Oct 27, 2026 earnings call — Margin expansion and M&A drive results
CoStar reported revenue of $952 million and record adjusted EBITDA of $229 million in Q3.
Revenue $1.0B (est $0.9B) · EPS $0.38 (est $0.34) · Next-quarter revenue outlook $1.0B
Key quotes
"Net new bookings in the third quarter were $37 million, down from $84 million in the third quarter of last year."
"A deep review of our expense base over the last 2 months identified approximately $200 million of additional cost efficiency opportunities across procurement, organizational design, technology, infrastructure, marketing effectiveness and post-acquisition integration."
"Today, we announced a definitive agreement to acquire Vexcel, the operator of the world's largest and highest-quality aerial imagery program."
Analyst Q&A 15
bookings gap between demand and sales capacity
Q (Goldman Sachs): Analyst asked how much of current demand is present but unserved versus how much demand must improve before more salespeople raise bookings.
A: Management did not answer in this transcript.
drivers of revenue vs margin in 2027
Q (Peter Christiansen · Citi): Analyst asked whether 2027 growth will come from bookings re-acceleration, margin expansion, or both, and which will matter more.
A: They said it will be a combination: there is bookings expansion opportunity and also room for margin expansion through efficiencies, while still investing efficiently in new revenue drivers and salespeople.
"I think it would be a combination of the two, for sure." — Andrew Florance (CEO)
Vexcel: CapEx and operations
Q (Alexei Gogolev · JPMorgan): Analyst asked about CapEx, aircraft and capture needs, data rights and exclusivity, contract lengths, sales approach and dedicated reps.
A: They said they will sell both standalone data contracts and through existing CoStar sales relationships, plan product integration into CoStar, and expect limited incremental CapEx potentially up to $20 million over two years; current annual CapEx runs about $8 million to $10 million.
"It ranges $8 million to $10 million a year." — Robin Rossmann (CFO)
multifamily Q4 growth and tactics
Q (Huan Chong · KBW): Analyst asked what Q4 multifamily revenue growth assumption is, visibility given bookings pace, and any tactical changes in multifamily strategy.
A: They said they are embedding technology into clients' websites to prove lead sources, Homes.com lead flow is up and will feed Apartments.com, and guidance assumes mid-single-digit growth for the fourth quarter.
"And then just to add on the growth rate being assumed for the fourth quarter, it is mid-single digits." — Robin Rossmann (CFO)
sales force issues and staffing gaps
Q (Curtis Nagle · BofA): Analyst asked where the biggest holes in the sales force are, whether cuts went too far, if wrong tenured people are in place, and whether there's attrition.
A: They said the issue varies by brand: LoopNet held up better, while CoStar and Apartments recruiting/management could have done better; Homes had many new-entry hires causing expected churn and they are changing recruiting and incentives to grow field sales over several years.
"So I do not want to diminish the accomplishments of a lot of the inside sales teams." — Andrew Florance (CEO)
metrics showing sales capacity issue in Apartments.com
Q (Jeffrey Meuler · Baird): Analyst asked which metrics show sales capacity is the main issue and whether regrettable attrition among top sellers is a concern.
A: They said most attrition is among lower performers at Homes inside sales, top performers mostly stayed, core metrics like unique audience and lead flow are growing, field reps show very high gross monthly sales, and adding reps lowers cancellations by enabling better servicing.
"the gross monthly sales by our field sales team is 6,350 per month per rep, which is by far the highest in the group." — Robin Rossmann (CFO)
AI, data ownership, and Apartments.com content
Q (Brett Huff · Stephens): Analyst asked for updates on AI integration, proprietary data share for Apartments.com, and how they keep data proprietary amid LLM changes.
A: They said Apartments.com was featured by ChatGPT, LLM-sourced leads remain low single-digit, traffic and lead metrics are growing, Homes.com feed is up 450%, and they are producing more proprietary content and imagery that remains largely not visible to the broader internet.
"We are developing more and more data than we have ever done before." — Andrew Florance (CEO)
$200 million cost savings breakdown
Q (Stephen Sheldon · William Blair): Analyst asked for detail on the expected $200 million savings next year and whether Homes.com $100 million improvement is included.
A: They said the $200 million is on top of the Homes.com improvement, and it splits roughly into three equal parts: organizational efficiencies, integration synergies, and procurement/marketing ROI improvements.
"At a high level, the $200 million you can split into three buckets." — Robin Rossmann (CFO)
2028 EBITDA reaffirmation reasoning
Q (Surinder Thind · Jefferies): Analyst asked why 2028 adjusted EBITDA was reaffirmed despite identified savings, and whether savings will be reinvested rather than increase the long-term guide.
A: They said they have not yet redone the full long-term planning and forecasts; the current focus is on near-term improvements to be realized in 12 to 18 months and decisions on allocating savings to margin or investments will be made later.
"Yes, we haven't gone through a whole new planning cycle and redone forecasts for the long term." — Robin Rossmann (CFO)
drivers of churn at Apartments.com
Q (Nicholas Jones · BNP Paribas): Analyst asked what is driving churn beyond servicing—are customers moving to competitors or doing their own SEM, and what discussions happen with churners.
A: They said servicing remains strong with high NPS, churn pressures come from negative rent growth and elevated vacancy that drive owners to cut costs or try their own SEM, competitors' aggressive pricing, and a mix shift to smaller properties (under 50 units) that have higher cancellation rates.
"As you'll know, we have significantly grown the inventory that we have in under 50 units." — Robin Rossmann (CFO)
Homes.com agent feedback and Platinum rollout
Q (Andrew Boone · Citizens): Analyst asked what agents are thinking about churn, how much runway remains, and how the Platinum product rollout is progressing.
A: They said major real estate portals derive most revenue from depth advertising, Homes.com launched Platinum in September as the first depth product priced per property with annual contracts and added services, and this starts a long journey to sell multiple depth levels.
"It is an annual contract, and so you can rotate one property at a time up through that." — Andrew Florance (CEO)
CoStar Suite bookings pipeline and new products
Q (Scott Wurtzel · Wolfe): Analyst asked if new CoStar Suite products can help re-accelerate bookings and timing for those bookings.
A: They said several initiatives could drive bookings: Australian CoStar bookings mainly in Q1 and Q2 next year, some bookings this year, Real Estate Manager and Visual Lease integration later in 2027, Vexcel enhancements late 2027, and near-term strength in CoStar Debt Solutions and benchmarking.
"The bulk of that would happen in -- those bookings would begin happening in the first and second quarter." — Andrew Florance (CEO)
personal AI agents and Apartments.com model impact
Q (Jason Haas · Wells Fargo): Analyst asked if personal AI agents searching for apartments will change Apartments.com's business model and how they might adapt.
A: They said personal AI agents are bringing users back to Apartments.com to transact, and their content, imagery, Matterport and transaction systems keep the sites as the destination; integrations with ChatGPT show good results and products are evolving to improve transaction-stage value.
"And ultimately, those models are bringing people back into Apartments.com to do the transaction." — Andrew Florance (CEO)
where to expand sales headcount next 180 days
Q (Craig Huber · Huber Research Partners): Analyst asked for granularity on where they expect the biggest percentage growth in sales forces over the next 180 days.
A: They said they will grow in Apartments.com, CoStar, and field home sales, move to in-market dedicated recruiters in about 20 top cities, and target roughly 30% field sales growth by aligning recruiting and incentives with local sales leaders.
"Apartments.com, CoStar, and field home sales are where the greatest growth would come from." — Andrew Florance (CEO)
interest rates impact on CoStar bookings
Q (Ashish Sabadra · RBC): Analyst asked if higher interest rates have lengthened sales cycles or hurt bookings in CoStar Suite.
A: They said there are mixed drivers: leasing for higher-grade office is improving with return-to-office, investment sales volume is slowing with higher rates, banks show more interest in portfolio risk views which increases demand, and there is no clear overall negative impact on CoStar yet.
"But at the same time, you see more interest from banks in what is the risk -- where is the risk profile in their portfolios in a rising interest rate environment." — Andrew Florance (CEO)