CoStar sees net income jump 32% in year marked by acquisitions

Real estate data giant, which generated $1.4B revenue, credited strong performance to

CEO Andrew Florance (Credit: CoStar via YouTube)
CoStar Group CEO Andrew Florance (Credit: CoStar via YouTube)

CoStar Group reported $315 million in net income in 2019, following a year of acquisitions and the conclusion of a protracted legal fight.

The real estate data firm said Tuesday that it generated $1.4 billion revenue in 2019, up from $1.2 billion in 2018. Its income was up 32 percent from the previous year, while its cash and cash equivalents dipped slightly from $1.1 billion to $1.07 billion. CoStar’s revenue for the fourth quarter was $375 million, up 19 percent year over year. Net income for the quarter saw a 5 percent bump year over year, to $88 million.

CoStar’s share price dropped about 4 percent Wednesday, from $708 on Tuesday, before rebounding slightly to $682 a share when the markets closed.

CEO Andrew Florance said the rising financial metrics were in part thanks to the strong performance of its apartments listing businesses, including

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“Our efforts to build online marketplaces and commercial real-estate are certainly paying off with almost 62 percent of our sales in 2019 coming from, LoopNet and our other market places, a trend we can expect to continue into 2020,” he said during Tuesday’s earnings call.

He also said CoStar was doubling down on its marketing expenditure for to $250 million a year. Actor Jeff Goldblum is the face of the campaign.

To build on that, Florance also said the company had last month rolled out a series of online renter tools to improve customer and landlord experience. About 17,000 customers have used the new tools, he said.

The results follow a year of acquisitions, including the buy of hotel data provider STR for $450 million in November. This month, it bought apartment listing firm RentPath out of Chapter 11 bankruptcy for $588 million.

In 2019, it also ended its legal battle with now-defunct competitor Xceligent, which it had sued for copyright infringement in 2017. CoStar was awarded a $500 million proposed judgment from the court-appointed trustee overseeing Xceligent’s bankruptcy, according to court filings. Ultimately, the company recouped $10.75 million from Xceligent’s insurers, an agreement approved by Delaware Bankruptcy Court.