The company grossed $ 458 million in the first quarter of the year. It is also said that Homesnap, which it bought in 2020, performed well.
Real estate data analytics and marketplace provider CoStar announced on Tuesday that its sales rose 17 percent in the first three months of 2021. CEO Andrew Florance said the effects of the pandemic also seem to be passing.
The company’s latest earnings report, which it released Tuesday afternoon, specifically showed that CoStar grossed $ 458 million in the first quarter of the year. This represents an increase of $ 392 million over the same period in 2020 and exceeds analysts’ expectations that revenue will be $ 453.93 million between January and March.
Net income for the quarter was $ 74 million, up nearly 2 percent from $ 72.8 million a year ago. EBITDA rose 35 percent year over year to $ 136 million. (EBITDA stands for earnings before interest, taxes, depreciation and amortization. It is a useful abbreviation for measuring a company’s profitability.)
In the report, Florance – who is also the company’s founder – said: “Our business has got off to a good start into 2021. Sales and profits were above forecast and the record number of visitors to our platforms in the first quarter of the year. ”He also highlighted Homesnap, which CoStar bought in late 2020.
“Business did well in the first quarter of 2021,” Florence said of Homesnap. “Pro forma revenue increased over 40 percent year over year as the number of paid subscribers more than doubled and subscription revenue increased 68 percent.”
CoStar also revealed in Tuesday’s earnings report that traffic on its various websites increased 47 percent year over year in the first three months of 2021.
While speaking with investors to discuss earnings, Florance said the beginning of this year was the company’s best sales quarter since 2019, and earnings were “above forecast”. He was also optimistic about the impact of the coronavirus.
“We seem to be getting past the pandemic disorder,” said Florance during the call.
The CoStar share fell slightly after the close of trading immediately after the report was published.
In general, though, the stock has played a role in the past few days. For most of the day that led to the earnings report, stocks traded around $ 937, up several dollars from its closing price on Thursday and more than $ 20 from a week ago. In fact, CoStar stock has seen a strong uptrend since early March when the stock hit its low at just under $ 760.
Tuesday’s earnings report comes two months after the company announced that earnings rose in 2020. CoStar posted $ 1.66 billion in revenue last year, up 18.5 percent from 2019 as interest in real estate skyrocketed in the final months of the coronavirus pandemic.
Despite positive revenue growth, CoStar’s profits fell 27.9 percent in 2020 thanks to a one-time payment related to the company’s failed attempt to buy rival RentPath.
The latest results are also coming during a particularly active period for CoStar, where the company has been working to aggressively expand its reach. In 2020, for example, Ten-X, Emporis and Homesnap were acquired while raising debt and equity of $ 2.7 billion.
CoStar further strengthened its customer contact business in December when it bought the URL hotels.com in December. Houses.com joins commercial websites Loopnet.com, Cityfeet.com and Showcase.com. rental-oriented websites Apartments.com, ForRent.com, ApartmentFinder.com, ApartmentHomeLiving.com, and Apartamentos.com; and land sales sites Land.com, LandsofAmerica.com, LandWatch.com, and LandandFarm.com.
Florance singled out several of these properties in Tuesday’s report, stating that Apartments.com saw sales jump 21 percent in the first quarter of the year, while visitor numbers rose 35 percent.
The number of visitors to LoopNet rose by 34 percent, that of Ten-X by 45 percent.
This year, CoStar also released news for its efforts to acquire data and analytics company CoreLogic. However, that deal ultimately failed in early March when the Board of Directors was pushed back by CoreLogic.
While talking to investors, Florance also discussed CoStar’s expansion plans. While he has not identified any specific acquisition targets, he said that expansion opportunities will likely “be additive to a broader topic that we want to pursue.” He added that he receives several messages daily about potential expansion opportunities in the residential real estate sector and that the company is looking to “build a fairly robust pan-European product” going forward.
Florance also said the pandemic had been challenging for the company, particularly in terms of hiring and training sales teams. The pandemic is also affecting interest in office space.
However, Florance praised the COVID-19 vaccines that are now being rolled out around the world, and said he believes personal work will ultimately prevail.
“Face to face,” he said, “will always prevail against distant, dispersed teams.”
Update: This post was updated after publication with additional information from the CoStar profit report and a call was made to investors.
Email Jim Dalrymple II