaller advertisers who could not justify the higher price points for one size fits all that we had before.

We expect this to drive more listings, more traffic and more revenue. LoopNet’s European revenue grew 17% year over year following last year’s launch in France and Spain. We’re seeing the network effects of being the first and only global commercial real estate marketplace. Average monthly unique visitors on LoopNet Europe more than doubled to over 900,000, up 102% year over year. Crucially, these users are not just searching their home countries, they’re searching globally. We will extend this network effect as LoopNet launches in Australia, Germany and other markets.

Our Australia CRE marketing platform CommercialRealEstate.com grew 10% year over year on a pro forma basis, driven by higher depth revenue, improving depth penetration and higher average revenue per listing. That commercial unique visitor audience was up 129% year over year in Q1. Subscription revenue for Matterport was up 19% year over year. Enterprise Momentum built through the quarter. New enterprise accounts in March were up 31% year over year and direct sales were up 16%. Supported by a healthy and expanding pipeline that continues to build into Q2, Matterport has become a critical point of differentiation across CoStar group.

It drives engagement list conversion and generates valuable proprietary data. Integration is proceeding exceptionally well across apartments.com, homes.com, loopNet costar domain. Matterport is already a key component of Homes AI and will unlock huge future AI innovation all across COSTAR Group. Matterport Exteriors with X Ray now in alpha lets users virtually remove a roof or floor of a virtual building to see the building’s interior in the context of the yard, the neighborhood. That’s a real estate marketer’s dream.

We’ve also released a number of new innovations with strong use cases in architectural engineering, construction, facilities management and manufacturing. Biz by sell revenue was 8.8 million in Q1 with broker subscriptions reporting 2,300 with broker subscribers I’m sorry reporting 2,345 completed sales transactions of businesses representing 2 billion enterprise value, 59% of which involved commercial real estate. We’re rapidly turning Biz by Sell into a true end to end transaction platform with integrated financing, 3D tours and document sharing now driving over 24,000 Briar profiles and 15% broker adoption.

Residential revenue was 421 million in Q1, up 32% year over year. Adjusted EBITDA improved by 56 million and we expect the residential segment to reach profitability in Q2 2026. Apartments.com generated 312 million of revenue in Q1, up 10% year over year. The 15th consecutive quarter of double digit revenue growth. Apartments.com delivered 220 million highly engaged renter visits, 370,000 tours and 300,000 applications submitted directly on our platform to apartment owners alongside 40 million Matterport tours, our monthly renewal rate held at 99%.

Apartments.com brand media impressions nearly tripled in Q1, up 189% year over year to 1.7 billion. The longer we invest in our brand on behalf of our clients, the more efficiently we deploy that investment. Clear example our first ever co branded Super bowl commercial with Homes.com aired on February 8th reaching 126 million viewers, the highest peak viewership in US media history. Combined with our industry leading SEO and SEM, these efforts continue to produce the most qualified audience of apartment seekers on the Internet.

According to Google, overall rental search demand remains soft. Even so, Comscore data shows Apartments.com network unique visitors up 3% year over year. In March, Zillow unique visitors were down 5% year over year and Zillow’s expanded rental network Zillow plus realtor plus redfin was down 3%. Zillow has now seen unique visitors decline year over year for 15 consecutive quarters. Let’s make that 15 consecutive months, not 15 consecutive quarters. I was just sort of picking up the 15 consecutive quarters of double digit growth we had.

Our Sales Force conducted 185,000 quality meetings in Q1 for Apartments.com and achieved an outstanding NPS of 89 in Q1. Apartments.com introduced Smart Search, our natural language search feature and the first AI powered voice search in multifamily. Smart Search lets renters search the way they speak, packing every detail and even multiple locations into a single query. Results are faster, more detailed and dramatically more efficient. The early metrics are really strong. Renters who use Smart Search spend 94% more time on site and view 63% more listings.

Ahead of the June apartmentalized trade show that NAA hosts, the big show of the year, we will launch Apartments AI. Our pioneering conversational search experience built on the same technology powering Homes AI, Apartments AI will more deeply engage renters and continuing delivering best in class advertiser ROI through the industry’s highest quality leads. We will also highlight Homes.com’s expanded rental capabilities and the value add to Apartments.com at that same apartmentalize. Apartments.com leads the industry on price transparency.

Any property can now display complete all in monthly price with all the extras reoccurring one time required fees with a prominent badge alerting renters. Six states already require this sort of transparency and the FTC just concluded its public comment period on similar rules. Matterport continues to be a true differentiator for consumers. On Apartments.com we now have approximately 250,000 3D tours in the platform and including over 1,500 Matterport 3D exteriors that give prospective renters an immersive 360 degree view of the entire community.

In Q1, renters spent 46% more time on listings featuring a Matterport and Those listings generated 56 times more tour requests per listing than listings without one. It’s an amazing stat. Homes.com revenue grew 58% year over year to 26 million in Q1. We are on pace to hit our state of 2026 net investment target of 550 million in homes and what that investment is buying is becoming clear in the data. Membership growth and monetization are both accelerating. We added over 4,300 members in Q1, up 205% from Q1 of 25.

We now have 35,175 agent subscribers with 76% of them on annual contracts. Net new bookings were 11 million in Q1 March. Annual revenue run rate reached 106 million up 92% year over year. Our trailing twelve month average ARPU is $287. We are now seeing clear quantifiable evidence that homes.com business model is working and that our subscribers gaining an extraordinary return on their investment. We analyzed the first 11,400 Homes.com members and compared their commission earnings in the 12 months before joining Homes.com to the earnings in the 12 months after they became a Homes.com subscriber.

The findings are striking. On average, a Homes.com subscriber earned 36,400 more in commissions in their first year as a member against an average annual subscription cost of just $3,400. That’s an 11 times return on their investment. In the same time period AHRQ members saw commissions grow 16% while the average non member saw their commissions decline. The ROI is even stronger for the agents who need it most. Agents who have had earned 50,000 or less in the prior year earned 58,000 more after joining pre membership earnings were 26,000 on average and that jumped to 82,000 on average.

There are hundreds of thousands of agents in this earnings cohort. Agents in the 50 to 100,000 bracket earned 41 more thousand dollars in commissions after joining. Agents in the 100,000 to $150,000 bracket earned $38,000 more once they became HOMES members. These numbers almost certainly understate. The value of the benefit extends beyond our 12 month analysis window and we exclude the significant rental marketing value members generate through homes.com and our syndication to apartments.com based on these results, we will raise subscription fees for new customers on May 1 and evaluate measured potential renewal increases for CoStar Group as a whole.

This is the fastest organic revenue build we’ve ever achieved for a new product, and we hit these revenue levels faster than our U.S. Competitors did at their start. Our NPS is 41, an excellent score after just two years and still improving. Homes.com subscribers paid to promote 260,000 active listings in Q1, representing 8.7% of the nearly 3 million homes for sale in the U.S. In 2025, the Homes.com network drew nearly 2.1 billion views and 108 million average monthly unique visitors. We achieved a healthy balance across SEM, SEO and direct traffic, allowing us to optimize SEM for quality leads, not just quantity.

The result is better traffic and more engaged visitors. Organic traffic to homes.com was up more than 100% year over year in every month of the quarter and March, specifically up 119% year over year. Homes.com was featured across major cultural moments in 2026, including the Oscars, the Olympics, the Super Bowl, March Madness and many other, driving over 3 billion impressions in Q1. Our new March ad showcased Holmes AI in action and I’ve received more positive feedback on this campaign than any of our prior homes.com campaigns.

In March, average annual session duration hit an all time high of 26% year over year and bounce rate hit an all time low, down 29%. Homes AI is the engine behind this engagement surge. AI users run nearly four times as many searches, favorite seven times as many properties, and submit seven times as many leads. In April, time on site reached 8:18 minutes for AI users vs 4 minutes 32 seconds for non AI users. Put plainly, when consumers experience Homes AI, they spend roughly four times longer than they do on conventional residential search.

This is precisely the dynamic that precedes meaningful consumer share shift and is exactly the proof point we expected our AI investment to produce. In March 26, we significantly expanded our relationship with EXP Realty, the largest residential firm by transaction size in 25. The new partnership lets EXP’s A3000 agents prominently display pre market coming soon listings on homes.com you may recall we partnered earlier with exp commercial in December 24 when they became a major subscriber to CoStar’s information and analytics.

We’ve been integrating Apartments.com with Homes.com since early 2025. Last year, Homes.com rentals drove over 10% of Apartments.com’s traffic, making Homes.com Apartments.com’s largest syndication partners. This combination produced nearly 650,000 paid single family home rental listings in 25 paid single family rental listings in Q1 2026 grew 33% year over year, according to comScore. Homes.com is now the fastest growing rental site in the U.S. Per Google Analytics, Homes.com rentals visits grew by 13 million versus Q1 of 2025, making Homes.com our most powerful platform for reaching a single family rental market.

Over 214,000 independent owners now use our rental tools and we expect that number to raise materially as we extend the full apartments.com feature set into homes.com we’re continuing to improve the experience for renters who search on homes.com by the end of 2026, every tool available in apartments.com will be available on homes.com letting independent owners rent their house, condo or townhouse across both platforms. At the end of August 2025, we began selling marketing on homes.com to new home builders in the eight months first eight months we generated 3.3 million in annualized net new bookings, with the run rate accelerating each quarter.

Q1 alone delivered 1.5 million. We assigned data feed agreements with 663 home builders looking to reach the homes.com audience. These feeds now cover roughly 75% of all production new home activity in the U.S. These feeds provide a better consumer experience to home searchers on homes.com and are a foundational building block to power a valuable new homes information product within CoStar. So let me pause to speak briefly to the elephant in the room. The activist campaign over the last year did weigh heavily on homes.com sales and potential partnerships.

Real estate leaders were reading a steady drumbeat of negative coverage. Nonetheless, we made durable progress through it. With that distraction now behind us, we can now apply even more focused energy to accelerating homes.com revenue and the revenue in every other business in the portfolio. Land.com revenue grew 8% year over year and net new bookings hit a record up 126% year over year, boosted by replacing a regionally targeted site specific ad with a county targeted network and ad format. Inventory tripled and AD sold quadrupled.

Domain Australia delivered a strong Q1 with sustained elevated audience volume, strong uptake of premium products and disciplined cost control. Recent investments in product technology, research and photography are now producing tangible outcomes and Q1 revenue was 68 million. The Australian market is highly cyclical and and Q1 is always seasonally soft, which is reflected in overall sequential down revenue year over year. However, Core Domain residential revenue did grow 11%. We delivered EBITDA growth despite all the significant investments we’re making.

In addition to expected normal seasonality. We did also discontinue revenue from spam ads on the domain portals because it was not materially profitable and significantly distracted from the value of home sellers, the value home sellers receive when marketing on those sites. CoStar Group’s technology capabilities are already benefiting Australian customers. Domain site improvements are dramatically increasing traffic monthly unique audience averaged 8 million across the quarter, with March hitting 8.4 million, the second highest month on record.

Total users reached a high of 21.9 million, up 47% year over year and listings grew 28%. Domain launched Matterport in Australia this month, bundling immersive technology into premium listing packages and giving agents and vendors meaningful savings on traditional photography. The launch generated significant positive media coverage. Q1 was another strong quarter for on the market. We closed it with our 23rd consecutive month of positive net new bookings. Total time on site was up 16% and page views up 24% year over year, driving a 23% year over year increase in leads.

OnTheMarket now has 17,500 estate agents and new home developer customers on site, the highest in its history on the market, has eclipsed Zoopla as the UK’s number two portal by inventory and now has more new home listings than rightmove. The growth was accelerated by signing the Connells Group, the UK’s largest estate agent with over 80 brands and more than 1,200 branch locations. Our on the market sales team is delivering real value for customers. NPS came in at a solid 46 for the period in Q2.

We’ll continue building AI search functionality as we progress towards integrating on the market into the homes.com software environment in 2027. In closing, I want to acknowledge our outstanding management team. The breadth and depth of expertise across this company is what makes everything you’ve heard today possible. There’s a lot of it. I am very grateful for what they bring to this company. I also want to thank our Board of Directors. Our leadership, expertise and counsel were outstanding through what was at times a noisy year.

We are well positioned to deliver against every objective we’ve set and to unlock large digital real estate opportunities ahead of us. To our shareholders, thank you for your continued support. The day of this quarter across CRE, across apartments, especially across homes.com confirms one thing the strategy is working. I’ve never been more confident in our plan to deliver double digit revenue growth and significant earnings expansion through 2030 and beyond.

At this point, I’ll turn the call over to our CFO, Chris

Christian M. Lown — Chief Financial Officer

Thanks, Andy. In the first quarter of 2026 we delivered $132 million of adjusted EBITDA, doubling the adjusted EBITDA from the first quarter of 2025 and $17 million above the high end of our guidance range. The outperformance in adjusted EBITDA was primarily due to lower personnel costs from cost saving efforts as we continue to find efficiencies from AI personnel and other expense initiatives. 1Q26 revenue was $897 million, which was 23% higher year over year and toward the high end of our guidance range.

Organic revenue growth was 10% for the quarter. Commercial revenue in the first quarter was $472 million, an increase of 15% year over year and a 7% organic growth rate. Our commercial brands delivered revenue in line with the guidance we provided on our February earnings call. Costar revenue grew 9% to $331 million, driven by strong double digit international growth. The year over year increase was driven by both volume and price loop. Net revenue was $85 million in the first quarter, a 16% increase year over year or an 11% organic growth rate.

The year over year growth was attributable to an increase in paid listings from our continued focus on selling silver ads. Other commercial revenue was $56 million in the first quarter of 2026, up 81% compared to the first quarter of 2025. The year over year increase is primarily attributable to the inorganic contribution from Matterport, which has performed well since the acquisition with subscription revenue growth of 19%. Residential revenue in 1Q 2026 was $425 million, a 32% increase over last year’s first quarter and at the high end of our guidance range.

Organic growth for residential in the first quarter was 13% with double digit growth. Contributions from apartments, homes and on the market. Increased volumes were the catalyst for organic growth in the first quarter. Commercial adjusted EBITDA was $161 million in the first quarter of 2026, a 34% margin and above the high end of our guidance range. Similarly, residential adjusted EBITDA was also better than our guidance range, coming in at negative $29 million. CoStar posted positive net income and adjusted EPS of $0.23 per share for the first quarter of 2026, both considerably higher than our guidance.

Our sales headcount at the end of March was 2090. Homes.com reps make up our largest sales team, consisting of 570 individuals. Apartments.com is the next largest salesforce with 520 reps, with Costar at 475 reps and 225@ the LoopNet team For Homes.com reps, we are focused on driving productivity and efficiency in 2026 with our other brands. We will be adding reps throughout the remainder of the year given the significant opportunity that still exists across all our brands, and we expect productivity to ramp as our new sales reps mature over the coming years.

Our contract renewal rate has held consistently at 89% for the past seven quarters. Customers who have been subscribers for at least five years have an impressive 95% renewal rate. Subscription revenue on annual contracts was 73% of total revenue for the first quarter of 2026 compared to 71% during the fourth quarter of 2025. As a reminder, Domain does not operate using annual subscriptions. Net new bookings for the first quarter were $67 million, a 20% increase from the first quarter of 2025. In 2025, we completed our first share repurchase program, buying back $500 million worth of stock, or 7.1 million shares.

We subsequently announced a $1.5 billion buyback program in January of this year. Throughout the first quarter, we repurchased 11.4 million shares for $505 million, the majority of which was purchased through an accelerated share repurchase plan. We expect to repurchase an additional $195 million worth of shares during the remaining nine months of the year, bringing our total cash outlay for share buybacks in 2026 to $700 million. For the second quarter of 2026, we expect revenue to range from $922 million to $932 million.

This range represents an 18 to 19% increase over the second quarter of 2025, or a 10% organic growth rate. At the midpoint, commercial revenue is expected to grow between 7 and 9% to a range of 479 to $484 million. We expect residential revenue of 443 to $448 million, an increase of 32% to 34% year over year, or 12 to 14%. Organically adjusted EBITDA is expected to range between 160 and $180 million, representing a margin of 17 to 19%, or roughly 700 basis points higher than Q2 2025. Commercial adjusted EBITDA is expected to be between 160 and $170 million, a margin of 34 to 35%.

Residential adjusted EBITDA is anticipated to be positive in Q2 2026, ranging between break even and $10 million. Our adjusted EPS guidance for Q2 2026 calls for a range of 27 to $0.30 per share on 409 million weighted average shares outstanding for full year 2026. We are reaffirming our previous revenue guidance range of 3.78 to $3.82 billion, a 16 to 18% annual growth rate. Commercial revenue remains at a range of 1.955 to $1.975 billion and the residential revenue range remains at 1.825 to $1.845 billion.

Based on the strength of the first quarter and the expectation of continued personnel expense efficiencies, we now expect adjusted ebitda to range from 780 to 300 $820 million. This is an increase of $30 million at its midpoint and a full percentage point increase in margin. Our adjusted EPS range is also increasing for the full year. The accelerated share repurchase program in the first quarter retired more shares than we had forecast, and the previously mentioned expense reduction initiatives are primarily driving our guidance increase to adjusted EPS. Our new adjusted EPS guidance range is $1.32 to $1.39, an increase of $0.09 at the midpoint.

I will now turn the call back over to the operator for questions.

Question & Answers

Operator

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11. Again please limit yourself to one question. And our first question comes from Ryan Tomasello with KBW. You may proceed.

Ryan Tomasello

Thanks everyone. Two part question on bookings. First was the 67 million of net new in line with generally what you were expecting for the quarter and then second, there seems to be some variation in how we find investors are translating bookings into revenue growth expectations given our bookings don’t underpin 100% of the company’s revenue base. So Chris was hoping you could walk us through how you think about the appropriate math there around the percentage of bookings driven revenue and how that translates to the level of bookings needed to achieve your low to mid teens revenue growth targets embedded in your financial framework. Thanks.

Christian M. Lown — Chief Financial Officer

Yeah, thanks Brian. So, a couple. Sorry. Thanks Ryan. So a couple of comments there. First, as you heard from our comments, we reaffirmed our guidance range for revenue and increased our EBITDA guidance. So broadly in line with what we’re looking for from a net new perspective and from a revenue development perspective. And your second question is a detailed question. So let me sort of think about it. Let me try to break it down this way. Today around 15% of our revenue is non subscription. Then that increased as a result of the Domain and Matterport acquisition last year.

We are currently, if you look at our guidance, currently expecting revenue to grow around 550 million doll at the midpoint of our range and around 40% of this increase is from acquisitions or non subscription revenue growth. Therefore the remaining growth is around 330 ish million dollars which is the revenue driven by net new. So that is what 26 represents it. But I think then you’re rolling forward to sort of 27 and 28 and I think a couple building blocks there to think about. If you assume the non subscription revenue growth is sort of in the low double digits that results in subscription revenue needing to grow by around a billion dollars in total between 27 and 28.

I think what’s important to notice during that period, we’re expecting meaningful significant growth out of homes.com meaningfully faster than our other brands with our other subscription businesses also growing the low double digit range along with the other group which is consistent with our historic growth. Remember, timing has a big impact here obviously when these bookings happen and how that rolls into revenue. So I think those are sort of the building blocks. I also think most importantly is we are committed to delivering on the adjusted EBITDA targets we set out for 2028 and 2030.

And this can occur in a number of ways. We can deliver through our 15% revenue CAGR which we’re very committed to. We can overachieve our revenue targets and invest in additional growth opportunities which would, you know, continue to promote additional longer term growth. Or finally we can rationalize costs if revenue growth is less than 15%. Importantly, as Andy mentioned on his call, we are fully committed to our stated homes.com net investment number. We’re well on track to hit that number this year and we gave you guidance through 2030 and we will hit those numbers.

Our primary focus at COSTAR today is to drive revenue, to drive EBITDA growth and margin expansion through 2030 and beyond. But I think that Ryan gives you the building blocks to start thinking about your question.

Ryan Tomasello

Thanks Chris. Appreciate the detailed color.

Operator

Thank you. Our next question comes from Pete Christianson with Citi. You may proceed.

Peter Christiansen

Good evening. Thanks for the question. Really good script this quarter guys. Lots of like and appreciate the the transparency On a number of fronts. That said, I want to dig into bookings again a little bit here in particularly apartments pricing. You showed some really good rooftop growth last quarter and we know that you’re winning back some share there and some of that share has been lower priced opportunities. But also thinking about the competitive dynamic, how that’s changed and maybe that’s shifted the mix shift on tiering of ads there. Just wondering if you could give us a sense of what has been generally the pricing impact and maybe how that might be impacting overall bookings production. Thank you.

Andy Florance — Founder and Chief Executive Officer

I would comment on one point that I think commented on last quarter there. We picked up a lot of rooftops from rent.com so as they as that whole thing went the way it went, there was an opportunity that, that became a primary focus for our sales force to go after those rooftops when they were in transition. And so they put a lot of effort into that. That’s a once, you know, in a decade opportunity to try to do a share shift. And the nice thing is we weren’t buying those from anyone. We were just winning them in the organic market.

Now those advertisers had been with apartment guide rent.com through a bankruptcy and through a degration of a business over several years. So it tended to lean towards lower ARPU rooftops, you know, often lower rental rates, smaller unit counts, that kind of stuff that drove our, that has drove, driven for several quarters our rooftop revenue ARPU, whatever down somewhat. I’m not seeing unless Chris has got a different view on it. I’m not seeing a major shift in levels or depth advertising. The thing that really struck me was these folks coming out of rent.com were lower end customers, very important customers. They just happen to have more budget properties.

Peter Christiansen

Thank you.

Operator

Thank you. Our next question comes from George Tong with Goldman Sachs. You may proceed.

George Tong

Hi. Thanks. Good afternoon. Speaking with Apartments.com, the revenue growth moderated sequentially to 10% year over year over what would need to change to drive a re acceleration from here or do you think this is the right long term run rate growth for the platform?

Andy Florance — Founder and Chief Executive Officer

I think the thing that reaccelerates revenue growth is our target continued growth in the sales force as the revenue gets bigger and bigger. You need to have more salespeople to deal with the revenue opportunity. There’s clearly plenty of open opportunity out there. We are still relatively early in penetrating the opportunity. I think homes.com presents an important strategic opportunity that it can grow More traffic. It’s already our biggest syndication partner into apartments dot com. It allows us to strengthen our single family presence there and draw renters in from multiple angles and multiple perspectives.

So, you know, I think that, I think we can continue to improve on the current growth rate and I think we still remain significantly competitively advantaged. You want to add anything to that, Chris?

Christian M. Lown — Chief Financial Officer

No. That’s great.

George Tong

Very helpful. Thank you.

Operator

Thank you. Our next question comes from Alexei Gogolev with JPMorgan. You may proceed.

Alexei Gogolev

Hi, everyone.

Operator

Hello, Alexei.

Alexei Gogolev

Hi. Great to hear from you. Both you and Chris mentioned the sales productivity ramp with the headcount additions across the sales organization. What are you seeing in terms of ramp times or quota attainment? Maybe some productivity by cohort. And how does that inform your hiring pace for the rest of the year?

Andy Florance — Founder and Chief Executive Officer

It would vary by brand. So I think we’re seeing CoStar accelerating productivity per rep. And you know, I thought it was interesting to see that the broker sales, tenant sales are up in CoStar. That’s generally indication of improving commercial real estate market conditions and more robust selling opportunities on apartments.com as your revenues have grown and you need to keep growing the sales force to match. They’re handling a even at a 99% monthly renewal rate, they’re handling a larger absolute cancellation level.

So you need to keep growing that sales force and actually grows productivity as you grow the sales force on LoopNet. We definitely want to continue to grow that sales force. The asset based pricing will increase productivity for sure. But you have a relatively large base of revenue compared to the size of the salesforce and then and again ROI across all those sales forces. Very solid. I would say with homes.com you are still dealing with a very rookie sales force. I mean, it’s unprecedented to have that many salespeople with that little tenure given the fact that we really just launched that group a year or so ago.

I am spending myself a bit of time, more time now that I’ve got a little more free time on my hands with our salesforce and feel like we’re making some good, good headwind in improving Salesforce productivity. Headway improving Salesforce productivity. It feels good to be back in there working on Salesforce productivity and I see a lot of opportunity to improve salesforce productivity with a group like the homes.com group. We are going to be continuing to grow our sales force in the field because we’re seeing higher productivity in the field salespeople than we do in the centralized salesforce.

We’re also seeing high sales productivity with our New homes advertising salespeople@homes.com but I am also optimistic that we’re going to see productivity improvements with our inside sales team with homes.com so the growth in that group is really field and new home sales where the numbers are pretty good. And then I am working on bringing up the core inside group and I think we’re having some success there.

Christian M. Lown — Chief Financial Officer

Andy, the only thing I’d add is that it’s important to realize that we really started on this journey to increase our sales force roughly about this time last year. And so there’s been pretty significant increases in salesforce across all of our brands and they all came in at different times. For instance, LoopNet recently added a lot of salespeople to get to the number I talked about. And so while we do an incredible job tracking the cohorts, we look at their evolution. We track them on a 6 month, 12 month, 18 month cohort basis so we see the development that we want to see. But it is important to note that really we started on this journey basically about a year ago and accelerated through last year and we feel good about that productivity and cohort development. But this does take time to get them up to full productivity.

Andy Florance — Founder and Chief Executive Officer

I believe the number for apartments.com is at year five. They’re twice as productive as they were at the end of year one. So that is something where they it is like a multi year scale up and some people enter at a really high level. Some people scale up through a couple of years.

Alexei Gogolev

Thank you very much, Andy. Thank you Chris.

Operator

Thank you. Our next question comes from Stephen Sheldon with William Blair. You may proceed.

Stephen Sheldon

Hey, thanks for taking my question. Just wanted to follow up on the sales kind of capacity and productivity topic. You know, I guess high level. What has changed, if anything, in terms of where you’ll deploy incremental sales resources over the rest of the year and into next? You know, are there certain areas of strength where either by segment or geography where you’re maybe pushing the pedal more Are there on the flip side, are there any areas where productivity maybe isn’t progressing the way you’d expect where it could make sense to cut back and or potentially shift into other areas. So I guess from here where what’s changed in terms of your plans for incremental sales capacity investments?

Andy Florance — Founder and Chief Executive Officer

Sure. And I hope, I hope I give you a good brain dump of all things we’re thinking about there again I’m seeing and I’ll run through a couple different parts there. I am seeing really good results with our new home salespeople. The folks are going out and dealing with major home builders and giving them enhanced exposure on homes.com those folks are very productive. We will grow that a measured pace because you don’t want to slam too many people into a segment at once. We are seeing, we are going to invest in adding 50 more folks or so into our field sales for homes.com because those field sales folks who can actually have one on one meetings, show up at open houses, show up at brokers offices, are more productive than the people in the inside sales work.

We are going to do that in batches of five cities at a time. So we might hire up eight people in Washington, Dallas, three other markets, stabilize it, have an RD in each market, do the next round. We would likely prioritize our marketing spend SEM investment around those markets. We’re building that field sales team up. We’ve always felt that the field sales team through time would be the most productive for homes.com and then I’m actually enjoying working a little bit more with the inside sales team making sure that they’ve got the right value propositions, improving their pitch and we believe that we’ve got the right number.

But we want to tighten the pitch, the service and the pricing. Frankly, I think the product is currently underpriced. When I look at the kind of benefit these folks are getting when they get the marketing benefit of homes.com, we’re not charging enough and we need to be bolder about that pricing because we’re delivering enormous value on the apartments.com group. I would like to see our field sales team continue to grow at a measurable pace. The field sales team with apartments.com is consistently the most productive.

And then with LoopNet.com, I’d like to see that field sales team keep growing at an incremental measured pace because again their headcount is too close, is not quite adequate as a ratio relative to their growing revenue base. And I think with Ben focusing on the asset based pricing effectively now, I think that there’s a lot of opportunity there. We are growing the Matterport sales team that will again we’re doing that in measured batches of, you know, probably 20 at a quarter, something like that. So we’re not, we’re holding our productivity up but it is nice to be back in the game and spending more time on sales than on other things.

Christian M. Lown — Chief Financial Officer

Yeah. And the Matterport comment was a great one because it’s such a huge opportunity given the limited sales force we had when we acquired the company. So we’ve really put in place go to market TAM strategies, etc. And we’re expecting great things out of Matterport Salesforce over the coming years.

Stephen Sheldon

Good to hear. Thank you.

Operator

Thank you. Our next question comes from Jeff Mueler with Baird. You may proceed.

Jeffrey Meuler

Yeah, thanks. Can you just help put the sequential trends in net bookings the last few quarters in context? This is the third straight quarter of sequential decline in the net bookings number. And if you started picking up the pace of hiring a year ago, I would think that productivity would be building over the last year. And I get it. Q2 25 was a good quarter, but this quarter is still quite a bit below what it was in like Q1 of 23 before you launched Homes and when you had a much smaller sales force. So I know you’re getting a million questions on sales productivity. I think we’re struggling to understand it. Thank you.

Christian M. Lown — Chief Financial Officer

Yeah, I mean I’m not sure the angle. I understand. Obviously we started putting out the quarterly total bookings. We thought it was important for people just to see the trends. Obviously there’s variability, as you said last year we had a very interesting situation right in the first quarter. It was deemed weak. The second quarter was great. So there’s some variability. But I think we feel really good about the opportunity set. The underlying productivity we’re seeing out of the salesforce and should really start the flywheel should really start in the second half of next year. And so I think we feel really good about the productivity. I think the hiring was a meaningful amount across our brands and that creates a little bit of lag effect. But I think we feel good about the direction

Andy Florance — Founder and Chief Executive Officer

And I think we have the same conversation every first quarter. It’s like Groundhog Day. So our first quarter tends to be a little lighter. Our second quarter is always tends to be our stronger. So when you talk about 3/4 down, well, second quarter is our strongest. Remember as I mentioned the partamentalize we enter, that’s a huge bookings opportunity for the residential segment and we enter that this year with incredibly strong product. With Apartments AI Homes being a major contributor, our product teams have been pushing aggressively to make sure that we have a bunch of new rental features in homes.com and we’ll enter that in a strong place. But you’re still dealing with, you know, again, you don’t have very many folks with more than a year of experience@homes.com so it’s still a relatively junior salesforce. It won’t be a Junior Salesforce In 2, 3/4 it will start to Move into post rookie status.

Jeffrey Meuler

Okay, thank you.

Operator

Thank you. Our next question comes from Curtis Nagle with Bank of America. You may proceed.

Curtis Nagle

Okay, great. Thanks very much. Yeah. So just in the press release, you cited some pretty strong numbers in terms of engagement member agents coming on from homes.com right now, kind of near term. How is this translating into revenue momentum within the segment? Could you comment on that?

Andy Florance — Founder and Chief Executive Officer

Sure. So I would say the most important thing when you look at translating into revenue momentum is now that we have about a year or so with this. And we, I Guess we had 10,000 users in the Q1, Q2 of 25. Now we’re up to 35,000. We have a lot more information on how the product is impacting their earnings and the results are phenomenal. So that gives me comfort that we can actually begin to bring the ARPU up pretty materially and that we’ll have growing productivity with that group. And you’ve got good synergies with Apartments.com and their productivity. So all of that is why we have the confidence that we are building revenue momentum.

Curtis Nagle

Okay, not to belabor a point, but it’s obviously top of mind. You know, would you be willing to provide bookings guidance for 2Q just at a minimum, you know, so we don’t continue to see such a mismatch between internal expectations and investor expectations.

Christian M. Lown — Chief Financial Officer

So bookings is a number we’ve never guided to. There’s only, I think two or three of you actually put out a bookings number. I think if you look at it back historically, you see variability in quarters. Last year, Q1 2025 was 18% a booking, bookings for the full year. So, you know, you look at these in different elements, but we provided booking numbers for homes.com because we wanted to increase transparency, wanted people to understand the investment, what’s going on. But, you know, getting into guidance around bookings is not something we’re going to do.

Andy Florance — Founder and Chief Executive Officer

And again, remember, bookings are up 20% quarter over quarter,

Christian M. Lown — Chief Financial Officer

Year Over year.

Andy Florance — Founder and Chief Executive Officer

Year over year.

Curtis Nagle

Okay, I appreciate it. Thank you.

Operator

Thank you. Our next question comes from Surinder Thind with Jefferies. You may proceed.

Surinder Thind

Thank you. Andy, can you maybe just talk about the decision or the pricing strategy in homes.com at this point and the idea of raising pricing for new members on May 1, just why not maybe wait a year? Obviously the metrics are very supportive of that pricing action, but just maybe to build the user base further or help us understand the timing there?

Andy Florance — Founder and Chief Executive Officer

Well, I think we can do both. I think we can grow the user base and capture more of the value, particularly in the folks who are earning under 250,000 a year and agents earning under 250,000 a year. There are many, many of those agents. I’m looking at the close rates for the folks who are well trained who have the upper half of homes.com salespeople and the close rates are extremely high. It feels like they’re north of 50%. And once you get to that high close rate, you start to feel that you need to bring the price up.

I think that there is room to recognize more value and at the same time continue to keep the same growth and possibly accelerate the growth in the number of members. There are a couple of places in looking at the different cohorts of agents and profile of agents, there are a couple of areas, limited, that will probably bring the pricing down a touch. But in the biggest bulk of cohorts of agents, you know, we’re leaving too much on the table. We’re providing a lot of value and I think we can push price and keep headcount growing, keep member count growing and, you know, we’ll play with it in each of the cohorts to optimize it. But feel pretty good about that right now.

Surinder Thind

Thank you.

Operator

Thank you. Our next question comes from Brett Huff with Stevens. You may proceed.

Brett Huff

Thanks for taking the question and good evening, guys. Thanks for the ROI stats on homes.com that’s super helpful and something we’ve been focused on. My question is on Matterport. We’ve been feeling that that’s a really big underlying structural kind of piece of the business. That’s under appreciated. Can you talk a little bit about. You gave us some great stats on lingering on the site and things like that. So it’s clearly just a great enhancer to all of the products that you have. But can you talk balancing that and how you price it and distribute it just to improve the product generally and then also talk a little bit about Matterport as a function or a module of data that’s going to help you differentiate and remain sort of on the edge of proprietary data. Because I kind of heard both of those themes and I’m wondering if there’s a pricing given. Trying to maybe do both of those. How do you think about pricing and distribution of that? Thank you.

Andy Florance — Founder and Chief Executive Officer

Okay, so in pricing and distribution, I mean, there are a lot of elements there. So in pricing, first of all, if I go from the last question backwards, part of my thinking around bringing the price up a bit in the homes.com is a core value proposition. There is The Matterports and the exterior three Ds we build and then the floor plans we build, that delivers a lot of value. I believe there’s. And you heard the conversion stats. When people have a matterport they’re getting 30x the views, they’re getting 54 apartments, getting 54 times the tours.

So there’s a part of the Matterport pricing that’s actually embedded in a monthly subscription fee or a monthly advertising fee for either apartments or for land or for LoopNet or for homes.com so you can recognize a little bit of pricing value there with Matterport, with Domain it’s a little bit different there. We are using Matterport to get people to upgrade to higher depth level advertising. So getting price appreciation, but you’re actually giving them value. So effectively you’re selling a Matterport when you do that and there’s a lot of that going on and we’re getting a very favorable response to that in Australia.

A big change with Matterport is when we acquired Matterport they were very focused on the mass subscription of low end accounts using the iPhone as the capture device. We actually feel that the professional user of Matterport, the real estate agent, the leasing company, the architectural engineering, construction company, is the biggest part of the market and they want speed of capture, quality of capture. So we are refocusing folks towards a more aggressive price point on the Matterport Pro 3 camera and then a higher SaaS subscription price for regular users.

So we’re pulling the hardware down and focusing more on the SAS subscription side. And that’s sort of a razor and razor blade strategy. We are working aggressively on the Matterport Pro 4 camera. I know there’s an engineering team meeting right now in Mountain View on reviewing the final specs on that. So there you’re going to have more SaaS revenue, slightly higher price points, lower hardware revenue and then the pricing is reflected in across the board in subscription rates or advertising rates with LoopNet apartments, homes and land in terms of competitive differentiation.

Very excited about that. I mean I described the X ray function. It doesn’t do it justice. The ability to do what our team is, our brilliant team is doing, which is produce these Gaussian splats that make an exterior model that allows you to see the neighborhood fly around the house. And then as you approach the house, the walls disappear and you move into the house or as you approach, as you fly a synthetic drone, a virtual drone towards the house, the ability to take off the roof and look into the second floor, pull it up and look into the first floor the ability to do the side by side comparisons in aec.

We have a very robust product roadmap right now that will continue to differentiate us and we don’t feel that there’s anyone really keeping up with our innovation pace or development pace. And the earnings call sounded a little bit like a Matterport earnings call because it sort of came up in every other thing I said. But to the credit of the development team and the leadership team at Matterport, they’re leaning into facilitating success in all of our products with that differentiating technology. It’s good stuff.

Brett Huff

Great. I appreciate it.

Operator

Thank you. I would now like to turn the call back over to Andy Florence for any closing remarks.

Andy Florance — Founder and Chief Executive Officer

Oh my gosh. Well I’d like to thank everyone for joining us on this first quarter earnings call and I look forward to reporting our progress in the second quarter earnings call. Thank you very much for joining us.

Operator

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.