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CoStar Group Third Quarter 2019 Revenue Grows 15% and Net Income Increases 34% Year-over-Year; Company Closes STR Acquisition

WASHINGTON–(BUSINESS WIRE)–CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, announced today that revenue for the quarter ended September 30, 2019, was $353 million, an increase of 15% over revenue of $306 million for the third quarter of 2018. Net income for the third quarter of 2019 was $79 million, an increase of 34% over net income of $59 million for the third quarter of 2018.

EBITDA for the third quarter of 2019 was $113 million, an increase of 24% versus EBITDA of $91 million for the third quarter of 2018. Adjusted EBITDA (which excludes stock-based compensation, acquisition and integration related costs and other items as described below) for the third quarter of 2019 was $129 million, an increase of 18% compared to adjusted EBITDA of $110 million for the third quarter of 2018.

Earlier today, CoStar completed the previously announced acquisition of STR, Inc. and STR Global, Ltd. for an aggregate consideration of approximately $450 million in cash, subject to certain adjustments per the definitive agreements.

“We achieved very strong third quarter 2019 financial results,” said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “We continue to deliver excellent results as we generated Company-wide net new bookings of $50 million in the third quarter, an increase of 27% year-over-year. Through the first three quarters of this year, our quarterly net new bookings average was $52 million, a 32% increase over the average quarterly bookings for the comparable period in 2018. We are also very pleased with the continued growth of Apartments.com, which generated 20% year-over year revenue growth in the third quarter of 2019 and is now at an annual revenue run rate of over $500 million.”

Florance continued, “We are very excited about closing our acquisition of STR so quickly. We believe that combining STR’s superior hospitality service offerings with CoStar will benefit all industry participants as we work together to create valuable new and improved tools.”

Year 2018-2019 Quarterly Results – Unaudited

(in millions, except per share data)

 

 

2018

 

2019

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

274

 

 

$

297

 

 

$

306

 

 

$

316

 

 

$

328

 

 

$

344

 

 

$

353

 

Net income

 

52

 

 

44

 

 

59

 

 

84

 

 

85

 

 

63

 

 

79

 

Net income per share – diluted

 

1.44

 

 

1.20

 

 

1.61

 

 

2.29

 

 

2.33

 

 

1.73

 

 

2.15

 

Weighted average outstanding shares – diluted

 

36.4

 

 

36.5

 

 

36.5

 

 

36.5

 

 

36.6

 

 

36.6

 

 

36.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

70

 

 

64

 

 

91

 

 

125

 

 

113

 

 

94

 

 

113

 

Adjusted EBITDA

 

84

 

 

85

 

 

110

 

 

139

 

 

125

 

 

110

 

 

129

 

Non-GAAP net income

 

60

 

 

60

 

 

79

 

 

102

 

 

92

 

 

82

 

 

96

 

Non-GAAP net income per share – diluted

 

1.65

 

 

1.66

 

 

2.16

 

 

2.81

 

 

2.53

 

 

2.23

 

 

2.61

 

“CoStar Group profitability continues to be exceptional with year-over-year growth in net income of 34% in the third quarter of 2019,” said Florance. “I am very pleased that we have grown net income while investing for the future growth of the business.”

Non-GAAP net income for the third quarter of 2019 (which excludes amortization of acquired intangible assets, stock-based compensation and other items as described below) was $96 million or $2.61 per diluted share, an increase of $17 million or 22% versus the third quarter of 2018.

2019 Outlook

The Company expects that STR will contribute between $3 million to $4 million in revenue in the fourth quarter of 2019. Due to the impact of integration costs and purchase accounting adjustments for deferred revenue, we expect STR adjusted EBITDA of negative $5 million to $6 million in the fourth quarter of 2019. These estimated results for STR are included in our revised outlook.

The Company is increasing revenue guidance to a range of $1.385 billion to $1.391 billion for the full year of 2019, an increase of $2 million at the midpoint of the range compared to the prior outlook. We expect revenue for the fourth quarter of 2019 in the range of $360 million to $366 million, representing revenue growth of 15% over the fourth quarter of 2018 at the midpoint of the range.

The Company expects adjusted EBITDA in a range of $494 million to $500 million for the full year of 2019, a decrease of $5 million at the midpoint of the range. For the fourth quarter of 2019, the Company expects adjusted EBITDA in a range of $129 million to $135 million.

We expect full-year 2019 non-GAAP net income per diluted share in a range of $9.90 to $10.02 based on 36.6 million shares, a decrease of $0.11 at the midpoint versus the previously provided outlook. For the fourth quarter of 2019, we expect non-GAAP net income per diluted share in a range of $2.52 to $2.64 based on 36.7 million shares. These ranges include a non-GAAP tax rate of 25%.

The preceding forward-looking statements reflect CoStar Group’s expectations as of October 22, 2019, including forward-looking non-GAAP financial measures on a consolidated basis. Given the risk factors, uncertainties and assumptions discussed above, actual results may differ materially. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.

Reconciliation of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share and other disclosed non-GAAP financial measures to their GAAP basis results are shown in detail below, along with definitions for those terms. A reconciliation of forward-looking non-GAAP guidance to the most directly comparable GAAP measure, net income, can be found within the tables included in this release.

Non-GAAP Financial Measures

For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Company’s financial condition and results of operations, please refer to the Company’s latest periodic report.

EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before interest and other income (expense), loss on debt extinguishment, income taxes, depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before stock-based compensation expense, acquisition- and integration-related costs, restructuring costs and settlements and impairments incurred outside the Company’s normal course of business.

Non-GAAP net income is a non-GAAP financial measure determined by adjusting GAAP net income attributable to CoStar Group for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside the Company’s normal course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes. In 2019, the Company is assuming a 25% tax rate in order to approximate our statutory corporate tax rate excluding the impact of discrete items.

Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share. For periods with GAAP net losses and non-GAAP net income, the weighted average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.

Earnings Conference Call

Management will conduct a conference call at 5:00 PM EDT on Tuesday, October 22, 2019 to discuss earnings results for the third quarter and the Company’s outlook. The audio portion of the conference call will be broadcast live over the Internet at investors.costargroup.com. To join the conference call by telephone, please dial (800) 230-1059 (from the United States and Canada) or (612) 234-9959 (from all other countries) and refer to conference code 472986. An audio recording of the conference call will be available for replay approximately one hour after the call’s completion and will remain available for a period of time following the call. To access the recorded conference call, please dial (800) 475-6701 (from the U.S. and Canada) or (320) 365-3844 (from all other countries) using access code 472986. The webcast replay will also be available in the Investors section of CoStar Group’s website for a period of time following the call.

CoStar Group, Inc.

Condensed Consolidated Statements of Operations – Unaudited

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

Revenues

 

$

352,808

 

 

$

305,525

 

 

$

1,024,993

 

 

$

876,261

 

Cost of revenues

 

71,172

 

 

72,072

 

 

214,243

 

 

201,685

 

Gross profit

 

281,636

 

 

233,453

 

 

810,750

 

 

674,576

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing (excluding customer base amortization)

 

101,582

 

 

89,251

 

 

308,751

 

 

290,706

 

Software development

 

32,639

 

 

26,173

 

 

89,022

 

 

75,357

 

General and administrative

 

45,530

 

 

39,012

 

 

127,943

 

 

117,658

 

Customer base amortization

 

7,616

 

 

8,329

 

 

22,473

 

 

22,948

 

 

 

187,367

 

 

162,765

 

 

548,189

 

 

506,669

 

 

 

 

 

 

 

 

 

 

Income from operations

 

94,269

 

 

70,688

 

 

262,561

 

 

167,907

 

Interest and other income

 

5,358

 

 

3,035

 

 

16,216

 

 

8,674

 

Interest and other expense

 

(704

)

 

(717

)

 

(2,133

)

 

(2,135

)

Income before income taxes

 

98,923

 

 

73,006

 

 

276,644

 

 

174,446

 

Income tax expense

 

20,304

 

 

14,247

 

 

49,608

 

 

19,621

 

Net income

 

$

78,619

 

 

$

58,759

 

 

$

227,036

 

 

$

154,825

 

 

 

 

 

 

 

 

 

 

Net income per share – basic

 

$

2.16

 

 

$

1.63

 

 

$

6.26

 

 

$

4.30

 

Net income per share – diluted

 

$

2.15

 

 

$

1.61

 

 

$

6.20

 

 

$

4.25

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares – basic

 

36,333

 

 

36,129

 

 

36,293

 

 

36,032

 

Weighted average outstanding shares – diluted

 

36,652

 

 

36,518

 

 

36,615

 

 

36,439

 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures – Unaudited

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

78,619

 

 

$

58,759

 

 

$

227,036

 

 

$

154,825

 

Income tax expense

 

20,304

 

 

14,247

 

 

49,608

 

 

19,621

 

Income before income taxes

 

98,923

 

 

73,006

 

 

276,644

 

 

174,446

 

Amortization of acquired intangible assets

 

12,543

 

 

13,639

 

 

37,946

 

 

38,190

 

Stock-based compensation expense

 

13,139

 

 

8,953

 

 

38,984

 

 

30,593

 

Acquisition and integration related costs

 

2,287

 

 

7,171

 

 

3,028

 

 

20,199

 

Restructuring and related costs

 

806

 

 

2,314

 

 

3,054

 

 

2,314

 

Non-GAAP income before income taxes

 

127,698

 

 

105,083

 

 

359,656

 

 

265,742

 

Assumed rate for income tax expense *

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(31,925

)

 

(26,271

)

 

(89,914

)

 

(66,436

)

Non-GAAP net income

 

$

95,773

 

 

$

78,812

 

 

$

269,742

 

 

$

199,306

 

 

 

 

 

 

 

 

 

 

Net income per share – diluted

 

$

2.15

 

 

$

1.61

 

 

$

6.20

 

 

$

4.25

 

Non-GAAP net income per share – diluted

 

$

2.61

 

 

$

2.16

 

 

$

7.37

 

 

$

5.47

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares – basic

 

36,333

 

 

36,129

 

 

36,293

 

 

36,032

 

Weighted average outstanding shares – diluted

 

36,652

 

 

36,518

 

 

36,615

 

 

36,439

 

 

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed for 2019 and 2018, which approximates our statutory corporate tax rate.

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

78,619

 

 

$

58,759

 

 

$

227,036

 

 

$

154,825

 

Amortization of acquired intangible assets in cost of revenues

 

4,957

 

 

5,310

 

 

15,503

 

 

15,242

 

Amortization of acquired intangible assets in operating expenses

 

7,586

 

 

8,329

 

 

22,443

 

 

22,948

 

Depreciation and other amortization

 

6,279

 

 

6,794

 

 

19,289

 

 

19,810

 

Interest and other income

 

(5,358

)

 

(3,035

)

 

(16,216

)

 

(8,674

)

Interest and other expense

 

704

 

 

717

 

 

2,133

 

 

2,135

 

Income tax expense

 

20,304

 

 

14,247

 

 

49,608

 

 

19,621

 

EBITDA

 

$

113,091

 

 

$

91,121

 

 

$

319,796

 

 

$

225,907

 

Stock-based compensation expense

 

13,139

 

 

8,953

 

 

38,984

 

 

30,593

 

Acquisition and integration related costs

 

2,287

 

 

7,171

 

 

3,028

 

 

20,199

 

Restructuring and related costs

 

806

 

 

2,314

 

 

3,054

 

 

2,314

 

Adjusted EBITDA

 

$

129,323

 

 

$

109,559

 

 

$

364,862

 

 

$

279,013

 

CoStar Group, Inc.

Condensed Consolidated Balance Sheets – Unaudited

(in thousands)

 

 

 

 

 

 

 

September 30,

2019

 

December 31,

2018

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,389,619

 

 

$

1,100,416

 

Accounts receivable, less allowance of $4,858 and $5,709 as of September 30, 2019 and December 31, 2018, respectively

 

91,325

 

 

89,192

 

Prepaid expenses and other current assets

 

23,778

 

 

23,690

 

Total current assets

 

1,504,722

 

 

1,213,298

 

 

 

 

 

 

Long-term investments

 

10,070

 

 

10,070

 

Deferred income taxes, net

 

4,426

 

 

7,469

 

Property and equipment, net

 

107,989

 

 

83,303

 

Lease right-of-use assets

 

105,516

 

 

 

Goodwill

 

1,616,538

 

 

1,611,535

 

Intangible assets, net

 

259,444

 

 

288,911

 

Deferred commission costs, net

 

85,623

 

 

76,031

 

Deposits and other assets

 

6,155

 

 

7,432

 

Income tax receivable

 

14,908

 

 

14,908

 

Total assets

 

$

3,715,391

 

 

$

3,312,957

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

8,082

 

 

$

6,327

 

Accrued wages and commissions

 

51,557

 

 

45,588

 

Accrued expenses

 

41,816

 

 

29,821

 

Deferred gain on the sale of building

 

 

 

2,523

 

Income taxes payable

 

9,116

 

 

14,288

 

Deferred rent

 

 

 

4,153

 

Lease liabilities

 

27,137

 

 

 

Deferred revenue

 

60,328

 

 

51,459

 

Total current liabilities

 

198,036

 

 

154,159

 

 

 

 

 

 

Deferred gain on the sale of building

 

 

 

13,669

 

Deferred rent

 

 

 

31,944

 

Deferred income taxes, net

 

83,120

 

 

69,857

 

Income taxes payable

 

17,172

 

 

17,386

 

Lease and other long-term liabilities

 

117,897

 

 

4,000

 

Total liabilities

 

$

416,225

 

 

$

291,015

 

 

 

 

 

 

Total stockholders’ equity

 

3,299,166

 

 

3,021,942

 

Total liabilities and stockholders’ equity

 

$

3,715,391

 

 

$

3,312,957

 

CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows – Unaudited

(in thousands)

 

 

 

 

 

Nine Months Ended

September 30,

 

 

2019

 

2018

Operating activities:

 

 

 

 

Net income

 

$

227,036

 

 

$

154,825

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

57,235

 

 

58,000

 

Amortization of deferred commissions costs

 

39,189

 

 

36,242

 

Amortization of debt issuance costs

 

657

 

 

657

 

Stock-based compensation expense

 

38,984

 

 

30,593

 

Deferred income taxes, net

 

13,288

 

 

7,644

 

Bad debt expense

 

7,458

 

 

4,519

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

Accounts receivable

 

(8,797

)

 

(19,038

)

Prepaid expenses and other current assets

 

(754

)

 

(2,952

)

Deferred commissions

 

(48,791

)

 

(41,421

)

Lease right-of-use and other assets

 

16,326

 

 

(1,396

)

Accounts payable and other liabilities

 

(4,339

)

 

(13,443

)

Deferred revenue

 

12,525

 

 

6,454

 

Net cash provided by operating activities

 

350,017

 

 

220,684

 

 

 

 

 

 

Investing activities:

 

 

 

 

Purchases of property and equipment and other assets

 

(44,162

)

 

(21,801

)

Cash paid for acquisitions, net of cash acquired

 

(13,721

)

 

(340,074

)

Net cash used in investing activities

 

(57,883

)

 

(361,875

)

 

 

 

 

 

Financing activities:

 

 

 

 

Repurchase of restricted stock to satisfy tax withholding obligations

 

(25,040

)

 

(23,666

)

Proceeds from exercise of stock options and employee stock purchase plan

 

22,970

 

 

25,768

 

Other financing activities

 

(123

)

 

 

Net cash (used in) provided by financing activities

 

(2,193

)

 

2,102

 

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

(738

)

 

(588

)

Net increase (decrease) in cash and cash equivalents

 

289,203

 

 

(139,677

)

Cash and cash equivalents at the beginning of period

 

1,100,416

 

 

1,211,463

 

Cash and cash equivalents at the end of period

 

$

1,389,619

 

 

$

1,071,786

 

CoStar Group, Inc.

Disaggregated Revenues – Unaudited

(in thousands)

 

 

 

 

 

Three Months Ended September 30,

 

 

2019

 

2018

 

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

 

 

 

 

 

 

CoStar Suite

 

$

149,187

 

 

$

6,826

 

 

$

156,013

 

 

$

132,700

 

 

$

6,384

 

 

$

139,084

 

Information services

 

17,382

 

 

2,089

 

 

19,471

 

 

15,310

 

 

2,225

 

 

17,535

 

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

125,707

 

 

 

 

125,707

 

 

104,778

 

 

 

 

104,778

 

Commercial property and land

 

51,508

 

 

109

 

 

51,617

 

 

44,128

 

 

 

 

44,128

 

Total revenues

 

$

343,784

 

 

$

9,024

 

 

$

352,808

 

 

$

296,916

 

 

$

8,609

 

 

$

305,525

 

 

 

 

   

 

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

 

North America

 

International

 

Total

 

North America

 

International

 

Total

Information and analytics

 

 

 

 

 

 

 

 

 

 

 

 

CoStar Suite

 

$

436,070

 

 

$

20,469

 

 

$

456,539

 

 

$

383,876

 

 

$

19,381

 

 

$

403,257

 

Information services

 

52,632

 

 

6,466

 

 

59,098

 

 

41,544

 

 

6,881

 

 

48,425

 

Online marketplaces

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

360,463

 

 

 

 

360,463

 

 

297,254

 

 

 

 

297,254

 

Commercial property and land

 

148,418

 

 

475

 

 

148,893

 

 

127,325

 

 

 

 

127,325

 

Total revenues

 

$

997,583

 

 

$

27,410

 

 

$

1,024,993

 

 

$

849,999

 

 

$

26,262

 

 

$

876,261

 

CoStar Group, Inc.

Results of Segments – Unaudited

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2019

 

2018

 

2019

 

2018

EBITDA

 

 

 

 

 

 

 

 

North America

 

$

115,973

 

 

$

94,088

 

 

$

326,648

 

 

$

229,905

 

International

 

(2,882

)

 

(2,967

)

 

(6,852

)

 

(3,998

)

Total EBITDA

 

$

113,091

 

 

$

91,121

 

 

$

319,796

 

 

$

225,907

 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures with 2018-2019 Quarterly Results – Unaudited

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

2019

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$52.2

 

$43.8

 

$58.8

 

$83.5

 

$85.2

 

$63.2

 

$78.6

Income tax expense

 

3.5

 

1.9

 

14.2

 

26.1

 

12.5

 

16.8

 

20.3

Income before income taxes

 

55.7

 

45.7

 

73.0

 

109.6

 

97.7

 

80.0

 

98.9

Amortization of acquired intangible assets

 

10.4

 

14.1

 

13.6

 

13.3

 

13.2

 

12.2

 

12.5

Stock-based compensation expense

 

10.4

 

11.2

 

9.0

 

12.1

 

12.0

 

13.8

 

13.1

Acquisition and integration related costs

 

3.5

 

9.5

 

7.2

 

1.5

 

0.2

 

0.5

 

2.3

Restructuring and related costs

 

 

 

2.3

 

 

0.1

 

2.2

 

0.8

Non-GAAP income before income taxes

 

80.1

 

80.6

 

105.1

 

136.5

 

123.2

 

108.7

 

127.6

Assumed rate for income tax expense *

 

25%

 

25%

 

25%

 

25%

 

25%

 

25%

 

25%

Assumed provision for income tax expense

 

(20.0)

 

(20.1)

 

(26.3)

 

(34.1)

 

(30.8)

 

(27.2)

 

(31.9)

Non-GAAP net income

 

$60.1

 

$60.4

 

$78.8

 

$102.3

 

$92.4

 

$81.5

 

$95.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share – diluted

 

$1.65

 

$1.66

 

$2.16

 

$2.81

 

$2.53

 

$2.23

 

$2.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares – basic

 

35.9

 

36.1

 

36.1

 

36.1

 

36.2

 

36.3

 

36.3

Weighted average outstanding shares – diluted

 

36.4

 

36.5

 

36.5

 

36.5

 

36.6

 

36.6

 

36.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed for 2019 and 2018, which approximates our statutory corporate tax rate.

 

 

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

2019

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

52.2

 

 

$

43.8

 

 

$

58.8

 

 

$

83.5

 

 

$

85.2

 

 

$

63.2

 

 

$

78.6

 

Amortization of acquired intangible assets

 

10.4

 

 

14.1

 

 

13.6

 

 

13.3

 

 

13.2

 

 

12.2

 

 

12.5

 

Depreciation and other amortization

 

6.6

 

 

6.4

 

 

6.8

 

 

6.5

 

 

6.5

 

 

6.5

 

 

6.3

 

Interest and other income

 

(3.0

)

 

(2.6

)

 

(3.0

)

 

(4.6

)

 

(4.9

)

 

(5.9

)

 

(5.4

)

Interest and other expense

 

0.7

 

 

0.7

 

 

0.7

 

 

0.7

 

 

0.7

 

 

0.7

 

 

0.7

 

Income tax expense

 

3.5

 

 

1.9

 

 

14.2

 

 

26.1

 

 

12.5

 

 

16.8

 

 

20.3

 

EBITDA

 

$

70.4

 

 

$

64.3

 

 

$

91.1

 

 

$

125.5

 

 

$

113.2

 

 

$

93.5

 

 

$

113.0

 

Stock-based compensation expense

 

10.4

 

 

11.2

 

 

9.0

 

 

12.1

 

 

12.0

 

 

13.8

 

 

13.1

 

Acquisition and integration related costs

 

3.5

 

 

9.5

 

 

7.2

 

 

1.5

 

 

0.2

 

 

0.5

 

 

2.3

 

Restructuring and related costs

 

 

 

 

 

2.3

 

 

 

 

0.1

 

 

2.2

 

 

0.8

 

Adjusted EBITDA

 

$

84.4

 

 

$

85.1

 

 

$

109.6

 

 

$

139.0

 

 

$

125.5

 

 

$

110.0

 

 

$

129.2

 

CoStar Group, Inc.

Reconciliation of Forward-Looking Guidance – Unaudited

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income

 

 

Guidance Range

 

Guidance Range

 

 

For the Three Months

 

For the Twelve Months

 

 

Ended December 31, 2019

 

Ended December 31, 2019

 

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

Net income

 

$

65,000

 

 

$

71,000

 

 

$

292,000

 

 

$

298,000

 

Income tax expense

 

22,000

 

 

24,000

 

 

72,000

 

 

74,000

 

Income before income taxes

 

87,000

 

 

95,000

 

 

364,000

 

 

372,000

 

Amortization of acquired intangible assets

 

16,000

 

 

16,000

 

 

54,000

 

 

54,000

 

Stock-based compensation expense

 

15,000

 

 

14,000

 

 

54,000

 

 

53,000

 

Acquisition and integration related costs

 

5,000

 

 

4,000

 

 

8,000

 

 

7,000

 

Restructuring and related costs

 

 

 

 

 

3,000

 

 

3,000

 

Non-GAAP income before income taxes

 

123,000

 

 

129,000

 

 

483,000

 

 

489,000

 

Assumed rate for income tax expense *

 

25

%

 

25

%

 

25

%

 

25

%

Assumed provision for income tax expense

 

(30,600

)

 

(32,100

)

 

(120,800

)

 

(122,300

)

Non-GAAP net income

 

$

92,400

 

 

$

96,900

 

 

$

362,200

 

 

$

366,700

 

 

 

 

 

 

 

 

 

 

Net income per share – diluted

 

$

1.77

 

 

$

1.93

 

 

$

7.98

 

 

$

8.14

 

Non-GAAP net income per share – diluted

 

$

2.52

 

 

$

2.64

 

 

$

9.90

 

 

$

10.02

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding shares – diluted

 

36,700

 

 

36,700

 

 

36,600

 

 

36,600

 

 

 

 

 

 

 

 

 

 

* A 25% tax rate is assumed, which approximates our statutory corporate tax rate.

 

 

 

 

 

 

 

 

 

Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA

 

 

 

 

 

 

 

 

Guidance Range

 

Guidance Range

 

 

For the Three Months

 

For the Twelve Months

 

 

Ended December 31, 2019

 

Ended December 31, 2019

 

 

Low

 

High

 

Low

 

High

Net income

 

$

65,000

 

 

$

71,000

 

 

$

292,000

 

 

$

298,000

 

Amortization of acquired intangible assets

 

16,000

 

 

16,000

 

 

54,000

 

 

54,000

 

Depreciation and other amortization

 

8,000

 

 

8,000

 

 

27,000

 

 

27,000

 

Interest and other expense, net

 

(2,000

)

 

(2,000

)

 

(16,000

)

 

(16,000

)

Income tax expense

 

22,000

 

 

24,000

 

 

72,000

 

 

74,000

 

Stock-based compensation expense

 

15,000

 

 

14,000

 

 

54,000

 

 

53,000

 

Acquisition and integration related costs

 

5,000

 

 

4,000

 

 

8,000

 

 

7,000

 

Restructuring and related costs

 

 

 

 

 

3,000

 

 

3,000

 

Adjusted EBITDA

 

$

129,000

 

 

$

135,000

 

 

$

494,000

 

 

$

500,000

 

About CoStar Group, Inc.

CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. LoopNet is the most heavily trafficked commercial real estate marketplace online with over 6 million monthly unique visitors. Realla is the UK’s most comprehensive commercial property digital marketplace. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties.

Contacts

Scott Wheeler

Chief Financial Officer

(202) 336-6920

[email protected]

Richard Simonelli

Investor Relations

(202) 346-6394

[email protected]

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