Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number 0-24531

CoStar Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware						52-2091509
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1331 L Street, NW
Washington,			DC			20005

(Address of principal executive offices) (zip code)

(202) 346-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol			Name of each exchange on which registered
Common Stock ($0.01 par value)			CSGP			Nasdaq Global Select Market

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer			x			Accelerated filer			o
Non-accelerated filer			o			Smaller reporting company			☐
						Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

o

Indicate by checkmark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No x

As of June 30, 2023, the aggregate market value of the common stock (based upon the closing price of the stock on the Nasdaq Global Select Market) of the registrant held by non-affiliates was approximately $36.0 billion. As of February 16, 2024, 408,409,321 shares of common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement, which is expected to be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2023 are incorporated by reference into Part III of this Report.

TABLE OF CONTENTS

			Glossary of Terms			4
PART I
Item 1.			Business			7
Item 1A.			Risk Factors			20
Item 1B.			Unresolved Staff Comments			32
Item 1C			Cybersecurity			33
Item 2.			Properties			34
Item 3.			Legal Proceedings			34
Item 4.			Mine Safety Disclosures			34
PART II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			35
Item 6.			Reserved			37
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			38
Item 7A.			Quantitative and Qualitative Disclosures about Market Risk			49
Item 8.			Financial Statements and Supplementary Data			51
Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			51
Item 9A.			Controls and Procedures			51
Item 9B.			Other Information			52
Item 9C.			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			52
PART III
Item 10.			Directors, Executive Officers and Corporate Governance			52
Item 11.			Executive Compensation			52
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			52
Item 13.			Certain Relationships and Related Transactions, and Director Independence			52
Item 14.			Principal Accountant Fees and Services			52
PART IV
Item 15.			Exhibits and Financial Statement Schedules			53
Item 16.			Form 10-K Summary			56
			Signatures			57
			Index to Consolidated Financial Statements			F-1

Glossary of Terms

The following abbreviations or acronyms used in this Annual Report on Form 10-K (this "Report") are defined below:

Abbreviation or Acronym			Definition
2020 Credit Agreement			The second amended and restated credit agreement, dated July 1, 2020, which amended and restated in its entirety the then-existing credit agreement originally entered into on April 1, 2014, as amended by the first amendment to the second amended and restated credit agreement, dated May 8, 2023.
ACH			Automated Clearing House
ADR			Average daily rate
Apartments.com Network			Apartments.com, the flagship brand of our network of apartment marketing sites, and its network of rental websites
ARS			Auction rate securities
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
Audit Committee			The Audit Committee of the Board
BizBuySell			BizBuySell.com and its network of business for-sale websites
Board			The CoStar Group Board of Directors
BureauxLocaux			The legal entity, Comreal Info, a French société par actions simplifiée, the owner and operator of BureauxLocaux, a commercial real estate digital marketplace, in France
BureauxLocaux Acquisition			CoStar UK's acquisition of BureauxLocaux completed on October 1, 2021 pursuant to a Share Sale and Purchase Agreement dated October 1, 2021 between CoStar UK, M.A.J.E. Marketing & Strategie and an individual
Business Immo			The legal entity BIH, a French société par actions simplifiée, the owner and operator of Business Immo, a leading commercial real estate news service provider in France
Business Immo Acquisition			CoStar UK's acquisition of the issued share capital of Business Immo on April 5, 2022
CAN-SPAM Act			Controlling the Assault of Non-Solicited Pornography and Marketing Act
CCPA			California Consumer Privacy Act, as amended by the California Privacy Rights Act
CECL			Current expected credit losses
CMBS			Commercial mortgage-based securities
CODM			Chief Operating Decision Maker
Confidential Information			Information about customers, employees, contractors, suppliers, vendors, and others such as landlords and tenants, including personal information such as names, addresses, phone numbers, email addresses, credit card information, biometric data, sensitive or confidential transaction and account information, social security numbers, birthdates and financial information (for example, to facilitate the apartment rental application and payment process between a renter and property manager), as well as a broad range of proprietary and confidential business information, collectively
CoStar Group			The legal entity, CoStar Group, Inc., a Delaware corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of CoStar Group, Inc. and its consolidated subsidiaries
CoStar UK			The legal entity, CoStar UK Limited, a wholly owned subsidiary of CoStar Group
Covenant Suspension Period			A period of time defined in the 2020 Credit Agreement in which we maintain a corporate investment grade rating from any two of Standard & Poor’s Rating Services, Fitch Ratings, Inc. or Moody’s Investors Services, Inc. and no event of default is continuing
CPA			Colorado Privacy Act
CPRA			The California Privacy Rights Act

Abbreviation or Acronym			Definition
CRI			CoStar Realty Information, Inc., a Delaware corporation and wholly owned subsidiary of CoStar Group, Inc.
DSUs			Deferred Stock Units
E.U.			European Union
EBITDA			Net income before interest income or expense, net; other income or expense, net; loss on debt extinguishment; income taxes; depreciation and amortization
ESG			Environmental, Social and Governance
ESPP			Employee Stock Purchase Plan
EURIBOR			Euro Interbank Offered Rate
FASB			Financial Accounting Standards Board
FCRA			Fair Credit Reporting Act
FTC			Federal Trade Commission
GAAP			Generally accepted accounting principles in the U.S.
GDPR			General Data Protection Regulation
GILTI			Global intangible low taxed income inclusion
GPP Plan			A U.K. Group Personal Pension Plan
Halo Merger Sub			Snapped Halo Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of CoStar Realty Information, Inc.
Homes.com			A homes-for-sale listings site
Homes Group			The legal entity Homes Group, LLC
Homes.com Acquisition			CRI's acquisition of Homes.com completed on May 24, 2021 pursuant to a securities purchase agreement dated April 14, 2021 between Landmark, Homes Group, LLC and CRI
Homes.com Network			Homes.com, the flagship brand of our North American network of online platforms that manage workflow and marketing for residential real estate agents and brokers and provide portals for homebuyers to view residential property listings
Homesnap			Homesnap is an online and mobile software platform that provides residential real estate professionals access to applications that manage residential real estate agent workflow and marketing campaigns delivered on third-party platforms acquired in the Homesnap Acquisition
Homesnap, Inc.			The legal entity Homesnap, Inc., a Delaware corporation
Homesnap Acquisition			CRI's acquisition of Homesnap completed on December 22, 2020, pursuant to an Agreement and Plan of Merger dated November 20, 2020 between CRI, Halo Merger Sub Corp and Homesnap, Inc. Halo Merger Sub Corp. was merged with and into Homesnap, Inc., with Homesnap, Inc. surviving the merger as a wholly-owned subsidiary of CRI
ILS			Internet listings services
IT Systems			Information technology networks, systems and infrastructure to process, transmit and store electronic information and to communicate among our locations around the world and with our clients and vendors, collectively
Land.com Network			Our network of sites featuring rural lands for sale including: LandsofAmerica, LandAndFarm and LandWatch
Landmark			Landmark Media Enterprises, LLC
LIBOR			London Interbank Offered Rate
LoopNet Network			Our network of online marketplaces, including LoopNet.co.uk, CityFeet.com and Showcase.com, enabling commercial property owners, landlords and real estate brokers working on their behalf to advertise properties for-sale or for-lease and to submit detailed information about property listings
Matching RSUs			Awards of matching restricted stock units awarded under the Company's Management Stock Purchase Plan
MLS			Multiple listing services
MSPP			Management Stock Purchase Plan

Abbreviation or Acronym			Definition
OnTheMarket			The legal entity OnTheMarket Plc, the operator of onthemarket.com, a leading U.K. residential property portal.
OnTheMarket Acquisition			CoStar UK's acquisition of OnTheMarket completed in December 2023, pursuant to Rule 2.7 of the United Kingdom City Code on Takeovers and Mergers. The acquisition has been implemented by means of a court-sanctioned scheme of arrangement under the U.K. Companies Act 2006
RentPath			RentPath Holdings, Inc.
RevPAR			Revenue per available room
ROU			Right-of-use
RRSP			A Canadian registered retirement savings plan
SEC			U.S. Securities and Exchange Commission
Securities Act			Securities Act of 1933, as amended
SEM			Search Engine Marketing
Senior Notes			2.800% notes issued by CoStar Group, Inc. due July 15, 2030
SEO			Search Engine Optimization
SOFR			Secured Overnight Financing Rate
SONIA			Sterling Overnight Index Average
STAR Report			A benchmarking tool used by the hospitality industry to compare a hotel's performance against a set of similar hotels in the same geographical area
STR			STR, LLC together with STR Global Ltd is a global data and analytics company that specializes in benchmarking hotel performance and providing market insights to the industry
TCPA			Telephone Consumer Protection Act (as implemented by the Telemarketing Sales Rule)
Ten-X			The legal entity Ten-X Holding Company, Inc. and its directly and indirectly owned subsidiaries
Ten-X Acquisition			CRI's acquisition of Ten-X completed on June 24, 2020, pursuant to an Agreement and Plan of Merger dated May 13, 2020 between CRI, Crescendo Sub, Inc, and Ten-X
Term SOFR			The forward-looking SOFR term rates administered by CME Group Benchmark Administration Limited
TSR			Total shareholder return
U.K.			The United Kingdom of Great Britain and Northern Ireland
U.S.			The United States of America
UCPA			Utah Consumer Privacy Act
VCDPA			Virginia Consumer Data Protection Act

Cautionary Statement Concerning Forward-Looking Statements

We have made forward-looking statements in this Report and make forward-looking statements in our other reports filed with the SEC, press releases and conference calls that are subject to risks and uncertainties. Forward-looking statements include information that is not purely historic fact and include, without limitation, statements concerning our financial outlook for the year ending December 31, 2024 and beyond, our possible or assumed future results of operations generally and other statements and information regarding assumptions or expectations about our revenues, revenue growth rates, gross margin percentage, net income, net income per share, fully diluted net income per share, EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per diluted share, weighted-average outstanding shares, cash flow from operating activities, operating costs, capital and other expenditures, the impact of current economic conditions on our revenues, revenue growth rates and profitability, key priorities for the year ending December 31, 2024, trends in customer behavior, legal proceedings and claims, legal costs, effective tax rate, product development and release, the anticipated benefits of completed or proposed acquisitions, the anticipated timing of acquisition closings and integrations, the anticipated benefits of cross-selling efforts, geographic and product expansion, planned service enhancements, expansion and development of our sales forces, planned sales and marketing activities and investments, investments in residential marketplace services and our residential marketplace strategy, the impact or results of sales and marketing initiatives, product integrations, elimination and de-emphasizing of services, net new bookings, contract renewal rates, use of proceeds from equity and debt offerings, the use of proceeds from any draws under our $750 million credit facility provided by the 2020 Credit Agreement, expectations regarding our compliance with financial and restrictive covenants in the 2020 Credit Agreement, employee relations, management’s plans, goals and objectives for future operations, sources and adequacy of liquidity and growth and markets for our stock. Sections of this Report that contain forward-looking statements include “Business,” “Risk Factors,” “Properties,” “Legal Proceedings,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk,” “Controls and Procedures” and the Consolidated Financial Statements and related Notes.

Our forward-looking statements are also identified by words such as “hope,” “anticipate,” “may,” “believe,” “expect,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology. You should understand that these forward-looking statements are estimates reflecting our judgment, beliefs and expectations, not guarantees of future performance. They are subject to a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. The following important factors, in addition to those discussed or referred to under the heading “Risk Factors,” and other unforeseen events or circumstances, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

• our inability to attract and retain new clients;

• our inability to successfully develop and introduce new or updated information, analytics and online marketplace services;

• our inability to compete successfully against existing or future competitors in attracting advertisers and in general;

• competition;

• the effects of fluctuations and market cyclicality;

• the effects of global economic uncertainties and downturns or a downturn or consolidation in the real estate industry;

• our inability to hire qualified persons for, or retain and continue to develop, our sales force, or unproductivity of our sales force;

• our inability to retain and attract highly capable management and operating personnel;

• the downward pressure that our internal and external investments may place on our operating margins;

• our inability in increasing brand awareness;

• our inability to maintain or increase internet traffic to our marketplaces, and the risk that the methods, including Google Analytics, that we use to measure unique visitors to our portals may misstate the actual number of unique persons who visit our network of mobile applications and websites for a given month or may differ from the methods used by competitors;

• our inability to attract new advertisers;

• our inability to successfully identify, finance, integrate and/or manage costs related to acquisitions;

• the effects of cyberattacks and security vulnerabilities, and technical problems or disruptions;

• the risks related to a large infrastructure project to build out our campus in Richmond, Virginia;

• our inability to generate increased revenues from our current or future geographic expansion plans;

• the risks related to acceptance of credit cards and debit cards and facilitation of other customer payments;

• the effects of climate change and other events beyond our control;

• the effects related to increased attention to ESG matters;

• our inability to obtain and maintain accurate, comprehensive or reliable data;

• our ability to enforce or defend our ownership and use of intellectual property;

• our inability to successfully halt the operation of websites that aggregate our data, data from other companies or “copycat” websites that may misappropriate our data;

• our inability to defend against potential legal liability for collecting, displaying or distributing information;

• our inability to obtain or retain listings from real estate brokers, agents, property owners and apartment property managers;

• our ability to maintain or establish relationships with third-party listing providers;

• our ability to comply with the rules and compliance requirements of MLSs;

• the risks related to international operations;

• the effects of foreign currency fluctuations;

• the effects of Brexit;

• our indebtedness;

• the effects of a lowering or withdrawal of the ratings assigned to our debt securities by rating agencies;

• the effects of any actual or perceived failure to comply with privacy or data protection laws, regulations or standards;

• the effects of changes in tax laws, regulations or fiscal and tax policies;

• the effects of third-party claims, litigation, regulatory proceedings or government investigations; and

• risks related to return on investment.

Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of, and are based on information available to us on, the date of this Report. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to update any such statements or release publicly any revisions to these forward-looking statements to reflect new information or events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events.

PART I