Earnings call transcript: CoStar Group beats Q3 2026 estimates, shares fall

CoStar Group released its Q3 2026 earnings on a conference call, beating Wall Street's expectations for both adjusted earnings per share (EPS) and revenue. However, the company's stock fell sharply after the report due to concerns over weaker bookings and slower sales-force growth.

Adjusted EPS came in at $0.38, exceeding the estimated $0.34, while revenue was $952 million, surpassing forecasts of $945 million. Adjusted EBITDA reached a record $229 million, representing a 100% year-over-year increase and a 24% margin expansion.

Despite the earnings beat, bookings were lower than expected, falling to $37 million for the quarter, well below the $84 million reported a year earlier. This factor, combined with slower sales-force growth, likely contributed to the stock's decline following the earnings release.

The company raised its full-year 2026 guidance for revenue, adjusted EBITDA, and adjusted EPS. Management also highlighted a shift in the business model, focusing on margin expansion, cost control, and sales-force restructuring while continuing to invest in new products, international expansion, and artificial intelligence.

Commercial revenue grew 7% to $492 million, while residential revenue increased 23% to $460 million, driven by the Zonda acquisition. Overall, CoStar demonstrated strong profitability and continued top-line growth, even though the pace of growth varied across its businesses.