5 Insightful Analyst Questions From CoStar's Q1 Earnings Call
Is now the time to buy CSGP? Find out in our full research report (it's free).
Revenue: $732.2 million vs analyst estimates of $730 million (11.5% year-on-year growth, in line)
Adjusted EPS: $0.19 vs analyst estimates of $0.11 (81.7% beat)
Adjusted EBITDA: $65.6 million vs analyst estimates of $30.51 million (9% margin, significant beat)
Revenue Guidance for the full year is $3.14 billion at the midpoint, roughly in line with what analysts were expecting
EBITDA guidance for the full year is $370 million at the midpoint, below analyst estimates of $389.9 million
Operating Margin: -5.8%, in line with the same quarter last year
Market Capitalization: $34.17 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Alexei Gogolev (JPMorgan) asked about the industry's response to Zillow's delayed market listing policy. CEO Andy Florance reported 'overwhelmingly negative' feedback from agents and positioned this as a competitive opportunity for Homes.com.
Peter Christiansen (Citi) inquired about Matterport's integration timeline and monetization. Florance highlighted plans for deep product embedding and R&D expansion, while CFO Christian Lown emphasized expected reductions in customer cancellations as usage increases.
George Tong (Goldman Sachs) questioned investment levels for Homes.com and the impact of the Board's capital allocation committee. Lown confirmed investment plans remain unchanged, with cost savings being reallocated to sales force growth.
Ryan Tomasello (KBW) asked about the deceleration in multifamily growth and the outlook for Apartments.com. Lown explained that seasonal dynamics and new sales hires will drive acceleration in the second half, and the addition of experienced sales staff is expected to improve results.
Stephen Sheldon (William Blair) queried the potential for more aggressive pricing in the CoStar Suite. Florance suggested that as market conditions improve, the company may pursue higher annual price increases, but will remain cautious if headwinds persist.
Over the next few quarters, the StockStory team will focus on (1) the pace of Homes.com sales force expansion and its impact on net new bookings, (2) the effectiveness of Matterport's integration in driving higher engagement and retention across the product suite, and (3) signs of improvement in commercial real estate transaction volumes and office vacancy rates. Execution on cost control and the ability to successfully monetize new product offerings will also be key indicators of progress.
CoStar currently trades at $81, down from $82.61 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free).
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Newsweek
a day ago
- Newsweek
Legal Storm Hits America's Most Popular Real Estate Website
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. America's most popular real estate website, Zillow, has been hit by a new lawsuit this week as rival platform CoStar Group claims it has illegally used tens of thousands of its watermarked images. It is the second legal battle facing Zillow this summer, after New York-headquartered real estate brokerage Compass filed an antitrust lawsuit against it in late June alleging that Zillow's new listing policy restricts competition and harms consumers. While the two cases are very different, Ladah Law Firm's trial attorney Ramzy Ladah told Newsweek that the two lawsuits converge on the same question: "How much power a dominant digital portal may wield over the lifeblood of residential real estate, which is timely, accurate listing data, and the media that sells it?" One lawsuit essentially asks whether a platform can police distribution rules in a way that disadvantages rivals; the other asks whether that same platform can lawfully display content it did not license. "Together, they test the outer limits of platform control in housing," Ladah said. Newsweek contacted Zillow for comment by email on Wednesday but did not receive a response. What Are the Lawsuits About? CoStar Group, which owns the website LoopNet, and filed its lawsuit against Zillow on Wednesday, accusing the company of posting 46,979 of their copyrighted real estate listing photos without their permission. According to the lawsuit, filed in a federal court in Manhattan, Zillow's use of CoStar Group's images undermined its ability to stand out against competitors, particularly for rental units. "Zillow's theft of tens of thousands of CoStar Group's copyrighted photographs is nothing short of outrageous," Andy Florance, CoStar Group's founder and CEO, said in a press release on Wednesday. "Zillow is profiting from decades of CoStar Group work and the billions of dollars we have invested. Even worse, Zillow is magnifying its infringement on Redfin and he added. "If these other sites do not immediately remove our images, we will have no choice but to sue them as well. We are committed to stopping this systematic infringement and holding the wrongdoers to account." Compass filed its antitrust lawsuit in June after months of back-and-forth between the two companies over Zillow's policy to ban private home listings. Essentially, the policy means that if a home seller or their agent markets a property off Zillow for more than one day, then that home cannot be listed on its platforms. The lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that "Zillow has sought to rely on anticompetitive tactics to protect its monopoly and revenues in violation of the antitrust laws." Zillow has denied having engaged in anticompetitive tactics, saying that the company has always stood for "transparency and equal access to information" while "Compass has been waging a campaign against market transparency to the detriment of consumers and agents." The practice of taking a home off Zillow and test prices elsewhere, Zillow said, makes the housing market less transparent. "Zillow's 'Zillow Ban' policy can force agents to play by their rules if they want visibility. This puts pressure on independent firms that use private listings or want to test pricing before going public," Keely Smith, the lead interior designer at JD Elite Interiors, told Newsweek. "It might seem like an agent problem, but when listings get funneled through a single pipeline, it narrows options for everyone. I've seen sellers struggle with fewer marketing avenues and buyers miss out on homes that don't show up on the first few pages of a Zillow search," she added. "It chips away at the flexibility and local knowledge that smaller brokerages bring to the table." While CoStar is asking for a permanent injunctive relief and "a substantial award of damages" that could reach up to $1 billion, Compass is asking for an injunction that would prohibit Zillow from implementing and enforcing its ban or similar policies. "The antitrust case asks whether platform rules have crossed the line from hard bargaining into unlawful maintenance of dominance," Ladah told Newsweek. "The copyright case asks whether the race to comprehensive inventory has led to sloppy or overbroad content ingestion." Legal Storm Hits America's Most Popular Real Estate Website Legal Storm Hits America's Most Popular Real Estate Website Newsweek Illustration/Canva/Getty What Does This Mean for the US Real Estate Market? If Compass prevails in its case, Zillow and other similar portals "may need to relax rules that penalize off-platform or delayed marketing," Ladah said. That, in turn, could increase the diversity of channels through which consumers find homes and reduce the gravitational pull of any single portal—chipping away at the power that Zillow has gained in the past couple of decades. A Compass' victory might also "erode the incentive for aggregators to invest in data quality and consumer tools if they cannot require prompt, comprehensive inclusion," Ladah added. "Courts often weigh those tradeoffs under the rule of reason, and remedies can be tailored, so a likely outcome is not a free-for-all but a narrowing of permanent exclusion coupled with clearer, less punitive compliance paths." If CoStar wins its case and establishes widespread, unlicensed use of its material by Zillow, "the result will be tighter provenance controls, more robust license audits, and possibly a re-pricing of photo rights across the ecosystem," Ladah said. "That would push portals and MLSs to adopt stronger hash-matching, metadata preservation, and takedown workflows, and it would push brokerages to obtain clean, written licenses from photographers that explicitly cover syndication to every endpoint where a listing may appear." While this is all very technical, these lawsuits could have a direct impact on homebuyers as well. A check on Zillow's dominance on the real estate market, Ladah said, "could surface more listings across a wider set of sites, which feels pro-consumer at first glance," but "the countervailing risk is fragmentation." "If agents feel freer to run staggered or private campaigns, or if portals reduce cross-syndication to mitigate copyright exposure, some homes may be harder to discover in one place," Ladah said. "The net outcome will depend on whether courts and the industry can maintain broad, near-real-time sharing while curbing exclusionary rules and tightening IP compliance." Home sellers, on the other hand, are currently often limited by policies that force immediate publication to a single platform. "If those policies soften, sellers and listing agents may regain leverage to calibrate visibility without risking permanent banishment from high-traffic sites," Ladah said. The outcomes of these two legal battles, Ladah explained, are likely to influence not only how Zillow operates, but also how the entire digital architecture of U.S. homebuying and renting is organized. "A win for Compass or CoStar would likely democratize access and strengthen IP compliance, with some risk of short-term fragmentation," he said. "A clean sweep for Zillow would entrench the current gatekeeper model and reward strict distribution discipline, which could preserve consistency and consumer familiarity at the possible expense of competition at the margins." Either way, Ladah said, the message for the market is the same. "Treat access rules and content rights as core legal infrastructure, not housekeeping. The next phase of real estate's digital era will be built on whichever of those two pillars the courts reinforce," he said.
New York Post
2 days ago
- New York Post
Zillow hit with federal copyright lawsuit over 47K allegedly stolen property photos
Real estate player CoStar, parent of and is suing Zillow, claiming the online real estate marketplace is using tens of thousands of its copyrighted photographs to prop up its business. In court documents filed with the Southern District of New York this week, CoStar said it is trying to 'redress Zillow's widespread and systematic infringement of CoStar's copyrighted photographs, which Zillow has unlawfully exploited to bolster its online rental listings business.' CoStar claimed in the June 30 filing that Zillow had displayed and profited off of nearly 47,000 CoStar-copyrighted images on and other Zillow sites, with many of the images even including the CoStar watermark. In many cases, an image will appear on multiple different Zillow pages and different versions of listings, displaying over 250,000 times, according to the suit. 'Zillow's misconduct is not limited to the Zillow family of websites. Through lucrative syndication agreements, Zillow is also distributing CoStar's images to its partnership network of listing websites, hosted by Zillow's supposed competitors, and Redfin,' CoStar stated in the suit. CoStar said in a release that it invested billions of dollars to create 'the most comprehensive database of real estate information' including building what it describes as the 'world's largest library of real estate photographs.' The company said it has employed and hired thousands of professional photographers who have created millions of real estate images, which are owned and copyrighted by CoStar Group. CoStar Group is suing Zillow, as the real estate giant claims they are using its copyrighted photographs to prop up their business. Rafael Henrique – FOX Business reached out to Zillow for comment. This adds to the mounting legal challenges that Zillow is facing. This marks the second time within five weeks that Zillow has been hit with a lawsuit. The first came from real estate brokerage Compass, which filed a 60-page complaint in Manhattan federal court, claiming that Zillow is improperly refusing to list homes on its site that were first listed elsewhere. Court documents sent to the Southern District of New York acknowledge that Zillow is using copyrighted photos from CoStar to 'bolster its online rental listings business.' Koshiro K – Compass, based in Manhattan, is seeking an injunction against Zillow to force them to change their practices, as well as monetary damages. Seattle-based Zillow has about 160 million homes in its database, receives 227 million unique visitors a month and received 2.4 billion visits between January and March, according to Reuters. They called Compass' claims 'unfounded' and told FOX Business that it 'will vigorously defend against them.'
Geek Wire
4 days ago
- Geek Wire
CoStar sues Zillow over photos, claims ‘systematic infringement'
(Zillow Image) This story originally appeared on Real Estate News. CoStar has filed suit against Zillow, accusing the nation's leading home search site of 'outrageous' copyright infringement through its use of more than 46,000 CoStar-owned photos. The case, filed in a New York federal court on July 30, includes claims Zillow is using watermarked images owned by CoStar Group — parent company of competing home search site — on its sites and on Redfin and through its rental listings syndication deals. A press release from CoStar calls this 'one of the largest, if not the largest, image infringement cases in history' with potential for $1 billion in damages. What CoStar had to say: 'Zillow is profiting from decades of CoStar Group work and the billions of dollars we have invested,' CoStar CEO Andy Florance said via press release. 'We are committed to stopping this systematic infringement and holding the wrongdoers to account.' Florance also threatened to sue Redfin and if they 'do not immediately remove our images.' Florance and had previously been engaged in legal action with and parent company Move, Inc. over alleged trade secrets theft, which both parties agreed to dismiss in April. Real Estate News has reached out to Zillow, Redfin and for comment. A closer look at the claims: CoStar says Zillow Group has been willfully using its images, primarily from on multifamily rental listings displayed on as well as Trulia and HotPads, which are owned by Zillow Group, and Redfin and through syndication deals. The suit includes examples of images with the CoStar logo obscured or cropped out when displayed on the Zillow site. CoStar filed a similar lawsuit against Xceligent Inc., a now-bankrupt real estate data company, and won a $500,000 judgement. In 2022, Zillow was ordered to pay $1.9 million to photography company VHT over its use of copyrighted images in a non-listings section of Zillow's other court battle: Zillow is also facing a lawsuit from another industry titan: Compass. The nation's largest brokerage — a leading advocate for private listings — filed suit against Zillow on June 23 in response to Zillow's policy barring listings that are publicly marketed but not widely available via the MLS. The move from CoStar comes just weeks after Florance made public remarks about Zillow's Listing Access Standards, which Florance described as 'outrageous bullying and intimidation.' Florance had also taken aim at Zillow partners Redfin and referring to the group of companies as an 'anticompetitive cartel.'
