CoStar stock gaps down despite upwardly revised guidance, Q3 earnings beat

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CoStar Group (CSGP [https://seekingalpha.com/symbol/CSGP]) shares tumbled 12% in Wednesday midafternoon trading, even after the real estate services firm raised its full-year guidance and delivered better-than-expected third-quarter earnings.

It now expects 2025 revenue [https://seekingalpha.com/pr/20283130-costar-group-q3-revenue-increases-20-percent-year-over-year-net-new-bookings-up-92-percent] of $3.23B-$3.24B (midpoint $3.235B), compared with the $3.24B consensus and the prior target of $3.134B-$3.16B (midpoint $3.15B). Adjusted EBITDA for the year is expected to be $415M-$425M (midpoint $420M), vs. $370M-$390M (midpoint $380M) in the earlier guide. And adjusted EPS is anticipated to be $0.82-$0.84 (midpoint $0.83), vs. $0.84 consensus and $0.76-$0.80 (midpoint $0.78) previously.

For Q4, it sees revenue of $885M-$895M (midpoint $890M), vs. $892.2M expected; adjusted EBITDA of $150M-$160M (midpoint $150M); and adjusted EPS of $0.26-$0.28 (midpoint $0.27), vs. $0.27 consensus.

The upwardly revised targets come after "we had an outstanding Q3 2025 as we delivered our 58th consecutive quarter of double-digit revenue growth with a 20% year-over-year increase in revenue,” said Founder and CEO Andy Florance.

Q3 adjusted EPS of $0.23, topping the $0.27 average analyst estimate, rose from $0.17 in the prior quarter and ticked up from $0.22 in Q3 2024.

Q3 revenue of $834M, also beating [https://seekingalpha.com/news/4509700-costar-group-non-gaap-eps-of-0_23-beats-by-0_04-revenue-of-834m-beats-by-8_8m] the consensus, advanced from $781M in Q2 and $693M a year earlier.

Adjusted EBITDA was $115M, up from $85M in Q2 and $76M in last year's Q3.

“We achieved net new bookings in the third quarter of $84 million, up 92% year-over-year," Florance noted. "The dedicated Homes.com sales team achieved its best net new bookings quarter. We continued our strong momentum in adding Homes Members in Q3 and today have over 26,000 Members, up nearly 150% since the end of Q3 2024. We added 7,000 Members in Q3," he added.

MORE ON COSTAR GROUP

* CoStar Group, Inc. (CSGP) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4834382-costar-group-inc-csgp-q3-2025-earnings-call-transcript]
* CoStar Group, Inc. 2025 Q3 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4834335-costar-group-inc-2025-q3-results-earnings-call-presentation]
* CoStar Group's Expansion Into Australia [https://seekingalpha.com/article/4819435-costar-groups-expansion-into-australia]
* CoStar Group Non-GAAP EPS of $0.23 beats by $0.04, revenue of $834M beats by $8.8M [https://seekingalpha.com/news/4509700-costar-group-non-gaap-eps-of-0_23-beats-by-0_04-revenue-of-834m-beats-by-8_8m]
* CoStar Group Q3 2025 Earnings Preview [https://seekingalpha.com/news/4508767-costar-group-q3-2025-earnings-preview]