AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · A researched proprietary database integrated into commercial intelligence services is supported by repeated subscriber growth alongside price increases. This demonstrates a commercial information advantage, although comparative superiority and replication costs are not quantified.
durability · 2/4 · Recurring commercial price and subscriber gains and stable recent annual renewal rates support persistence. Non-exclusive inputs, observed copying and uncertain database protection limit confidence in longer-term defensibility.
customer dependency · 2/4 · Integrated professional workflows and 89% annual-contract renewals demonstrate recurring usefulness. They do not establish that customers cannot substitute another service or quantify migration friction; annual contracts create only bounded commitment.
erosion resilience · 2/4 · Commercial pricing and subscriber growth persist despite competitive exposure. Residential average-price declines and actual content copying show limits to resilience, while technological obsolescence remains a disclosed possibility rather than a demonstrated outcome.
Pricing power63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · CoStar repeatedly realized inflation-based price increases, and LoopNet achieved higher average listing prices with volume growth. Residential upgrades and price increases in 2024 were followed by lower average prices in 2025 and first-half 2026. Group evidence is mixed, and mix effects are not isolated.
retention · 3/4 · Reported renewals of 90%, 89% and 89% for 2023–2025 demonstrate strong repeat demand for subscriptions with terms of at least one year. This is direct renewal evidence, but it excludes shorter-term and transactional business and does not establish platform-specific retention.
margin resilience · 2/4 · Gross margin declined from 80% to 79% in 2025 and from 79% to 78% in first-half 2026, while residential EBITDA losses narrowed substantially. Acquisition amortization and operating mix complicate attribution to pricing, supporting a mixed resilience assessment rather than a moat inferred from margin levels.
contractual freedom · 3/4 · Subscription contracts generally renew automatically, with many rates adjustable under contract provisions or renegotiation at renewal. Repeated realized increases demonstrate practical repricing ability, although existing terms constrain timing and the disclosures do not establish unrestricted unilateral pricing.
Predictability84
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 2.88
- Positive FCF years (%)
- 80.00
- FCF margin volatility (pp)
- 10.15
Financial strength75
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 98.03
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 0.00
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 1.14
- Interest coverage (x)
- -3.79
- Current ratio (x)
- 2.84
Capital allocation56
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 2.73
- 3-year average dilution (%)
- 1.70
- 3-year average SBC / revenue (%)
- 4.23
- cashConversionGrade
- 59.30
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash generation and completed repurchases provide actual outcomes, but 2025 investing outflows substantially exceeded operating inflows and outstanding shares increased despite repurchases. Further repurchases, the agreed Zonda acquisition and construction obligations add commitments. Improving residential results are encouraging, but investment returns and future spending reductions are not yet demonstrated.
incentive alignment · 2/4 · Actual March 2026 deferred-compensation equity awards, ownership guidelines and approved greater emphasis on multi-year EPS and relative TSR support alignment. The prior revenue-focused design allowed maximum payout near target, while matching awards add compensation cost. Ownership compliance and results under the revised design are not supplied.
execution · 3/4 · Repeated commercial subscriber and pricing growth, increased 2025 net new bookings and substantially narrower first-half 2026 residential EBITDA losses demonstrate execution. Acquisition contributions and lower residential average prices limit attribution to organic progress; future network effects and break-even plans are not counted as achieved.
governance · 2/4 · Disclosed independent chair appointment, compensation redesign, clawback policies and exclusion of executives from setting their own compensation support functioning oversight. These changes followed shareholder feedback, their effectiveness has a short record, and the temporary capital allocation committee ended in January 2026.
Evidence
Our principal services are described in the following paragraphs: Commercial Real Estate CoStar CoStar is our subscription-based integrated platform for commercial real estate intelligence, which includes information about commercial real estate properties, properties for sale, comparable sales, tenants, space available for lease, industry professionals and their business relationships, industry news, and market status.
Services: integrated CoStar commercial real estate platform · Filed 29/07/2026
14 COSTAR GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Cost of Revenue Cost of revenue principally consists of salaries, benefits, bonuses, stock-based compensation expenses, and other indirect costs for the Company's researchers who collect and analyze the real estate data that is the basis for the Company's real estate information, analytics, and online marketplaces services and for employees who support these products.
Accounting policies: research collection and analysis underlying services · Filed 29/07/2026
A large number of automated data quality tests check for potential errors, including occupancy date conflicts, available square footage greater than building area, typical floor space greater than building area and expired leases.
Business: automated research data quality tests · Filed 22/02/2024
•Performing periodic research audits and field checks to determine if we correctly canvassed buildings;
Business: research audits and field checks · Filed 22/02/2024
Revenue increased $281 million, or 11%, to $2.7 billion, driven by the following: Commercial Real Estate revenue increased $72 million, or 5%, to $1.5 billion due to: •an increase in CoStar revenue of $60 million, or 5%, due to an increase in subscribers and inflation-based price increases and $7 million of revenue from the Visual Lease Acquisition completed in November 2024, •an increase in LoopNet revenue of $17 million, or 6%, due to an increase in the average price per listing and an increase in the number of listings, and •a decrease in Other Commercial Real Estate of $5 million or 6%, due to a reduction in auction revenue.
MD&A: 2024 commercial subscriber, pricing and listing results · Filed 26/02/2026
Revenue increased $511 million, or 19%, to $3.2 billion, driven by the following: Commercial Real Estate revenue increased $272 million, or 18%, to $1.8 billion due to: •an increase in CoStar revenue of $103 million, or 9%, due to an increase in subscribers and inflation-based price increases and an increase of $35 million of revenue from the Visual Lease Acquisition completed in November 2024, •an increase in LoopNet revenue of $30 million, or 11%, due to an increase in the number of paid listings and an increase in the average price per listing, as well as $6 million of CRE listings revenue from the Domain Acquisition in August 2025, and •an increase in Other Commercial Real Estate of $139 million, or 181% due to $147 million of revenue from the Matterport Acquisition, partially offset by a reduction in auction revenue.
MD&A: 2025 commercial revenue drivers · Filed 26/02/2026
Revenue increased by $309 million, or 20%, to $1.8 billion, driven by the following: 51 Commercial Real Estate revenue increased by $98 million, or 11%, to $953 million due to: •an increase in CoStar revenue of $53 million, or 9%, due to an increase in subscribers, inflation-based price increases, and additional sales of STR Benchmarking, •an increase in LoopNet revenue of $23 million, or 15%, due to an increase in the number of listings, as well as an increase in the average price per listing and the Domain Acquisition completed in August 2025, and •an increase in Other Commercial Real Estate revenue of $22 million, or 24%, primarily due to the Matterport Acquisition completed in February 2025, partially offset by lower transaction volume on Ten-X.
MD&A: first-half 2026 commercial revenue drivers · Filed 29/07/2026
For the trailing 12 months ended December 31, 2025, 2024, and 2023, our contract renewal rates for existing company-wide CoStar Group subscription-based services for contracts with a term of at least one year were approximately 89%, 89%, and 90%, respectively; and, therefore, our cancellation rates for those services during the same periods were approximately 11%, 11%, and 10%, respectively.
Operating metrics: 2023–2025 renewal and cancellation rates · Filed 26/02/2026
These license agreements generally grant us a non-exclusive license to use the data and images in the creation and supplementation of our online marketplaces, information, and analytics.
Business: non-exclusive third-party data licenses · Filed 26/02/2026
However, current law may not provide for adequate protection of our databases and the actual data.
Risk factors: limitations of database legal protection · Filed 26/02/2026
We find our proprietary content on competitors’ sites.
Risk factors: observed proprietary content on competitors' sites · Filed 26/02/2026
Residential Real Estate revenue increased $239 million, or 20%, to $1.5 billion due to: •an increase in the number of agents and properties advertised on our network, partially offset by a reduction in average price and •$95 million of revenue from the Domain Acquisition completed in August 2025.
MD&A: 2025 residential volume growth and lower average price · Filed 26/02/2026
Residential Real Estate revenue increased by $211 million, or 32%, to $869 million, primarily due to: •$131 million of revenue from the Domain Acquisition completed in August 2025 and •an increase in the number of memberships and properties advertised on our network, partially offset by a reduction in average price.
MD&A: first-half 2026 residential revenue drivers and lower average price · Filed 29/07/2026
To be successful, we must be able to quickly adapt to changes in the industry, as well as rapid technological changes, including AI Technologies, by continually enhancing our information, analytics, and online marketplace services.
Risk factors: need to adapt services to technological change · Filed 26/02/2026
•Online marketing services, internet listing services, mobile software applications or data exchanges targeted to commercial real estate brokers, buyers and sellers of commercial real estate properties, insurance companies, mortgage brokers and lenders, such as Reed Business Information Limited and its Estates Gazette and Radius Data Exchange products, SquareFoot, officespace.com, Brevitas, Catylist & Commercial Exchange (part of Moody's), Altus Group & Commercial Property Search (part of Reonomy), Digsy, Quantum Listing, RealNex MarketPlace, Rofo, CIMLS, CompStak, Rightmove, Yardi (CommercialEdge), CREXi, TotalCommercial.com, DebtX, Real Capital Markets, VTS, TenantBase and Spacelist;
Competition: named commercial property marketing and information competitors · Filed 22/02/2024
•Publishers and distributors of information, analytics and marketing services, including regional providers and national print publications, such as CBRE Economic Advisors, Marshall & Swift, REIS Network (part of Moody's), Real Capital Analytics, Real Capital Markets, Reonomy, Yardi Matrix, RealPage and its Axiometrics business, Altus Insight and Altus RealNet (Canada);
Competition: named information and analytics competitors · Filed 22/02/2024
Our services are typically distributed to our customers under subscription-based license agreements that generally renew automatically, the majority of which have a term of at least one year.
Business model: automatic renewals and subscription terms · Filed 29/07/2026
Upon renewal, many of the subscription contract rates may change in accordance with contract provisions or as a result of contract renegotiations.
Business model: subscription rate changes at renewal · Filed 29/07/2026
Residential Real Estate revenue increased $209 million, or 21%, to $1.2 billion due to: •an increase in the number of agents and properties advertised on our network, •an increase of $83 million from customers selecting higher priced packages on renewals and increases in prices for existing customers, and 47 •an increase of $39 million from a full year's results of OnTheMarket, which was acquired in December 2023.
MD&A: 2024 residential renewal package upgrades and existing-customer price increases · Filed 26/02/2026
Gross profit increased $383 million, or 18%, to $2.6 billion in 2025, and the gross profit percentage decreased from 80% to 79%.
MD&A: 2025 gross profit and gross margin · Filed 26/02/2026
Gross Profit and Cost of Revenue. Gross profit increased by $237 million, or 20%, to $1.4 billion, and the gross profit margin decreased from 79% to 78%.
MD&A: first-half 2026 gross profit and gross margin · Filed 29/07/2026
The increase in cost of revenue primarily included: •an increase in amortization expense for the acquired technology and trade names from the Matterport Acquisition and Domain Acquisition, •an increase in personnel costs of $12 million related to additional headcount from the Matterport Acquisition and Domain Acquisition, partially offset by lower headcount in existing brands, •an increase in software and equipment costs of $9 million, primarily driven by web hosting costs from the Domain and Matterport Acquisitions, and to a lesser extent, increased spending within existing brands, •an increase in data and content expense of $9 million, largely due to the Domain Acquisition, •an increase in office supplies expense of $5 million driven by the increased headcount from the Domain Acquisition, •an increase of $4 million in credit card processing fees, and •an increase of $2 million in costs related to sales of digital twin capture equipment and services attributable to the Matterport Acquisition completed in February 2025.
MD&A: first-half 2026 acquisition, personnel, hosting and data costs · Filed 29/07/2026
The decrease in cash, cash equivalents and restricted cash for the year ended December 31, 2025 was primarily due to $2.8 billion of cash used in investing activities and $559 million of cash used in financing activities, partially offset by cash provided by operating activities of $430 million.
Liquidity: 2025 investing, financing and operating cash flows · Filed 26/02/2026
During the year ended December 31, 2025, we repurchased 7.1 million CoStar Group Shares for an aggregate cost of $500 million under the Prior Stock Repurchase Program, including shares repurchased under an ASR agreement.
Capital allocation: completed 2025 repurchases · Filed 26/02/2026
During the six months ended June 30, 2026, the Company also repurchased $87 million of CoStar Group Shares pursuant to a 10b5-1 Plan, resulting in total repurchases of 13.8 million CoStar Group Shares for an aggregate cost of $589 million under 36 COSTAR GROUP, INC.
Equity note: first-half 2026 repurchase spending · Filed 29/07/2026
Zonda Agreement. In May 2026, we entered into a definitive agreement to acquire Zonda for approximately $800 million in cash.
Development and investments: definitive Zonda acquisition agreement · Filed 29/07/2026
As of June 30, 2026, we were obligated to spend an additional $46 million as construction service is performed and expect to amend these contracts as the project advances.
Development and investments: remaining headquarters construction obligation · Filed 29/07/2026
(3) Represents a significant non-cash item included in the personnel costs above Six Months Ended June 30, 2026 2025 Commercial Real Estate Residential Real Estate Total Commercial Real Estate Residential Real Estate Total Revenue(1) $ 953 $ 869 $ 1,822 $ 855 $ 658 $ 1,513 Less: Personnel 450 345 795 410 314 724 Marketing 39 408 447 37 400 437 General and administrative(2) 175 167 342 187 137 324 EBITDA $ 289 $ (51) $ 238 $ 221 $ (193) $ 28 Stock-based compensation expense(3) 55 25 80 63 19 82 Acquisition and integration related costs 4 8 12 22 4 26 Restructuring and related costs 2 2 4 4 2 6 Settlements and impairments (17) (1) (18) 2 7 9 Adjusted EBITDA $ 333 $ (17) $ 316 $ 312 $ (161) $ 151 __________________________ (1) See Note 3 for details of revenue disaggregated by segment.
Segment results: first-half 2026 and 2025 spending and EBITDA · Filed 29/07/2026
Common stock, $0.01 par value; 1.2 billion shares authorized at December 31, 2025 and 2024; and 425.0 million issued and 417.9 million outstanding as of December 31, 2025 and 409.5 million issued and outstanding as of December 31, 2024
Balance sheet: issued and outstanding shares at year-end 2025 and 2024 · Filed 26/02/2026
ROBUST STOCK OWNERSHIP GUIDELINES • Our executive officers and directors are subject to robust stock ownership guidelines: directors 5x annual cash retainer, executives 2x base salary and CEO 10x base salary.
Proxy summary: executive and director stock ownership guidelines · Filed 30/04/2026
The DSUs and Matching RSUs awarded pursuant to the NEOs’ elections with respect to their 2025 cash incentive compensation were issued in March 2026.
Executive compensation: actual March 2026 deferred and matching equity awards · Filed 30/04/2026
2025 DESIGN UPDATED DESIGN Weighting: 40% Weighting: 80% (CEO) | 60% (other NEOs) 2025-2027 Revenue Metric (100%) Three-year Adjusted EPS Metric (75%) Threshold (50% payout) 80% of Target Threshold (50% payout) 90% of Target Target (100% payout) 100% of Revenue goal Target (100% payout) 100% of EPS goal Max (200% payout) 102% of Target Max (200% payout) 110% of Target Super Stretch (250% payout)(1) 115% of Target Relative TSR Modifier Relative TSR Metric (25%) Threshold (80% modifier) 25th percentile Threshold (50% payout) 30th percentile Target (100% modifier) 50th percentile Target (100% payout) 55th percentile Max (120% modifier) 75th percentile Max (200% payout)(2) 80th percentile Super Stretch (250% payout)(1),(2) 90th percentile (1) Payout above 200% achievable only if “Super Stretch” target is reached.
Executive compensation: prior and approved updated performance award designs · Filed 30/04/2026
Shaw’s and Third Point’s designees) to support a comprehensive review of our capital structure, capital allocation priorities, and financial targets Accelerated the completion of a $500 million share repurchase program initiated in 2025 Appointed a new independent Board Chair Developed a plan unanimously approved by the Capital Allocation Committee to moderate investment in Homes.com by $300 million in 2026 and $100+ million annually thereafter to achieve break-even exiting 2029 Authorized a new $1.5 billion repurchase program in January 2026 Acted on stockholder feedback, approved a redesigned executive compensation program for 2026, featuring more rigorous and quantitative goals, enhanced transparency, and a simplified structure Deployed AI technology initiatives across the entire CoStar Group organization and enhancing and expanding commercial product offerings 2026 PROXY STATEMENT 4 Table of Contents PROXY SUMMARY SAY-ON-PAY ENGAGEMENT & RESPONSIVENESS In addition, our Board and Compensation Committee Chairs, supported by our management team, met with stockholders in response to the 2025 Say-On-Pay vote.
Proxy summary: governance changes, compensation redesign and planned investment moderation · Filed 30/04/2026
Florance. Term of Committee April 5, 2025 – January 27, 2026 Role and Responsibilities The Capital Allocation Committee met six times between April 2025 and December 2025, and its authority automatically terminated following its delivery of its final recommendations to the Board on January 27, 2026, in accordance with the terms of its charter.
Governance: capital allocation committee meetings and January 2026 termination · Filed 30/04/2026
The company has a robust clawback policy that provides for mandatory recovery from current and former officers of cash and equity compensation that were erroneously received in the event of an accounting restatement as well as a supplemental clawback policy that expands the ability to recover compensation, including time-based equity, in certain misconduct-related circumstances
Compensation policies: mandatory and supplemental clawbacks · Filed 30/04/2026
No NEO, including the CEO, has a role in determining their own compensation.
Compensation governance: executives' exclusion from determining their own compensation · Filed 30/04/2026
With the bulk of the investment phase complete, Homes.com is generating positive network effects across our ecosystem, contributing to improved performance at Apartments.com and enabling broader technology integration, including advancements in AI.
Chair letter: assertion of Homes.com ecosystem network effects · Filed 30/04/2026
Revenue from our subscription-based contracts with a term of at least one year was approximately 73% and 79% of total revenue for the trailing 12 months ended June 30, 2026 and 2025, respectively.
Business model: revenue share from subscriptions with terms of at least one year · Filed 29/07/2026
The decrease in the percentage of revenue from our subscription-based contracts with a term of at least one year was primarily due to the Domain product which are sold as premium listings for individual properties, as well as the transactional products and services sold by Matterport.
Business model: acquisition-related explanation for changing subscription revenue mix · Filed 29/07/2026
For the years ended December 31, 2025, 2024, and 2023, our annualized net new bookings of subscription-based services on all contracts were approximately $308 million, $250 million, and $286 million, respectively.
Operating metrics: annualized net new subscription bookings for 2023–2025 · Filed 26/02/2026
