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 Apartments.com.
“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 Apartments.com, 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 Apartments.com 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. However, the company is expected to recoup $10.75 million from Xceligent’s insurers, an agreement subject to approval by Delaware Bankruptcy Court.