1) Strong Financial Performance
- Revenue for Q3 2026 reached $952 million, a 14% YoY increase, marking the 62nd consecutive quarter of double-digit growth.
- Adjusted EBITDA hit a record $229 million, doubling from the previous year and surpassing the prior record of $193 million from Q4 2021.
- Net income rose to $74 million, up $105 million YoY.
- Adjusted EBITDA margin improved to 24%, a significant increase from 14% in 2025.
- Full-year adjusted EBITDA guidance raised to $820 million to $840 million, reflecting strong cost control and operational efficiencies.

2) Segment Performance and Challenges
- Commercial Real Estate: Revenue of $492 million, up 7% YoY; adjusted EBITDA of $180 million, down 2% YoY due to investments in new product releases.
- Residential: Revenue grew 23% YoY to $460 million, driven by the inclusion of Zonda, which is expected to contribute $60 million in revenue for the full year.
- Apartments.com: Revenue increased 6%, but bookings were impacted by reduced sales force capacity and economic headwinds.
- LoopNet: Revenue rose 13% to $89 million, with a strong sales force contributing to a 30% sequential increase in net new bookings.
- Homes.com: Revenue surged 50% YoY to $31 million, with significant growth in membership and pricing.

3) Operational Adjustments and Strategic Initiatives
- The company identified $200 million in additional cost efficiencies, on top of the $150 million already anticipated for 2026.
- A new AI-driven research process for CoStar Tenant aims to significantly enhance productivity and data accuracy.
- The sales force is being decentralized, with a focus on hiring experienced field sales professionals to improve client engagement and productivity.
- The launch of Platinum Premium Advertising on Homes.com is expected to enhance revenue generation through increased exposure for listings.

4) Guidance and Future Outlook
- Full-year revenue guidance updated to $3.75 billion to $3.77 billion, reflecting a 16% increase at the midpoint.
- Q4 revenue expected to be between $976 million and $996 million, with adjusted EBITDA projected at $275 million to $295 million.
- The company remains committed to its long-term adjusted EBITDA target of $1.25 billion by 2028, supported by ongoing investments in technology and operational efficiencies.
- The recent acquisition of Vexcel is anticipated to enhance data capabilities and drive future growth.

5) Conclusion and Investor Considerations
- The earnings call highlighted strong financial results and strategic initiatives aimed at enhancing operational efficiency and revenue growth. However, challenges in bookings and sales force capacity were noted, particularly in the residential segment. The company is optimistic about future growth driven by new product launches and improved sales strategies.
- Bottom line: CoStar Group is positioned for continued growth with robust financial performance and strategic investments, but investors should monitor the effectiveness of its sales force adjustments and economic headwinds impacting bookings.