CoStar CEO Andy Florance (Credit: CoStar via YouTube and Pixabay)
Real estate data giant CoStar Group exceeded $1 billion in revenue in 2018. And by the end of 2023, it hopes to roughly triple that figure to $3 billion.
Though tumult in the stock market contributed to a dip in CoStar’s market value, the company finished 2018 with a strong balance sheet, it disclosed in an earnings report on Tuesday. On the company’s subsequent earnings call, chief executive Andrew Florance said the firm posted $1.2 billion in revenue, a jump from $965 million for 2017. CoStar ended the year with $238 million in net income, up 94 percent over 2017’s $123 million. Its adjusted EBITDA checked in at $418 million, a 49 percent increase year-over-year.
“2018 was an outstanding year for CoStar with strong revenue growth and substantial margin expansion,” Florance said on the call, telling investors that the firm successfully integrated ForRent in the fourth quarter, which he called its strongest ever. He also said CoStar sees a “huge opportunity to further monetize LoopNet,” which, along with other commercial products, has the potential to “reach the size of Apartments.com.”
Florance briefly touched on two other 2018 acquisitions, noting that it picked up Cozy Services and Realla, the U.K.’s largest CRE marketplace, and signed client contracts with brokerages Marcus & Millichap and CBRE.
“We anticipate acquisitions will continue, but we anticipate most of our growth will be organic,” Florance said.
CoStar has long been the market leader for commercial real estate data, but is now facing a threat from Moody’s Analytics, which recently launched a new platform of real estate data services produced by firms including CompStak and Rockport VAL. Florance told Bisnow last week that while he welcomed the competition, Moody’s platform is “not exactly a big bang.”
CoStar’s share price has seen a spike since the beginning of 2019, jumping from $334 to $411 on Tuesday. Its market capitalization is currently at $14.8 billion. In 2019, CoStar is anticipating between $1.37 billion and $1.38 billion in revenue.