CoStar Group (CSGP) 10-K risk factor changes: FY2024 vs FY2023

[removed: *Our revenues and financial position will be adversely affected if we are] [added: *We may] not [added: be] able to attract and retain [removed: clients.][added: new clients, which could adversely affect our revenues and financial position.]

[removed: We] [added: Our success and revenues depend on attracting and retaining subscribers to our information, analytics, and online marketplace services, which generate the largest portion of our revenues.* Our renewal rate, net new booking and revenues] may not [removed: be able to] [added: grow, or could decrease, if we cannot attract new customers,] continue to [removed: grow our customer base,] keep [removed: the] [added: our] cancellation rate [removed: low or] [added: low, and continue to] sell new services to [added: our] existing [removed: customers] [added: customers, which may occur] as a result of several factors, including, continuing global economic and geopolitical volatility, economic [removed: pressures] [added: pressures,] and the impact of inflation on our costs and on customer spending; the business failure of current clients; customer decisions that they do not need our services or to use alternative services; customers’ and potential customers’ budgetary constraints; consolidation in the real estate and/or financial services industries; data quality; technical problems; competitive pressures; or devaluation of the local currencies of international customers relative to the U.S. dollar which impairs the purchasing power of such customers.

*We may not be able to successfully develop and introduce new or upgraded [removed: information, analytics and] online marketplace [removed: services] [added: services, information, and analytics] that are attractive to our users and advertisers or successfully combine or shift focus from current services with less demand, which could decrease our revenues and our profitability.* Our future business and financial success will depend on our ability to continue to anticipate the needs of customers and potential customers and to successfully introduce new and upgraded services, including services that make our marketplaces useful for users and attractive to advertisers.

To be successful, we must be able to quickly adapt to changes in the industry, as well as rapid technological changes, [added: including AI and machine learning,] by continually enhancing our information, [removed: analytics] [added: analytics,] and online marketplace services.

As a result, we must continually invest resources in research and [removed: development] [added: development, both through internal investments and the acquisition of intellectual property from companies that we have acquired,] to improve the appeal and comprehensiveness of our services and effectively incorporate new [removed: technologies.][added: technologies, which could have an adverse effect on our financial results.]

Developing new services and upgrades to services, as well as integrating and coordinating current services, imposes heavy burdens on our systems department, product development team, [removed: management] [added: management,] and researchers.

The processes are costly, and our efforts to develop, [removed: integrate] [added: integrate,] and enhance our services may not be successful.

If we are unsuccessful in obtaining greater market share or in obtaining widespread adoption of new or upgraded services, we may not be able to offset the expenses associated with the development, [removed: launch] [added: launch,] and marketing of the new or upgraded service, which could have a material adverse effect on our financial results.

For example, we have and will continue to invest significantly in developing our marketplaces and [removed: content] [added: content,] and, to generate brand awareness and site traffic, we have and will continue to invest significant resources in multi-channel marketing campaigns for select marketplaces.

If these development efforts and marketing campaigns do not increase brand awareness, site traffic, subscriptions for marketplaces services and/or revenues, the cost of these campaigns could have an adverse effect on our [removed: financial results.][added: results of operation.]

If we eliminate or phase out a service and are not able to offer and successfully market and sell an alternative service, our revenues may decrease, which could have [removed: a material] [added: an] adverse effect on our results of operations.

[removed: *We] [added: | • | | | We operate in a highly competitive and rapidly changing market, and we] may not be able to compete successfully against existing or future competitors in attracting advertisers, which could harm our business, results of [removed: operations] [added: operations,] and financial [removed: condition.* We compete to attract advertisers.][added: condition. | | |]

Pressure from competitors seeking to acquire a greater share of our advertisers’ overall marketing budget could adversely affect our pricing and margins, lower our [removed: revenue] [added: revenue,] and increase our research and development and marketing expenses.

[added: The markets for information systems and services and for online marketplaces in general are highly competitive and rapidly changing.*] If we are unable to compete successfully against our existing or future competitors, our business, results of [removed: operations] [added: operations,] or financial condition could be adversely affected.

[removed: The markets for information systems and services and for online marketplaces in general are highly competitive and rapidly changing.*] Competition in these markets may increase [removed: further] if economic conditions or other circumstances cause customer bases and customer spending to decrease and service providers to compete for fewer customer resources.

Our existing or future competitors may have greater name recognition, larger customer bases, better technology or data, lower prices, easier access to data, greater user traffic or greater financial, [removed: technical] [added: technical,] or marketing resources than we have to provide services that users might view as superior to our offerings.

Competitors may introduce different solutions that attract users away from our services or provide solutions similar to ours that [added: have the advantage of better branding or marketing resources.]

Our competitors may be able to undertake more effective marketing campaigns, obtain more data, adopt more aggressive pricing policies, make more attractive offers to potential employees, subscribers, advertisers, distribution [removed: partners] [added: partners,] and content [removed: providers] [added: providers,] or may be able to respond more quickly to new or emerging technologies or changes in user requirements.

*Our operating results and revenues are subject to [removed: fluctuations] [added: fluctuations,] and our quarterly financial results may be subject to market cyclicality, each of which could negatively affect our stock price.* The real estate market may be influenced by general economic conditions, economic cycles, changes in interest rates, [removed: seasonality] [added: seasonality,] and many other factors, which in turn may impact our financial results.

The different sectors of the large and fragmented [added: real estate] industry, such as office, industrial, retail, multifamily, single [removed: family] [added: family,] and others, are influenced differently by different factors, and have historically moved through economic cycles with different timing.

For example, we generally see higher sales of Apartments.com listing services during the peak summer rental season and higher CoStar sales towards the end of the year; however, sales fluctuate from year-to-year and may fluctuate more widely when there are changes in general economic conditions or the [removed: industry.The timing of widely observed holidays and vacation periods, particularly slowdowns during the end-of-year holiday period, and availability of real estate agents and related service providers during these periods, could significantly affect our quarterly operating results during that period.][added: industry.]

If we are unable to adequately respond to economic, [removed: seasonal] [added: seasonal,] or cyclical conditions, our revenues, [removed: expenses] [added: expenses,] and operating results may fluctuate from quarter to quarter.

Our operating results, [removed: revenues] [added: revenues,] and expenses may fluctuate for many reasons, including those described in this paragraph and below:

Fluctuations in our financial results, [removed: revenues] [added: revenues,] and expenses may cause the market price of our common stock to decline.

*Global economic uncertainties and downturns or a downturn or consolidation in the real estate industry may decrease customer demand for our services and adversely affect our business and results of operations.* Global economic uncertainties or downturns could adversely affect our business and results of operations, including financial and credit market fluctuations, changes in economic policy, [removed: increased] [added: elevated] inflation and responsive actions, [removed: rising interest rates or a period of] elevated interest rates, labor shortages, supply chain disruptions, trade uncertainty, political unrest, geographical [removed: instability] [added: instability, unanticipated disasters] or [added: global health events, or] other impacts from the macroeconomic environment.

The real estate market may be adversely impacted by many different factors, including lower than expected job growth or job losses resulting in reduced real estate demand; reduced real estate demand due to continued remote work policies or a period of [removed: elevated interest rates;] [added: or] rising [added: elevated] interest rates, [added: elevated] inflation, slowing transaction [removed: volumes] [added: volumes,] and other macroeconomic trends that negatively impact investment returns; excessive speculative new construction in localized markets resulting in increased vacancy rates and diminished rent growth; unanticipated disasters or global health events; and other adverse events such as decreased growth in the working age population resulting in reduced demand for all types of real estate.

A depressed real estate market has a negative impact on our core customer base, which could decrease demand for [added: our online marketplaces, information, and analytics.]

Consolidation, or other cost-cutting measures by our customers, may lead to cancellations of our [removed: information, analytics and] online marketplace [removed: services] [added: services, information, and analytics] by our customers, reduce the number of our existing clients, reduce the size of our target [removed: market] [added: market,] or increase our clients’ bargaining power, all of which could cause our revenues to decline and reduce our profitability.

If cancellations, reductions of [removed: services] [added: services,] and failures to pay increase, and we are unable to offset the resulting decrease in revenues by increasing sales to new or existing customers, our revenues may decline or grow at lower rates.

*If we are unable to hire qualified persons for, or retain and continue to [removed: develop,] [added: develop] our sales force, or if our sales force is unproductive, our revenues could be adversely affected.* In order to support revenues and revenue growth, we need to continue to develop, [removed: train] [added: train,] and retain our sales force.

Our ability to build and develop a strong sales force may be affected by a number of factors, including: our ability to attract, [removed: integrate] [added: integrate,] and motivate sales personnel; our ability to effectively train our sales force; the ability of our sales force to sell an increased number and different types of services; our ability to manage effectively an outbound telesales group; the length of time it takes new sales personnel to become productive; the competition we face from other companies in hiring and retaining sales personnel; our ability to effectively structure our sales force; and our ability to effectively manage a multi-location sales organization, including field sales personnel.

*Our business depends on retaining and attracting highly capable management and operating personnel.* Our success depends in large part on our ability to retain and attract management and operating personnel, including our President and Chief Executive Officer, Andrew Florance, and our other [removed: officers] [added: officers,] and key employees.

Our business requires highly skilled technical, sales, management, web product and development, [removed: marketing] [added: marketing,] and research personnel, who are in high demand and are often subject to competing offers.

If [removed: Mr. Florance] [added: we] were to [removed: become unavailable] [added: lose the services of Mr. Florance] for any reason, there could be a material adverse impact on our operations.

The loss of other key personnel, including members of [removed: management] [added: management,] as well as key technology, product development, and marketing personnel, could also disrupt our operations and have an adverse effect on our business.

If we are unable to successfully execute our investment strategy, we may experience decreases in our [removed: revenues] [added: revenues,] or revenue growth [removed: rate] [added: rate,] and operating margins.

If we are unable to do so successfully, our brands may be adversely affected, and we may not be able to maintain or grow our current revenue and profit levels.* [removed: In February 2024] [added: To remain competitive and stimulate consumer and business demand,] we [removed: launched our Homes.com monetization strategy.][added: must successfully manage new product introductions and transitions of]

Failure to gain market acceptance for Homes.com [added: or any other new product] could impede our ability to maintain or grow current revenue levels or reduce profits for our other brands, adversely affect the image of our brands, erode our competitive position, and result in long-term harm to our [removed: business] [added: business,] and financial results.

*We may be unable to increase awareness of our brands, including CoStar, LoopNet, Apartments.com, [removed: Homes.com] [added: Homes.com,] Land.com, BizBuySell, STR, Ten-X, and OnTheMarket, which could adversely affect our business.* We rely heavily on our brands, which we believe are key assets of our company.

Awareness and differentiation of our brands are important for attracting and expanding the number of users of, and subscribers to, our online marketplaces, such as the LoopNet Network, the Apartments.com Network, [removed: our] [added: the] Homes.com and OnTheMarket residential marketplaces, [added: and] the Land.com [removed: Network and our CoStar Showcase.][added: Network.]

Summary of Risk Factors

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| Risks related to our business | | | | | |

| • | | | If we are unable to attract and retain new clients, particularly subscribers to our information, analytics, and online marketplace services, our revenues and financial position will be adversely affected. | | |

| • | | | Failure to develop and introduce new or upgraded information, analytics, and online marketplace services or to shift focus from current services with less demand could decrease our revenues and our profitability. | | |

| • | | | Our operating and financial results are subject to fluctuations and market cyclicality, which could negatively affect our stock price. | | |

| • | | | Global economic uncertainties and downturns or a downturn or consolidation in the real estate industry may decrease customer demand for our services and adversely affect our business and results of operations. | | |

| • | | | If we are unable to hire qualified persons for, or retain and continue to develop our sales force, or if our sales force is unproductive, our revenues could be adversely affected. | | |

| • | | | Our business depends on retaining and attracting highly capable management and operating personnel. | | |

| • | | | Our internal and external investments may place downward pressure on our operating margins. | | |

| • | | | We may not be able to maintain or grow our current revenue and profit levels. | | |

| • | | | We may be unable to increase awareness of our brands, which could adversely affect our business. | | |

| • | | | If internet search engines do not prominently feature our websites on the search engine results page, traffic to our websites would decrease, and, if we are unable to maintain or increase traffic to our marketplaces, our business and operating results could be adversely affected. | | |

| • | | | If real estate professionals or other advertisers reduce or cancel their advertising spending with us and we are unable to attract new advertisers, our operating results would be harmed. | | |

| • | | | If we are unable to successfully identify, finance, integrate, and/or manage costs related to acquisitions, our business operations and financial position could be adversely affected. | | |

| • | | | Our strategic transactions, including the acquisition of Matterport, may be subject to regulatory approvals and may not be completed as contemplated. | | |

| • | | | We may be unable to complete the acquisition of Matterport or otherwise realize the benefits of the pending Matterport acquisition, which could have an adverse effect on us. | | |

| • | | | Cyberattacks and security vulnerabilities could result in serious harm to our reputation, business, and financial condition. | | |

| • | | | Technical problems or disruptions could damage our reputation and lead to reduced demand for our information, analytics, and online marketplace services, lower revenues and increased costs. | | |

| • | | | The significant costs associated with building our campus in Richmond, Virginia, have impacted and will continue to impact our financial condition and results of operations. | | |

| • | | | We may not be able to successfully expand geographically, which may negatively impact our business. | | |

| • | | | Climate related events and other events beyond our control could harm our business. | | |

| • | | | Attention to ESG matters may require us to incur additional costs or otherwise adversely impact our business. | | |

| • | | | If we are not able to obtain and maintain accurate, comprehensive, or reliable data, we could experience reduced demand for our services. | | |

| • | | | If we are unable to enforce or defend our ownership and use of intellectual property, our business, brands, competitive position, and operating results could be harmed. | | |

| • | | | Use of new and evolving technologies, including AI, could impact our ability to protect our data and intellectual property from misappropriation by third parties. | | |

| • | | | We may be subject to legal liability for collecting, displaying, or distributing information. | | |

| • | | | Our services could be less attractive and our revenues may decrease if we fail to obtain or retain listings from third parties, to maintain or establish relationships with third-party listing providers, maintain stable data feeds, or to comply with the rules and compliance requirements of MLSs. | | |

| Risks related to our international operations | | | | | |

| • | | | We are exposed to additional business risks from our international operations, including volatility in foreign currency exchange rates. | | |

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| Risks related to our indebtedness | | | | | |

| • | | | Our significant indebtedness could decrease our flexibility and adversely affect our business, financial condition, and results of operations. | | |

| • | | | A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs, reduce our access to capital, or result in the loss of certain covenant suspensions. | | |

| Risks related to regulatory compliance and legal matters | | | | | |

| • | | | Our actual or perceived failure to comply with privacy laws and standards could adversely affect our business, financial condition, and results of operations. | | |

Our success and revenues depend on attracting and retaining subscribers to our information, analytics and online marketplace services.

Our subscription-based services generate the largest portion of our revenues.* Our revenue may not grow, or could decrease, if we cannot attract new customers, continue to keep our cancellation rate low and continue to sell new services to our existing customers.

We compete against many other real estate information, analytics and marketing service providers for business.

If clients cancel services or decide not to renew their subscription agreements and we do not sell new services to our existing clients or attract new clients, then our renewal rate, net new bookings and revenues may decline or fail to meet expectations.

Our competitors may have greater brand recognition or more direct sales personnel than we have and may generate more web traffic than we do, which may provide them with competitive advantages.

have the advantage of better branding or marketing resources.

In response to concerns over inflation, the U.S. Federal Reserve raised interest rates in each quarter of 2022 and the first, second and third quarters 2023.

our information, analytics and online marketplaces.

attract users to our websites.

For example, we incurred a termination fee of $52 million in connection with termination of the RentPath purchase agreement.

Our efforts to prevent, detect and respond to data

Further, the security measures and procedures our customers, vendors and other users of our systems have in place to protect IT Systems and Confidential Information may not be successful or sufficient to counter all data breaches, cyberattacks or system failures.

Notwithstanding our efforts, there can be no assurance that vulnerabilities in widely deployed software will not materially harm our business.

Any breach of our security measures or the loss, inadvertent disclosure or unapproved dissemination of Confidential Information about us or our customers, including the potential loss or disclosure of such information or data, could result in litigation, regulatory enforcement and potential liability for us, damage our brand and reputation or otherwise materially harm our business, financial condition or competitive position.

Any errors, defects, disruptions or other performance problems with our services could harm our reputation, business, results of operations and financial condition.

*Our business and results of operations may be, and our financial condition may be, impacted by the lasting effects of the COVID-19 pandemic on the global economy, the real estate industry, and our customers and such impact could be materially adverse and continue for an unknown period of time.* The COVID-19 pandemic created significant economic volatility, uncertainty and disruption around the world, including in the real estate industry.

The demand for office space decreased during and following the COVID-19 pandemic as businesses implemented hybrid or all work-from-home arrangements in response to employee desire for more flexibility, which may lead to a downturn in the commercial real estate market.

A depressed commercial real estate market would have a negative impact on our core customer base, which could impact our customers’ ability to subscribe and pay for our services and reduce demand for our services.

Reduced demand and increased cancellations could cause our revenues or our revenue growth rates to decline and reduce our profitability.

The extent and duration of any future weakening of the economy or future downturns in the commercial real estate market as a lasting result of the COVID-19 pandemic is unknown, and there can be no assurance that any of the governmental or private sector initiatives designed to strengthen the economy will be successful or available to us and our customers and, if successful, when the benefits will be seen.

disrupt our operations, as well as the operations of our suppliers and customers.

*Increased attention to ESG matters may require us to incur additional costs or otherwise adversely impact our business.* Increased attention to climate change; diversity, equity, and inclusion; and other ESG issues, as well as societal expectations regarding voluntary ESG initiatives and disclosures, may result in increased costs (including, but not limited to, increased costs related to compliance, stakeholder engagement, and contracting), impact our reputation, or otherwise affect our business performance.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on ESG matters.

Such ratings are used by some investors to inform their investment or voting decisions.

Unfavorable ESG ratings could lead to negative investor sentiment toward us and/or our industry, which could have a negative impact on our access to and costs of capital.

To the extent ESG matters negatively impact our reputation, we may also not be able to compete as effectively to recruit or retain employees.

We may take certain actions, including the establishment of ESG-related goals or targets, to improve the ESG profile of our Company and/or offerings and/or to respond to stakeholder demand; however, such actions may be costly or be subject to numerous conditions that are outside our control, and we cannot guarantee that such actions will have the desired effect.

Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.

Such disclosures may also be at least partially reliant on third-party information that we have not independently verified or cannot be independently verified.

In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters, and increased regulation will likely lead to increased compliance costs as well as scrutiny that could heighten all of the risks identified in this risk factor.

Such ESG matters may also impact our suppliers or customers, which may adversely impact our business, financial condition, or results of operations.

adequately against unauthorized third-party copying or use, which could harm our competitive position.

may be used and how listings data must be displayed on our websites and mobile applications.

merge or consolidate with another person, and (v) sell, assign, lease or otherwise dispose of all or substantially all of our assets.

In May 2023, we amended the 2020 Credit Agreement to replace LIBOR as the reference rate with Term SOFR for U.S. dollar-denominated borrowings, SONIA rates for Sterling-denominated borrowings and EURIBOR for Euro-denominated borrowings.

All forward-looking statements are based on information available to us on the date of this filing and we assume no obligation to update such statements, whether as a result of new information, future [removed: events] [added: events,] or [removed: otherwise.][added: otherwise, except as required by applicable law.]

The following discussion should be read in conjunction with our Quarterly Reports on Form 10-Q, Current Reports on Form [removed: 8-K and] [added: 8-K,] other filings with the [removed: SEC] [added: SEC,] and the consolidated financial statements and related notes included in [added: Part IV of] this Report.

Our principal [removed: information, analytics and] online marketplace [removed: services] [added: services, information, and analytics] are described in the following paragraphs by type of service:

CoStar is our subscription-based integrated platform for commercial real estate intelligence, which includes information about [removed: office, industrial, retail, multifamily, hospitality and student housing] [added: commercial real estate] properties, properties for sale, comparable sales, tenants, space available for lease, industry professionals and their business relationships, industry news and market status and provides [added: benchmarking for the hospitality industry,] lease [removed: analytical, risk management,] [added: analytical capabilities,] and [removed: hospitality benchmarking capabilities.][added: risk management capabilities for lenders.]

[removed: CoStar's] [added: We expect LoopNet's] revenue growth rate for the year [removed: ended] [added: ending] December 31, [removed: 2023 slowed compared] [added: 2025] to [added: be consistent with] the [added: revenue growth rate for the] year ended December 31, [removed: 2022.][added: 2024.]

We expect CoStar's revenue growth rate for the year ending December 31, [removed: 2024] [added: 2025] to [removed: be consistent with] [added: decelerate compared to] the revenue growth rate for the year ended December 31, [removed: 2023] [added: 2024] primarily due to [added: a lack of benefit from] converting legacy STR customers to our new [removed: CoStar based] [added: CoStar-based] benchmarking product [removed: offsetting lower inflation-based price adjustments.][added: realized in 2024.]

We provide real estate and lease management technology solutions, including lease administration, lease [removed: accounting] [added: accounting, transaction management,] and [removed: abstraction services,] [added: professional services] through our CoStar Real Estate Manager [removed: service offerings, as well as portfolio] and [removed: debt analysis, management and reporting capabilities through our CoStar Risk Analytics] [added: Visual Lease] service offerings.

[added: We expect] Information [removed: Services] [added: Services'] revenue growth rate for the year [removed: ended] [added: ending] December 31, [removed: 2023 slowed] [added: 2025 to accelerate] compared to the [added: revenue growth rate for the] year ended December 31, [removed: 2022.][added: 2024 as a result of the Visual Lease Acquisition.]

Apartments.com is the flagship brand of our apartment marketing network of subscription-based advertising services and provides property management companies and landlords with a comprehensive advertising destination for their available rental [removed: units and offers renters a platform for searching for available rentals.][added: units.]

[removed: This network also] [added: In addition, it offers renters a platform for searching for available rentals and] earns transaction-based revenue primarily from providing online tenant applications, including background and credit checks, and rental payment processing.

We expect Multifamily's revenue growth rate for the year ending December 31, [removed: 2024] [added: 2025] to moderate compared to the revenue growth rate for the year ended December 31, [removed: 2023] [added: 2024,] due to [removed: lower inflation-based price adjustments.][added: the impact in 2025 of pivoting the Apartments.com sales force to support the Homes.com product launch in 2024.]

Our LoopNet [removed: network] [added: Network] of commercial real estate websites offer subscription-based, online marketplace services that enable commercial property owners, [removed: landlords] [added: landlords,] and real estate agents working on their behalf to advertise properties for sale or for [removed: lease and to submit detailed information about property listings.][added: lease.]

Commercial real estate agents, [removed: buyers] [added: buyers,] and tenants use the LoopNet [removed: network] [added: Network] of online marketplace services to search for available property listings that meet their criteria.

We expect Residential's revenues for the year ending December 31, [removed: 2024] [added: 2025] to [removed: increase] [added: increase, but at a slower rate,] compared to the year ended December 31, [removed: 2023] [added: 2024] due to [removed: the OnTheMarket Acquisition and the launch] [added: additional sales] of our [removed: new] Homes.com [removed: product.][added: memberships.]

Our other marketplaces include Ten-X, an online auction platform for commercial real [removed: estate] [added: estate, our Land.com Network,] and our BizBuySell [removed: and Land.com networks.][added: Network.]

The [removed: BizBuySell network] [added: Land.com Network] provides online marketplaces for [removed: businesses and franchises] [added: rural lands] for [removed: sale,] [added: sale] and [removed: THE Land.com network] [added: BizBuySell Network] provides online marketplaces for [removed: rural land] [added: businesses and franchises] for sale.

We expect [removed: other marketplaces'] [added: Other Marketplaces'] revenues for the year ending December 31, [removed: 2024] [added: 2025] to [removed: be consistent with] [added: increase compared to] the revenues for the year ended December 31, [removed: 2023.][added: 2024 due to increased revenues from our Land.com and BizBuySell Networks.]

The majority of our revenue is generated from service offerings that are distributed to our [removed: clients] [added: customers] under subscription-based agreements that typically renew automatically and have a term of at least one year.

For the years ended December 31, [added: 2024,] 2023, [removed: 2022] and [removed: 2021,] [added: 2022,] our annualized net new bookings of subscription-based services on all contracts were approximately [added: $250 million,] $286 million, [removed: $305 million] and [removed: $217] [added: $305] million, respectively.

Net new bookings is calculated based on the annualized amount of change in the Company's sales bookings resulting from new subscription-based contracts, changes to existing subscription-based [removed: contracts] [added: contracts,] and cancellations of subscription-based contracts for the period reported.

[removed: Revenue] [added: Revenues] from our subscription-based contracts were approximately [added: 96%,] 95%, [removed: 93%] and 93% of total [removed: revenue] [added: revenues] for the years ended December 31, [added: 2024,] 2023, [removed: 2022] and [removed: 2021,] [added: 2022,] respectively.

The increase in the percentage of our [removed: revenue] [added: revenues] from subscription-based contracts from [removed: 2022 to] 2023 [added: to 2024] was [removed: primarily] due to [removed: the growth] [added: increased sales] in our [removed: subscription-based services.][added: Multifamily products.]

For the trailing 12 months ended December 31, [added: 2024,] 2023, [removed: 2022] and [removed: 2021,] [added: 2022,] our contract renewal rates for subscription-based services for contracts with a term of at least one year were approximately [added: 89%,] 90%, [removed: 90%] and [removed: 92%,] [added: 90%,] respectively; and, therefore, our cancellation rates for those services for the same periods were approximately [added: 11%,] 10%, [removed: 10%] and [removed: 8%,] [added: 10%,] respectively.

Our trailing 12-month contract renewal rate may decline as a result of negative economic conditions, consolidations among our clients, reductions in customer [removed: spending] [added: spending,] or decreases in our customer base.

[removed: Revenue] [added: Revenues] from our subscription-based contracts with a term of at least one year were approximately [added: 81%,] 82%, [removed: 80%] and [removed: 77%] [added: 80%] of total [removed: revenue] [added: revenues] for the trailing 12 months ended December 31, [added: 2024,] 2023, [removed: 2022] and [removed: 2021,] [added: 2022,] respectively.

The [removed: increase] [added: decrease] in the percentage of our revenue from subscription-based contracts [removed: for contracts] with a term of at least one year from [removed: 2022 to] 2023 [added: to 2024] was [added: primarily] due to increases in sales of [removed: longer term advertising] [added: shorter-term Multifamily] products.

[removed: Development, Investments] [added: Development, Investments,] and [removed: Expansion][added: Expansion]

We plan to continue to invest in our business and our services, evaluate strategic growth [removed: opportunities] [added: opportunities,] and pursue our key priorities as described below.

We are committed to supporting, [removed: improving] [added: improving,] and enhancing our [removed: information, analytics and] online marketplace solutions, [added: information, and analytics,] including expanding and improving our offerings for our client base and site users, including property owners, property managers, buyers, commercial [removed: tenants] [added: tenants,] and residential renters and buyers.

We expect to continue our software development efforts to improve existing services, introduce new services, integrate and cross-sell services, integrate recently completed [removed: acquisitions] [added: acquisitions,] and expand and develop supporting technologies for our research, [removed: sales] [added: sales,] and marketing organizations.

Our key priorities for [removed: the year ending December 31, 2024] [added: 2025] currently include:

[removed: *•*Continuing] [added: - Continuing] to [removed: develop and] invest in [removed: our residential marketplaces.][added: and develop Homes.com.]

[removed: We intend to continue to assess the need for additional investments in] our business in order to develop and distribute new services and functionality within our current platform or expand the reach of, or otherwise improve, our current service offerings.

Any future product development or expansion of services, combination and coordination of [removed: services] [added: services,] or elimination of services or corporate expansion, [removed: development] [added: development,] or restructuring efforts could reduce our profitability and increase our capital expenditures.

Any new investments, changes to our service [removed: offerings] [added: offerings,] or other unforeseen events could cause us to experience reduced revenues or generate losses and negative cash flow from operations in the future.

For further discussion of our Company, [removed: strategy] [added: strategy,] and products, see our business overview set forth in "Item 1.

We also disclose and discuss certain non-GAAP financial measures in our public releases, investor conference [removed: calls] [added: calls,] and filings with the SEC.

The non-GAAP financial measures that we may disclose include EBITDA, adjusted EBITDA, [added: and] adjusted EBITDA [removed: margin,][added: margin.]

EBITDA is our net income before interest income or expense, net, other [removed: income] [added: expense] or [removed: expense,] [added: income,] net, loss on debt extinguishment, income taxes, depreciation and amortization.

We typically disclose EBITDA on a consolidated and an operating segment basis in our earnings releases, investor conference [removed: calls] [added: calls,] and filings with the SEC.

We also provide data and reports on an ad hoc basis to customers in the hospitality industry.

Homes.com offers real estate agents subscription memberships promoting the agent's home listings and profile on our websites.

Homebuyers and real estate agents use Homes.com to find dream homes using our proprietary research and neighborhood content combined with listing information.

OnTheMarket is a property portal in the U.K., which primarily hosts agents' listings on a subscription basis.

We generally see higher net new bookings of Apartments.com listing services during the peak summer rental season and higher CoStar net new bookings towards the end of the year; however, sales fluctuate from year-to-year and revenue is not generally seasonal because our services are typically sold on a subscription basis.

In 2024, we launched Homes.com memberships giving real estate agents the ability to advertise and promote their listings on our website featuring original, media rich content.

In 2025, we plan to continue hiring our dedicated Homes.com sales force.

We plan to continue to raise unaided brand awareness of the site through targeted marketing campaigns and to continue to focus on attracting recurring visitors to the site.

In addition, we plan to develop and market additional products.

- Continuing to expand our CoStar and LoopNet products internationally.

We continue to increase our international research team to collect data in European markets.

We plan to launch our LoopNet brand in France and Spain and continue to expand our footprint of commercial listings.

- Using the aggregate and anonymized data from leases within CoStar Real Estate Manager and Visual Lease to create a trusted source of pricing and occupancy information for Commercial Real Estate.

We also plan to begin the integration of the CoStar Real Estate Manager and Visual Lease products.

We expect our investment in the sales force will increase our selling and marketing expenses for the year ending December 31, 2025 compared to the year ended December 31, 2024.

We intend to continue to assess the need for additional investments in

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| __________________________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| CoStar | | | $ | 1,020.5 | | | | | $ | 925.2 | | | | | $ | 95.3 | | | | | 10 | | % |

| Information services | | | 135.9 | | | | | | 170.9 | | | | | | (35.0) | | | | | | (20) | | |

| Multifamily | | | 1,067.3 | | | | | | 914.2 | | | | | | 153.1 | | | | | | 17 | | |

| LoopNet | | | 281.7 | | | | | | 264.8 | | | | | | 16.9 | | | | | | 6 | | |

| Residential | | | 100.6 | | | | | | 46.1 | | | | | | 54.5 | | | | | | 118 | | |

| Other marketplaces | | | 130.2 | | | | | | 133.8 | | | | | | (3.6) | | | | | | (3) | | |

| Total revenues | | | 2,736.2 | | | | | | 2,455.0 | | | | | | 281.2 | | | | | | 11 | | |

| Cost of revenues | | | 558.5 | | | | | | 491.5 | | | | | | 67.0 | | | | | | 14 | | |

| Gross profit | | | 2,177.7 | | | | | | 1,963.5 | | | | | | 214.2 | | | | | | 11 | | |

| Software development | | | 325.3 | | | | | | 267.6 | | | | | | 57.7 | | | | | | 22 | | |

| Net income | | | $ | 138.7 | | | | | $ | 374.7 | | | | | $ | (236.0) | | | | | (63) | | % |

| __________________________ | | | | | | | | | | | | | | | | | | | | | | | |

(1) Not meaningful

- an increase in CoStar revenues of $95 million, or 10%, due to an increase in subscribers and price increases, as well as converting legacy STR customers to our new CoStar-based benchmarking product,

- a decrease in Information services revenues of $35 million, or 20%, attributable to converting legacy STR customers to our new CoStar-based benchmarking product, partially offset by an increase in revenue from CoStar Real Estate Manager and the Visual Lease Acquisition, and

- an increase of $17 million for web hosting costs, and

- an increase of $6 million of payment processing fees.

- an increase in personnel costs of $67 million related to rising headcount in our sales force, recruiting costs, and commissions expense.

The increase primarily included:

- an increase of $9 million in software and equipment costs, and

- an increase of $3 million in occupancy costs.

We also provide benchmarking and analytics for the hospitality industry both on a subscription basis and an ad hoc basis.

We earn revenue on ad hoc transactions as reports or data are delivered to customers.

We provide information services internationally, through our Business Immo, Belbex and Thomas Daily businesses in France, Spain and Germany, respectively.

We expect Information Services' revenue growth rate for the year ending December 31, 2024 to slow compared to the revenue growth rate for the year ended December 31, 2023 as a result of transitioning legacy STR customers to our new CoStar based benchmarking product.

Multifamily's revenue growth rate for the year ended December 31, 2023 accelerated compared to the year ended December 31, 2022 as a result of higher sales volumes driven by increases in pricing on renewals and an increase in the number of properties listed on our network.

LoopNet's revenue growth rate for the year ended December 31, 2023 accelerated compared to the year ended December 31, 2022, due to an increase in the average price per listing.

We expect LoopNet's revenue growth rate for the year ending December 31, 2024 to

slow compared to the revenue growth rate for the year ended December 31, 2023 as a result of disruptions related to transitioning sales and service activities to a dedicated LoopNet field sales team.

Our Homes.com Network and the acquisition of OnTheMarket have enabled us to expand our offerings to the residential for sale market.

Homes.com is a homes for sale listings site that combines our proprietary research with listing information to allow homebuyers an informative and collaborative experience finding homes for sale or lease.

Homes.com provides residential real estate professionals subscription-based access to applications that manage residential real estate agent workflow and receives transaction-based revenue for marketing campaigns delivered on third-party platforms.

In February 2024, we began selling subscription memberships to promote the home listing as well as the agent in the sort order.

OnTheMarket is a property portal in the U.K., which primarily offers subscriptions-based advertising services to agents.

Residential's revenues for the year ended December 31, 2023 decreased compared to the year ended December 31, 2022, due to the discontinuation of certain non-strategic products and services.

Other marketplaces' revenues for the year ended December 31, 2023 decreased compared to the year ended December 31, 2022, due to lower Ten-X transaction revenue, partially offset by growth in other products.

The decrease in the percentage of our revenue from subscription-based contracts with a term of at least one year from 2023 to 2022 was primarily due to the acquisitions of companies that contained a higher percentage of transaction-based revenue than our legacy businesses, as well as increases in sales of shorter term advertising products.

For Homes.com we are creating additional content for neighborhoods, parks, schools and condos.

In February 2024, we launched our new Homes.com subscription memberships to promote the home listing as well as the agent in the sort order on the website.

We intend to create an expanded dedicated sales force, to supplement the efforts of our sales team already in place.

We plan to increase our residential marketing investment, including the launch of a brand campaign.

For OnTheMarket, we plan to integrate OnTheMarket into the Company’s operations including additional investment in marketing, content creation and enhancing OnTheMarket’s website to improve performance and facilitate better search engine optimization.

- Continuing to enhance our facilities.

We are expanding our research and technology center in Richmond, Virginia.

We broke ground on the expansion in November 2022 and expect construction to be substantially completed in the first half of 2026.

The expansion includes construction of two new buildings spanning 750,000 square feet and will bring our campus footprint to over 1 million square feet when completed.

We plan to increase our research, technology, operations, software development, marketing and sales teams in this location.

In February 2024, we closed on the purchase of a building in Arlington, Virginia and we plan to build out a space for our employees.

The lease on our current Washington, DC headquarters ends in 2025.

We expect our investment in these priorities will increase our research, selling and marketing and facilities expenses, including potential impairments of assets associated with the acquired building.

Each of these will reduce our net income and may reduce our cash on hand for the year ending December 31, 2024 compared to the year ended December 31, 2023.

Impacts of Current Economic Conditions

In response to the concerns over inflation risk, the U.S. Federal Reserve raised interest rates over the past two years.

It is currently unclear how the commercial real estate industry will ultimately be impacted by the current economic conditions.

Rising interest rates or a period of elevated interest rates may reduce demand for all types of real estate.

If the demand for office space or other real estate decreases significantly, there could be a downturn in the commercial real estate market that may materially adversely affect many of our clients.

A depressed commercial real estate market would have a negative impact on our core customer base, which could impact our customers’ ability to subscribe and pay for our services and reduce demand for our services.

Reduced demand and increased cancellations could cause our revenues or our revenue growth rates to decline and reduce our profitability.

non-GAAP net income and non-GAAP net income per diluted share.

Non-GAAP net income is determined by adjusting our net income for stock-based compensation expense, acquisition- and integration-related costs, restructuring costs, settlement and impairment costs incurred outside our ordinary course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes.

Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share.

We provide [removed: information, analytics and] online marketplace [removed: services] [added: services, information, and analytics] to commercial real estate and related business communities within the regions where we operate which primarily include, North America, Europe, [removed: Asia-Pacific] [added: Asia-Pacific,] and Latin [added: America.]

Fluctuations in the British Pound, Canadian dollar and Euro may have an impact on our business, results of [removed: operations] [added: operations,] and financial position.

For [removed: both] the years ended December 31, [removed: 2023] [added: 2024] and December 31, [removed: 2022,] [added: 2023,] revenues denominated in foreign currencies were approximately [removed: 4%,] [added: 5% and 4%] of total [removed: revenue.][added: revenue, respectively.]

For the years ended December 31, [removed: 2023] [added: 2024] and December 31, [removed: 2022,] [added: 2023,] our revenues would have decreased by approximately [removed: $10] [added: $14] million and [removed: $8] [added: $10] million, respectively, if the U.S. dollar exchange rate used strengthened by 10%.

For the years ended December 31, [removed: 2023] [added: 2024] and December 31, [removed: 2022,] [added: 2023,] our revenues would have increased by approximately [removed: 4%] [added: $14 million] and [removed: $8] [added: $10] million, respectively, if the U.S. dollar exchange rate used weakened by 10%.

[removed: We currently] do not use financial instruments to hedge our exposure to exchange rate fluctuations with respect to our foreign subsidiaries.

As of December 31, [removed: 2023,] [added: 2024,] accumulated other comprehensive loss included a loss from foreign currency translation adjustments of approximately [removed: $17.6] [added: $25.5] million.

We do not believe we have material exposure to market risks associated with changes in interest rates related to cash equivalent securities held as of December 31, [removed: 2023.][added: 2024.]

As of December 31, [removed: 2023,] [added: 2024,] we had [added: $4.7 billion] of cash and cash equivalents.

On [removed: July 1, 2020,] [added: May 20, 2024,] we entered into the [removed: 2020] [added: 2024] Credit Agreement, which provides for variable rate borrowings of up to [removed: $750 million.][added: $1.1 billion.]

Changes in interest rates would not have a material impact to our current interest and debt financing expense, as all of our borrowings except for our credit facility are fixed rate, and no amounts were outstanding under our credit facility as of December 31, [removed: 2023.][added: 2024.]

See Note 11 of the Notes to the Consolidated Financial Statements included in [added: Part IV of] this Report for additional information regarding our [removed: 2020] [added: 2024] Credit Agreement.

We had approximately [removed: $2.7] [added: $3.0] billion of goodwill and intangible assets as of December 31, [removed: 2023.][added: 2024.]

As of December 31, [removed: 2023,] [added: 2024,] we believe our intangible assets will be recoverable; however, changes in the economy, the business in which we operate and our own relative performance could change the assumptions used to evaluate intangible asset recoverability.

We currently

America.

In this Report, the words “we,” “our,” “us,” “CoStar [removed: Group”] [added: Group,”] or the “Company” refer to CoStar Group, Inc. and its direct and indirect wholly owned subsidiaries.

[removed: CoStar Group, founded in 1987, is a leading provider of online real estate marketplaces, information and analytics in the U.S. and U.K. based on the fact that we] [added: We] own and operate leading online marketplaces for [removed: commercial] real estate [removed: and apartment listings] in the [removed: U.S.,] [added: U.S. and the U.K.,] based on the numbers of unique visitors and site visits per month; provide more information, [removed: analytics] [added: analytics,] and marketing services than [removed: any] [added: many] of our competitors; offer the most comprehensive commercial real estate database available; and have the largest commercial real estate research department in the industry.

We have created and compiled a standardized platform of [removed: information, analytics and] online marketplace [removed: services] [added: services, information, and analytics] where industry [removed: professionals and] [added: professionals,] consumers of [removed: commercial] real estate, [removed: including apartments,] and the related business [removed: communities,] [added: communities] can continuously interact and facilitate transactions by efficiently accessing and exchanging accurate and standardized real estate-related information.

[removed: Industry Overview][added: Overview]

A large number of parties involved in commercial and residential real estate and the related business community [removed: make] use [removed: of] the services we provide [removed: in order] to obtain information they need to conduct their businesses, including:

Our strategy is to provide real estate industry professionals and consumers with critical knowledge to explore and complete transactions by offering the most comprehensive, [removed: timely] [added: timely,] and standardized information on real [removed: estate] [added: estate,] and the right tools to be able to effectively utilize that information.

Over time, we have expanded, and we continue to expand, our services for real estate [added: online marketplaces,] information, [removed: analytics] and [removed: online marketplaces in an effort] [added: analytics] to continue to meet the needs of the industry as it grows and evolves.

Our standardized platform includes the most comprehensive proprietary database of commercial real estate information in the industry; the largest research department in the commercial real estate industry; proprietary data collection, information [removed: management] [added: management,] and quality control systems; a large in-house product development team; a broad suite of web-based information, [removed: analytics] [added: analytics,] and online marketplace services; a large team of analysts and economists; risk management tools; and a large, diverse base of clients.

Our comprehensive commercial real estate database powers our information services, sources data used in our analytic [removed: services] [added: services,] and provides content for most of our online marketplace services and our auction platform.

We deliver our comprehensive commercial real estate information content to our customers primarily via an integrated solution of online service offerings that includes information about space available for-lease, comparable sales information, information about properties for-sale, tenant information, internet marketing services, risk management tools, analytical capabilities, information for clients’ websites, information about industry professionals and their business relationships, data [removed: integration] [added: integration,] and industry news.

We strive to cross-sell our services to our customers [removed: in order] to best suit their needs.

We [removed: manage and report our business geographically] [added: operate] in two [removed: operating segments, with our primary areas of measurement and decision-making being] [added: reportable segments which are] North America, which includes the U.S. and Canada, and International, which primarily includes Europe, [removed: Asia-Pacific] [added: Asia-Pacific,] and Latin America.

[removed: Information about our revenues, long-lived assets] [added: Revenues, significant expenses, EBITDA,] and total assets [removed: derived from] and [removed: located in foreign countries is included] [added: liabilities for each of our segments are set forth] in Notes 2, [removed: 3] [added: 3,] and 14 of the Notes to the Consolidated Financial Statements included in Part IV of this Report.

We have spent more than 35 years building and acquiring databases of [removed: commercial] real estate information, which includes information on [added: homes, school, communities, commercial] properties, leasing, sales, comparable sales, [removed: tenants] [added: tenants,] and demand statistics, as well as digital images, drone [removed: videos] [added: videos,] and 3-D [removed: tours.][added: tours, plat maps, and floor plans.]

This highly complex database is comprised of hundreds of data fields, tracking such categories as location, site and zoning information, building characteristics, space and unit characteristics and availability, tax assessments, true ownership, sales and lease comparables, [removed: multi-family] [added: residential] rents, vacancies and concessions, space requirements, retail locations, mortgage and deed information, for-sale and for-lease listings, fund data, income and expense histories, tenant names, tenant credit scores, view of company locations, lease expirations, contact information, historical trends, [removed: forecasts] [added: forecasts,] and demographic information.

Our researchers collect and analyze commercial real estate information through phone calls, [removed: e-mails] [added: e-mails,] and additional research methods including field inspections, public records review, news monitoring, third-party data [removed: feeds] [added: feeds,] and user entered content.

Our researchers are responsible for maintaining the accuracy and reliability of our database information, training our clients to use CoStar Group [removed: products] [added: products,] and handling their customer service questions, creating a [removed: "one touch"] [added: "one-touch"] approach to customer care.

Because of the importance commercial real estate professionals place on our data and our prominent position in the industry, [added: many of these professionals routinely take the initiative and proactively report available space and transactions through our online tool, which we refer to as our Marketing Center, or directly to our researchers.]

Our field research efforts include physical inspections of properties [removed: in order] to research new availabilities, find additional property inventory, identify new construction, collect tenant information, verify existing information, photograph [removed: properties] [added: properties,] and create high quality videos of interior spaces (including walk-through videos and 3-D virtual tours), [removed: amenities] [added: amenities,] and exterior features of properties.

A typical site inspection of a commercial property consists of photographing the building, capturing interior images, [removed: videos] [added: videos,] and 3-D tours, measuring the building, geo-coding the building, capturing “for-sale” or “for-lease” sign information, counting parking spaces, assessing property condition and [removed: construction] [added: construction,] and gathering tenant information.

We are leveraging our capabilities developed from our extensive commercial real estate research efforts to produce original, media rich content of neighborhoods, schools, [removed: parks] [added: parks,] and condominium buildings' [removed: amenities] [added: amenities,] and common areas for our residential products using professional photographers and a fleet of drones to conduct aerial research of residential real estate.

Licensing agreements with these entities allow us to use a variety of commercial real estate information, including property ownership, tenant information, demographic information, maps, aerial [removed: photographs] [added: photographs,] and 3-D virtual apartment tours of apartment communities, all of which enhance our services.

These license agreements generally grant us a non-exclusive license to use the data and images in the creation and supplementation of our [added: online marketplaces,] information, [removed: analytics] and [removed: online marketplaces.][added: analytics.]

[removed: Over time, we] [added: We] have [removed: enhanced and expanded,] [added: expanded] and [removed: we expect to] continue to [removed: enhance] [added: expand the coverage] and [removed: expand,] [added: depth of] our [removed: existing information, analytics and] online marketplace [removed: services.][added: services, information, and analytics.]

Our principal [removed: information,] [added: online commercial real estate information and] analytics [added: services] and online [removed: marketplace services are described in the following paragraphs:][added: marketplaces are:]

[removed: - *Properties* provides] [added: *•Properties* Provides] a comprehensive inventory of [added: various property types, including] office, industrial, retail, multifamily, [removed: hospitality and] [added: hospitality,] student [removed: housing properties] [added: housing,] and land.

[removed: We also provide] [added: It includes] for-lease and for-sale listings, historical data, property analytics, building photographs, demographics, [removed: maps] [added: maps,] and floor plans.

[removed: *•Sales* is a robust] [added: - *Sales* A] database of commercial real estate sales [removed: transactions and is designed] [added: transactions, useful] for [removed: professionals who need to research] [added: researching] property comparables, [removed: identify] [added: identifying] market trends, [removed: expedite the appraisal process] [added: expediting appraisals,] and [removed: support] [added: supporting] property valuations.

We provide real estate and lease management technology solutions, including lease administration, lease [removed: accounting] [added: accounting,] and abstraction services, through our CoStar Real Estate Manager service [removed: offerings, as well as portfolio] and [removed: debt analysis, management and reporting capabilities through our CoStar Risk Analytics service offerings.][added: the Visual Lease Acquisition.]

We provide information services internationally, through our Business Immo, [removed: Belbex] [added: Belbex,] and Thomas Daily [removed: businesses] [added: brands] in France, [removed: Spain] [added: Spain,] and Germany, respectively.

Apartments.com, the flagship brand of our network of apartment marketing sites, provides a variety of [added: subscription-based] ad packages and enhancements that allow property managers and owners to [removed: fully] showcase their apartment community through increased exposure and interactions that allow renters to view, [removed: engage] [added: engage,] and connect with the community.

Apartments.com also provides tools to facilitate the rental process, including online tenant applications with background and credit [removed: checks] [added: checks,] and rental payment processing.

[removed: Our] Homes.com [removed: Network] and the acquisition of OnTheMarket have enabled us to expand our offerings to the residential for sale market.

[added: -] *Ten-X* [removed: operates] [added: is] an online auction platform for commercial real estate.

The platform allows brokers and sellers to onboard assets, evaluate the results of complimentary marketing [removed: campaigns] [added: campaigns,] and follow up on pre-qualified leads.

[removed: Sellers pay] [added: - Land.com is] a [removed: fee] [added: marketplace for rural land sales, where sellers pay] to list their land [removed: for-sale,] and [removed: interested] buyers can search [removed: the respective sites'] listings.

[removed: Business sellers] [added: Sellers] pay [removed: a fee] to list their [removed: operating businesses for-sale,] [added: businesses,] and [removed: interested] buyers can search [removed: the respective sites'] listings for free.

Depending on the type of service, contract rates are generally based on the number of sites, number of users, organization size, the client's business focus, the client's geographic location, the number and types of services to which a client subscribes, the number of properties a client [removed: advertises] [added: advertises,] and the prominence and placement of a client's advertised properties in the search results.

Our [removed: overall] sales strategy [removed: is to provide] [added: focuses on] optimal service [removed: to our] [added: for] existing customers, [removed: attract] [added: attracting] new [removed: clients] [added: clients,] and [removed: cross-sell the numerous solutions we offer.][added: cross-selling our solutions.]

Our sales [removed: teams sell multiple products and are] [added: teams,] primarily located in field [removed: sales] offices [removed: throughout] [added: across] the U.S., [removed: with others in] Canada, the U.K., Spain, [removed: France] [added: France,] and [removed: Germany.][added: Germany, sell multiple products.]

CoStar Group is a global leader of commercial and residential real estate information, analytics, and online marketplaces.

Our mission is to digitize the world's real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives.

Our major brands include CoStar, a leading global provider of commercial real estate data, analytics and news; Apartments.com, a leading platform for apartment rentals, based on total revenue; LoopNet, the most trafficked commercial real estate marketplace; and Homes.com, the fastest-growing residential real estate marketplace, based on traffic.

CoStar Group’s industry-leading brands include STR, a global leader in hospitality data and benchmarking, Ten-X, an online platform for commercial real estate auctions and negotiated bids and OnTheMarket, a leading residential property portal in the U.K.

We have also set up direct feeds from larger apartment sites, owners, and brokers.

CoStar offers a subscription-based platform for commercial real estate intelligence with several key features:

Users can identify available space, evaluate opportunities, value assets, and analyze market conditions.

- *Leasing* Offers data on lease transactions and tools to manage user-entered lease data.

Subscribers can analyze lease datasets and perform cash flow analysis from both landlord and tenant perspectives.

- *Tenants* Provides detailed tenant information, including lease expirations, occupancy levels, and growth rates, allowing users to target prospective clients.

- *Owners* Provides detailed portfolio information, including lease expirations, occupancy levels, and growth rates, allowing users to target prospective clients.

- *Markets* Enables viewing and reporting on market and submarket trends, including leasing, vacancy, rental rates, construction, investment sales, and economic conditions.

It covers all major real estate sectors and provides forecasts.

- *Benchmarking* Provides hospitality benchmarking, allowing hotels to measure performance against competitors based on occupancy, ADR, and RevPAR.

- *Lender* Tools for lenders to manage loan portfolios and risk, including portfolio surveillance, concentration risk monitoring, stress testing, and expected credit loss modeling.

LoopNet.com, the flagship brand of our network of commercial property marketing sites, is a top commercial real estate marketing site where property owners, landlords, and brokers can advertise properties for sale or lease on a site that supplements their listing with CoStar Group's database of property information and content.

Users can also access industry news from LoopNet’s editorial team as they search for properties.

LoopNet offers a variety of subscription-based ad packages and enhancements.

LoopNet Silver is designed for real estate professionals seeking maximum exposure and advanced marketing tools and markets listings to all LoopNet.com visitors.

LoopNet Gold, Platinum, and Diamond Ads provide additional exposure on the LoopNet Network and retargeting across the web.

We provide commercial real estate marketing sites internationally through the following brands LoopNet.co.uk in the U.K., BureauxLocaux in France, and Belbex.com in Spain.

In February 2024, we began selling Homes.com memberships, which are subscription-based advertising services promoting an agent's profile and listings on our website.

- BizBuySell is a marketplace for operating businesses and franchises for sale.

Our revenue streams are highly diversified.

We are not presently, and we do not anticipate becoming dependent upon one or a few customers.

Local offices support field sales and research, providing clients with a local presence.

Field sales teams handle customer service, client satisfaction, and relationship building.

Digital and direct marketing, including SEO, paid advertising, social media, and display advertising, help us find prospective clients.

Service demonstrations are our most effective sales method.

We sponsor and attend industry events to reinforce relationships with core user groups.

For Apartments.com and Homes.com, we use multi-channel marketing campaigns, including TV, radio, online ads, social media, email, public relations, and SEO.

Our IT professionals develop and enhance services for customers, maintain existing services, integrate current offerings, secure our real estate data, and provide research automation tools to improve data quality and research efficiency.

They are responsible for our online marketplace services, analytics, and infrastructure, implementing technologies to increase research capacity and data quality.

Additionally, fraud-detection and adaptive authentication technologies have been implemented to prevent unauthorized access.

Our IT team also maintains servers and network components, ensuring uninterrupted service from multiple data centers and cloud platforms, with continuous monitoring for fast, reliable access and security.

Segments

Our chief executive officer, who acts as the CODM, makes operating decisions and evaluates operating performance on the basis of our business geographically.

Our business depends on our ability to successfully provide real estate industry professionals and consumers with comprehensive, timely, and standardized information and arm them with the right tools to use, analyze, and transact in the information.

The market for real estate-focused online marketplaces, information, and analytics generally is competitive, dynamic, and is constantly evolving as a result of technological advancements, customer preferences, and new products and offerings.

As a result of our unique combination of products and services, we find that we compete with a variety of companies that provide online real estate-focused marketplace and internet listing services, publish and distribute information, benchmarks and analytics, and provide marketing, real estate portfolio and lease management and administrative software solutions.

Our service offerings span all commercial property types, including office, retail, industrial, multifamily, land, mixed-use and hospitality.

Through our Homes.com Network and our acquisition of OnTheMarket, we also offer online platforms that manage workflow and marketing for residential real estate agents and brokers and provide portals for homebuyers to view residential property listings.

The market for real estate information and analysis is vast, based on the variety, volume and value of transactions related to real estate.

Each transaction has multiple participants and multiple information requirements, and in order to facilitate transactions, industry participants must have extensive, accurate and current information and analysis.

Members of the real estate and related business community require daily access to current data such as space availability, properties for-sale, rental units available, rental rates, vacancy rates, tenant movements, comparable sales, supply, new construction, absorption rates and other important market developments to carry out their businesses effectively.

Market research (including historical and forecast conditions) and applied analytics are instrumental to the success of industry participants.

There is a strong need for an efficient marketplace, where real estate professionals can exchange information, evaluate opportunities using standardized data and interpretive analyses and interact with each other on a continuous basis.

The commercial real estate and related business community historically operated in an inefficient marketplace because of the fragmented approach to gathering and exchanging information within the marketplace.

Various organizations, including hundreds of brokerage firms, directory publishers and local research companies, collected data on specific markets and developed software to analyze the information they independently gathered.

This highly fragmented methodology resulted in duplication of efforts in the collection and analysis of information, excessive internal cost and the creation of non-standardized data containing varying degrees of accuracy and comprehensiveness, resulting in a formidable information gap.

The creation and maintenance of a standardized information platform for commercial real estate requires infrastructure including a standardized database, accurate and comprehensive research capabilities, experienced analysts, easy-to-use technology and intensive participant interaction.

By combining our extensive database, researchers, our experienced team of analysts and economists, technological expertise and broad customer base, we believe that we have created such a platform.

The apartment rental advertising industry serves property managers and owners who are tasked with finding renters to occupy vacant apartments, as well as renters who are searching for their next home.

Property managers have several options at their disposal, including their own websites, drive-by and outdoor advertising, traditional classified ads, free online listing services, search engine marketing and ILS, like Apartments.com and the network of apartment listing websites we own and operate.

Many apartment ILS websites feature only the rental availabilities that larger property owners pay to advertise, resulting in a poor user experience in which the renter’s search criteria return either limited or no results, irrelevant results or stale results that do not represent actual availabilities.

We believe that consumers expect accurate, actionable and comprehensive apartment rental information.

Our apartment ILS websites include renter-focused features like the ability to filter search results according to various criteria (e.g., commute time to work); professional images of the properties, including immersive videos and 3-D interactive models; custom neighborhood profiles; and tenant reviews.

Our network of apartment listing websites draws on our multifamily database and includes researched and verified information.

We proactively gather information on available rentals to improve the accuracy of the listings on our apartment ILS websites, including real time unit-level availability, current pricing and rent specials.

We have continually invested in our network to improve the features and services offered to property managers and website users.

Recent additions include: dynamic lead forms that provide more information about prospective residents, making rent trends information publicly available, free digital ad retargeting and integrated online rental solutions, including lease applications with tenant credit and background checks.

We believe that we have created and maintain easily searchable apartment ILS websites with a comprehensive selection of rentals, information on actual rental availabilities and rents and in-depth data on neighborhoods, as well as easy to use and actionable tools for the rental process.

We believe that consumers expect accurate, actionable and comprehensive homes-for-sale information on a platform that allows collaboration between homebuyers and agents.

Our residential websites include homebuyer-focused features like the ability to filter search results according to various criteria (e.g., home features, view and lot type), review rankings of nearby schools and tools to educate consumers on the home buying process.

We plan to develop original, media-rich content of neighborhoods, schools, parks and condominium buildings' amenities and common areas to supplement information in agent listings.

We are designing tools to facilitate collaboration between homebuyers and agents.

Our database has been developed and enhanced for more than 35 years by a research department that makes daily database updates.

Revenues, EBITDA and total assets and liabilities for each of our segments are set forth in Notes 3 and 14 of the Notes to the Consolidated Financial Statements, included in Part IV of this Report.

CoStar’s Comprehensive Database

The database also includes building photographs, aerial photographs and videos, 3-D virtual tours, plat maps and floor plans.

We have also set up direct feeds from larger apartment sites, owners and brokers, and have put in place an automated system that compiles information sourced from the internet in order to provide the most up-to-date information.

many of these professionals routinely take the initiative and proactively report available space and transactions through our online tool, which we refer to as our Marketing Center, or directly to our researchers.

Our field researchers are equipped with high resolution digital cameras and handheld laser instruments to precisely measure buildings and geo-code and position them on digital maps.

Our U.S. drone operators are Federal Aviation Administration certified and trained to capture aerial photographs and videos.

Our drone operators in the U.K. and Canada are certified and trained to Civil Aviation Authority and Transport Canada standards, respectively, with a permission for commercial operations pending.

*Management and Quality Control Systems.* Our research processes include automated and non-automated controls to ensure the integrity of the data collection process.

A large number of automated data quality tests check for potential errors, including occupancy date conflicts, available square footage greater than building area, typical floor space greater than building area and expired leases.

We also monitor changes to critical fields of information to ensure all information is kept in compliance with our standard definitions and methodology.

Our non-automated quality control procedures include:

- Calling our information sources on recently updated properties to re-verify information;

Currently, and from time to time, we are involved in litigation incidental to the conduct of our business, including, among others, the legal actions discussed under “Contingencies” in Note 13 “Commitments and Contingencies” of the Notes to our Consolidated Financial [removed: Statements.][added: Statements included in Part IV of this Report.]

While our management presently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our business, financial position, future results of [removed: operations] [added: operations,] or liquidity, legal proceedings are inherently uncertain, and unfavorable rulings could, individually or in the aggregate, have a material adverse effect on our business, financial position, future results of [removed: operations] [added: operations,] or liquidity.

| [removed: ☒] [added: ☒] | | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |

For the fiscal year ended December 31, [removed: 2023][added: 2024]

[removed: ][added: ]

| Large accelerated filer | | | x | | | Accelerated filer | | | [removed: o] [added: ☐] | | |

| Non-accelerated filer | | | [removed: o] [added: ☐] | | | Smaller reporting company | | | ☐ | | |

As of June 30, [removed: 2023,] [added: 2024,] 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 [removed: $36.0] [added: $30.1] billion.

As of February [removed: 16, 2024, 408,409,321] [added: 13, 2025, 410,125,610] shares of common stock were outstanding.

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, [removed: 2023] [added: 2024] are incorporated by reference into Part III of this Report.

| | | | [Glossary of [removed: Terms](#i3d5fa50fac5a487ea89498a470016300_13)] [added: Terms](#i41275714db3541c8a24982c2435763d8_13)] | | | [removed: [4](#i3d5fa50fac5a487ea89498a470016300_13)] [added: [4](#i41275714db3541c8a24982c2435763d8_13)] | | |

| Item 1. | | | [removed: [Business](#i3d5fa50fac5a487ea89498a470016300_19)] [added: [Business](#i41275714db3541c8a24982c2435763d8_19)] | | | [removed: [7](#i3d5fa50fac5a487ea89498a470016300_19)] [added: [8](#i41275714db3541c8a24982c2435763d8_19)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i3d5fa50fac5a487ea89498a470016300_22)] [added: Factors](#i41275714db3541c8a24982c2435763d8_22)] | | | [removed: [20](#i3d5fa50fac5a487ea89498a470016300_22)] [added: [16](#i41275714db3541c8a24982c2435763d8_22)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i3d5fa50fac5a487ea89498a470016300_25)] [added: Comments](#i41275714db3541c8a24982c2435763d8_25)] | | | [removed: [32](#i3d5fa50fac5a487ea89498a470016300_25)] [added: [31](#i41275714db3541c8a24982c2435763d8_25)] | | |

| Item 2. | | | [removed: [Properties](#i3d5fa50fac5a487ea89498a470016300_28)] [added: [Properties](#i41275714db3541c8a24982c2435763d8_31)] | | | [removed: [34](#i3d5fa50fac5a487ea89498a470016300_28)] [added: [33](#i41275714db3541c8a24982c2435763d8_31)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i3d5fa50fac5a487ea89498a470016300_31)] [added: Proceedings](#i41275714db3541c8a24982c2435763d8_34)] | | | [removed: [34](#i3d5fa50fac5a487ea89498a470016300_31)] [added: [33](#i41275714db3541c8a24982c2435763d8_34)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i3d5fa50fac5a487ea89498a470016300_34)] [added: Disclosures](#i41275714db3541c8a24982c2435763d8_37)] | | | [removed: [34](#i3d5fa50fac5a487ea89498a470016300_34)] [added: [33](#i41275714db3541c8a24982c2435763d8_37)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i3d5fa50fac5a487ea89498a470016300_40)] [added: Securities](#i41275714db3541c8a24982c2435763d8_43)] | | | [removed: [35](#i3d5fa50fac5a487ea89498a470016300_40)] [added: [33](#i41275714db3541c8a24982c2435763d8_43)] | | |

| Item 6. | | | [removed: [Reserved](#i3d5fa50fac5a487ea89498a470016300_43)] [added: [Reserved](#i41275714db3541c8a24982c2435763d8_46)] | | | [removed: [37](#i3d5fa50fac5a487ea89498a470016300_43)] [added: [35](#i41275714db3541c8a24982c2435763d8_46)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i3d5fa50fac5a487ea89498a470016300_46)] [added: Operations](#i41275714db3541c8a24982c2435763d8_49)] | | | [removed: [38](#i3d5fa50fac5a487ea89498a470016300_46)] [added: [35](#i41275714db3541c8a24982c2435763d8_49)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#i3d5fa50fac5a487ea89498a470016300_73)] [added: Risk](#i41275714db3541c8a24982c2435763d8_85)] | | | [removed: [49](#i3d5fa50fac5a487ea89498a470016300_73)] [added: [47](#i41275714db3541c8a24982c2435763d8_85)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i3d5fa50fac5a487ea89498a470016300_76)] [added: Data](#i41275714db3541c8a24982c2435763d8_88)] | | | [removed: [51](#i3d5fa50fac5a487ea89498a470016300_76)] [added: [48](#i41275714db3541c8a24982c2435763d8_88)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i3d5fa50fac5a487ea89498a470016300_79)] [added: Disclosure](#i41275714db3541c8a24982c2435763d8_91)] | | | [removed: [51](#i3d5fa50fac5a487ea89498a470016300_79)] [added: [48](#i41275714db3541c8a24982c2435763d8_91)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i3d5fa50fac5a487ea89498a470016300_82)] [added: Procedures](#i41275714db3541c8a24982c2435763d8_94)] | | | [removed: [51](#i3d5fa50fac5a487ea89498a470016300_82)] [added: [48](#i41275714db3541c8a24982c2435763d8_94)] | | |

| Item 9B. | | | [Other [removed: Information](#i3d5fa50fac5a487ea89498a470016300_85)] [added: Information](#i41275714db3541c8a24982c2435763d8_97)] | | | [removed: [52](#i3d5fa50fac5a487ea89498a470016300_85)] [added: [49](#i41275714db3541c8a24982c2435763d8_97)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i3d5fa50fac5a487ea89498a470016300_88)] [added: Inspections](#i41275714db3541c8a24982c2435763d8_100)] | | | [removed: [52](#i3d5fa50fac5a487ea89498a470016300_85)] [added: [49](#i41275714db3541c8a24982c2435763d8_97)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i3d5fa50fac5a487ea89498a470016300_94)] [added: Governance](#i41275714db3541c8a24982c2435763d8_106)] | | | [removed: [52](#i3d5fa50fac5a487ea89498a470016300_94)] [added: [50](#i41275714db3541c8a24982c2435763d8_106)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i3d5fa50fac5a487ea89498a470016300_97)] [added: Compensation](#i41275714db3541c8a24982c2435763d8_109)] | | | [removed: [52](#i3d5fa50fac5a487ea89498a470016300_97)] [added: [50](#i41275714db3541c8a24982c2435763d8_109)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i3d5fa50fac5a487ea89498a470016300_100)] [added: Matters](#i41275714db3541c8a24982c2435763d8_112)] | | | [removed: [52](#i3d5fa50fac5a487ea89498a470016300_100)] [added: [50](#i41275714db3541c8a24982c2435763d8_112)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i3d5fa50fac5a487ea89498a470016300_103)] [added: Independence](#i41275714db3541c8a24982c2435763d8_115)] | | | [removed: [52](#i3d5fa50fac5a487ea89498a470016300_103)] [added: [50](#i41275714db3541c8a24982c2435763d8_115)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i3d5fa50fac5a487ea89498a470016300_106)] [added: Services](#i41275714db3541c8a24982c2435763d8_118)] | | | [removed: [52](#i3d5fa50fac5a487ea89498a470016300_106)] [added: [50](#i41275714db3541c8a24982c2435763d8_118)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i3d5fa50fac5a487ea89498a470016300_112)] [added: Schedules](#i41275714db3541c8a24982c2435763d8_124)] | | | [removed: [53](#i3d5fa50fac5a487ea89498a470016300_112)] [added: [51](#i41275714db3541c8a24982c2435763d8_124)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i3d5fa50fac5a487ea89498a470016300_115)] [added: Summary](#i41275714db3541c8a24982c2435763d8_127)] | | | [removed: [56](#i3d5fa50fac5a487ea89498a470016300_115)] [added: [53](#i41275714db3541c8a24982c2435763d8_127)] | | |

| | | | [Index to Consolidated Financial [removed: Statements](#i3d5fa50fac5a487ea89498a470016300_121)] [added: Statements](#i41275714db3541c8a24982c2435763d8_133)] | | | [removed: [F-](#i3d5fa50fac5a487ea89498a470016300_121)[1](#i3d5fa50fac5a487ea89498a470016300_121)] [added: [F-](#i41275714db3541c8a24982c2435763d8_133)[1](#i41275714db3541c8a24982c2435763d8_133)] | | |

| 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, [removed: 2023.] [added: 2023 and was replaced by the 2024 Credit Agreement in May 2024] | | |

| Apartments.com Network | | | Apartments.com, the flagship brand of our network of apartment marketing sites, and its network of rental websites [added: including ApartmentFinder, ForRent.com®, AFTER55.com®, CorporateHousing.comTM and ForRentUniversity.com® ApartmentHomeLiving.com, Apartamentos.comTM, WestsideRentals.com®, and Off Campus Partners] | | |

| Business Immo | | | The legal [removed: entity] [added: 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 | | |

| CoStar Group [added: (also the “Company,” “we,” “us” or “our”)] | | | 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 | | |

| Covenant Suspension Period | | | A period of time defined in the [removed: 2020] [added: 2024] 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 | | |

| CRI | | | [added: The legal entity,] CoStar Realty Information, Inc., a Delaware corporation and wholly owned subsidiary of CoStar Group, Inc. | | |

| [removed: Halo] Merger Sub [added: I] | | | [removed: Snapped Halo] [added: Matrix] Merger [removed: Sub Corp.,] [added: Sub, Inc.,] a Delaware corporation and wholly owned subsidiary of [removed: CoStar Realty Information, Inc.] [added: the Company] | | |

| Homes.com [removed: Network] | | | [removed: Homes.com, the] [added: The] flagship brand of our North American [removed: network of online platforms that manage] [added: residential products and a homes for-sale listings site, which manages] workflow and marketing for residential real estate agents and brokers and [removed: provide portals for] [added: allows] homebuyers to view residential property [removed: listings] [added: listings, research communities, and connect with real estate agents and brokers] | | |

| 1201 Wilson Blvd | | | | | | | | |

| Arlington | | | VA | | | 22209 | | |

| Item 1C. | | | [Cybersecurity](#i41275714db3541c8a24982c2435763d8_28) | | | [31](#i41275714db3541c8a24982c2435763d8_28) | | |

| | | | [Signatures](#i41275714db3541c8a24982c2435763d8_130) | | | [54](#i41275714db3541c8a24982c2435763d8_130) | | |

| 2024 Credit Agreement | | | The credit agreement the Company entered into on May 24, 2024 that replaced the 2020 Credit Agreement | | |

| AI | | | Artificial intelligence | | |

| CoStar Group Share | | | A share of the common stock of the Company, par value $0.01 per share | | |

| Exchange Act | | | The Securities Exchange Act of 1934, as amended | | |

| Matterport | | | Matterport, Inc., a Delaware corporation and provider of a technology platform that uses spatial data to transform physical buildings and spaces into dimensionally-accurate digital images | | |

| Matterport Common Stock | | | Matterport Class A common stock, par value $0.0001 per share | | |

| Matterport Merger Agreement | | | The Agreement and Plan of Merger dated as of April 21, 2024, by and among the Company, Matterport, Merger Sub I, and Merger Sub II, pursuant to which, among other things, and subject to its terms, (i) Merger Sub I will merge with and into Matterport (the “First Merger”), with Matterport surviving the First Merger as a wholly owned subsidiary of the Company (the “Surviving Corporation”), and (ii) in the event that the Threshold Percentage (as defined in the Matterport Merger Agreement) is at least 40%, immediately following the First Merger and as part of a single integrated transaction, the Surviving Corporation will merge with and into Merger Sub II (the “Second Merger” and, together with the First Merger, the “Mergers”), with Merger Sub II surviving the Second Merger as a wholly owned subsidiary of the Company. | | |

| Merger Exchange Ratio | | | A ratio determined based on the average of the volume-weighted average prices at which the CoStar Group Shares trade on Nasdaq Global Select Market for the 20 consecutive Trading Days (as defined in the Merger Agreement) ending on (and including) the Trading Day that is three Trading Days prior to the date of the First Effective Time (the “Average CoStar Group Share Price”) and shall be subject to a symmetrical collar, applied as follows: (i) if the Average CoStar Group Share Price is greater than or equal to $94.62 (the “Ceiling Price”), then the Merger Exchange Ratio shall be set at 0.02906; (ii) if the Average CoStar Group Share Price is less than or equal to $77.42 (the “Floor Price”), then the Merger Exchange Ratio shall be set at 0.03552; or (iii) if the Average CoStar Group Share Price is greater than the Floor Price and less than the Ceiling Price, then the Merger Exchange Ratio shall be equal to the quotient of (x) $2.75 divided by (y) the Average CoStar Group Share Price | | |

| Merger Sub II | | | Matrix Merger Sub II LLC, a Delaware limited liability company and wholly owned subsidiary of the Company | | |

| Neptune Merger Sub | | | Neptune V Merger Sub LLC, as Delaware limited liability company and a wholly owned subsidiary of CRI | | |

| SaaS | | | Software as a service | | |

| Stock Repurchase Program | | | The stock repurchase program the Board approved in February 2025 that authorizes the repurchase of up to $500 million of shares of the Company's common stock | | |

| --- | --- | --- | --- | --- | --- |

| Abbreviation or Acronym | | | Definition | | |

| Visual Lease | | | The legal entity Visual Lease, LLC, a Delaware limited liability company and operator of Visual Lease, a SaaS platform for integrated lease management and lease accounting | | |

| Visual Lease Acquisition | | | CoStar's acquisition of all of the outstanding equity interest in Visual Lease completed on November 1, 2024, pursuant to the Visual Lease Merger Agreement | | |

| Visual Lease Merger Agreement | | | The Agreement and Plan of Merger dated as of October 18, 2024, between CRI, Neptune Merger Sub, Visual Lease, LLC and Shareholder Representative Services LLC as the Holder Representative, pursuant to which, among other things, and subject to its terms, Neptune Merger Sub merged with and into Visual Lease with Visual Lease surviving the merger as a wholly-owned subsidiary of the CRI | | |

Forward-looking statements include information that is not purely historic fact.

- the risks related to the specific timing, price and size of repurchases under the Stock Repurchase Program, including that the Stock Repurchase Program may be suspended or discontinued at any time at the Company’s discretion;

- our inability to complete certain strategic transactions if a proposed transaction is subject to review or approval by regulatory authorities pursuant to applicable laws or regulations;

- our inability to complete the acquisition of Matterport or otherwise realize the benefits of the pending Matterport acquisition;

- the significant costs associated with undertaking a large infrastructure project;

- our inability to obtain and maintain stable data feeds, or disruption of our data feeds;

- the effects of use of new and evolving technologies, including artificial intelligence (“AI”), on our ability to protect our data and intellectual property from misappropriation by third parties;

Additionally, certain information disclosed herein or elsewhere (such as our website) is informed by various stakeholder expectations and third-party frameworks.

Such information is not necessarily material for purposes of our SEC reporting, even if we use “material” or similar language.

Particularly in the ESG context, materiality is subject to various definitions that differ from, and are often more expansive than, the definition under U.S. federal securities laws.

| | | | | | | | | |

| 1331 L Street, NW | | | | | | | | |

| Washington, | | | DC | | | 20005 | | |

| Item 1C | | | [C](#i3d5fa50fac5a487ea89498a470016300_2202)[ybersecurity](#i3d5fa50fac5a487ea89498a470016300_2202) | | | [33](#i3d5fa50fac5a487ea89498a470016300_2202) | | |

| | | | [Signatures](#i3d5fa50fac5a487ea89498a470016300_118) | | | [57](#i3d5fa50fac5a487ea89498a470016300_118) | | |

| ARS | | | Auction rate securities | | |

| 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 | | |

| CMBS | | | Commercial mortgage-based securities | | |

| CPA | | | Colorado Privacy Act | | |

| CPRA | | | The California Privacy Rights Act | | |

| E.U. | | | European Union | | |

| Homes.com | | | A homes-for-sale listings site | | |

| Homes Group | | | The legal entity Homes Group, LLC | | |

| 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 | | |

| 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 | | |

| 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 | | |

| UCPA | | | Utah Consumer Privacy Act | | |

| VCDPA | | | Virginia Consumer Data Protection Act | | |

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.

- competition;

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

- 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;

- the effects of Brexit;

Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting [removed: channels] [added: channels,] and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

a.Internal and external asset identification, assessment, [removed: monitoring] [added: monitoring,] and classification procedures to evaluate cybersecurity risks and inform mitigation [removed: efforts.][added: efforts;]

See *Risk Factors – “Cyberattacks and security vulnerabilities could result in [removed: serious] [added: material] harm to our reputation, [removed: business] [added: business,] and financial condition.”* and *“Technical problems or disruptions that affect either our customers’ ability to access our services, or the software, internal applications, [removed: database] [added: database,] and network systems underlying our services, could damage our reputation and lead to reduced demand for our [removed: information, analytics and] online marketplace services, [added: information, and analytics,] lower revenues and [removed: increased] [added: increase] costs.”*

Our Audit Committee receives reports from [removed: management] [added: the CTO] on our cybersecurity risks.

In addition, [removed: management] [added: the CTO] updates the Audit Committee, as necessary, regarding any significant cybersecurity incidents.

Our management team is informed and monitors the prevention, detection, [removed: mitigation] [added: mitigation,] and remediation of cybersecurity threats.

[removed: Our] [added: Additionally, our] management team’s experience includes industry-recognized certifications, such as CISSP, CISM, and CISA, decades of experience as part of our IT team, and previous cybersecurity leadership positions at various Fortune 500 companies and U.S. Defense contractors.

[removed: Our management team is] [added: The CTO and VPCS are] informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, [removed: public] [added: public,] or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.

Our Chief Technology Officer (CTO) is responsible for oversight of our cybersecurity risk management program.

Our Vice President of Cyber Security (VPCS), who reports up to the CTO, is responsible for day-to-day assessment and management of cybersecurity risk.

Our CTO has over 25 years of information technology experience, including leadership experience managing global product development, information security, IT infrastructure and engineering.

He holds a M.S. in information systems from George Washington University and a B.A. in computer science from State University of New York.

The VPCS has over 20 years of information security and technology experience, including 10 years in senior leadership roles in service provider, enterprise, and military environments.

He holds an MBA from Georgetown University, a M.S. in information systems from Virginia Tech University, and a B.S. in computer information technology from Purdue University.

[removed: This facility is] [added: These facilities are] used by our International operating segment, including our recent acquisition, OnTheMarket.

Our staff in Richmond, Virginia [removed: occupy] [added: is located in] an owned building [removed: located] at 501 S 5th Street, where we occupy approximately 310,000 square feet, an owned building located at 901 Semmes Avenue, where we [removed: own and] occupy approximately 117,000 square feet; and leased space at 951 E Byrd St., where we occupy approximately [removed: 97,000] [added: 135,000] square feet.

These locations [added: primarily] house research, product [removed: development] [added: development,] and sales functions.

We also operate certain of our research, [removed: development] [added: development,] and sales functions out of additional leased office spaces in Irvine, California; San Diego, California; and Atlanta, Georgia.

These locations include, among others, the following: [removed: Hendersonville,] [added: Nashville,] Tennessee; Norfolk, Virginia; Boston, Massachusetts; New York, New York; San Francisco, California; and Los Angeles, California.

As of January 21, 2025, we have relocated our headquarters to our owned building at 1201 Wilson Blvd in Arlington, Virginia, occupying approximately 160,000 square feet.

We exited our previous headquarters located at 1331 L Street, NW, in downtown Washington, D.C., with a lease that expires on May 31, 2025.

As part of a workforce consolidation, we signed a lease for a total of approximately 52,000 square feet in London and have begun relocating employees to the new building.

Our headquarters is located at 1331 L Street, NW, in downtown Washington, DC, where we occupy approximately 169,000 square feet of office space, with a lease that expires on May 31, 2025 (with two five-year renewal options).

Our common stock is traded on the Nasdaq Global Select Market under the symbol “CSGP.” As of January 31, [removed: 2024,] [added: 2025,] there were [removed: 1,654] [added: 1,582] holders of record of our common stock.

We do not anticipate paying any dividends on our common stock during the foreseeable future, but intend to [removed: retain any earnings for] [added: invest our] future [removed: growth of] [added: earnings, if any, to finance] our [removed: business.][added: growth or share repurchases.]

We did not issue any unregistered securities during the year ended December 31, [removed: 2023.][added: 2024.]

The following table is a summary of our repurchases of common stock for the quarter ended December 31, [removed: 2023:][added: 2024:]

| [removed: 2023] [added: 2024] | | | | | | Total Number [removed: of Shares Purchased(1)] [added: of Shares Purchased(1)] | | | | | | Average Price Paid per Share | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | | | | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | | |

- An equal investment in the S&P 500 [removed: Index; and][added: Index,]

- An equal investment in the S&P 500 Internet Services & Infrastructure [removed: Index.][added: Index, and]

The comparison covers the period beginning December 31, [removed: 2018] [added: 2019] and ending on December 31, [removed: 2023,] [added: 2024,] and assumes the reinvestment of any dividends.

[removed: ![2023] [added: ![2024] Stock [removed: Chart.jpg](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-20231231_g2.jpg)][added: Chart.jpg](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-20241231_g2.jpg)]

| Company / Index | | | | | | [removed: 12/31/18] [added: 12/31/19] | | | | | | [removed: 12/31/19] [added: 12/31/20] | | | | | | [removed: 12/31/20] [added: 12/31/21] | | | | | | [removed: 12/31/21] [added: 12/31/22] | | | | | | [removed: 12/31/22] [added: 12/31/23] | | | | | | [removed: 12/31/23] [added: 12/31/24] | | |

| October 1 through 31 | | | | | | 1,008 | | | | | | $ | 75.44 | | | | | — | | | | | | — | | |

| November 1 through 30 | | | | | | 556 | | | | | | $ | 73.92 | | | | | — | | | | | | — | | |

| December 1 through 31 | | | | | | 6,587 | | | | | | $ | 76.90 | | | | | — | | | | | | — | | |

| Total | | | | | | 8,151 | | | | | | $ | 76.51 | | | | | — | | | | | | — | | |

- An equal investment in the S&P Composite 1500 Real Estate Index.

The Company decided to begin comparing the cumulative total return on its common stock with the S&P 1500 Real Estate Index, replacing the S&P 500 Internet Services & Infrastructure Index.

The Company believes the S&P 1500 Real Estate Index provides a more accurate, diverse, and useful measure to the Company’s performance.

For transitional purposes, both indices are included in the performance graph, however, only the S&P 1500 Real Estate Index will be used in future filings.

| CoStar Group, Inc. | | | | | | $ | 100.00 | | | | | $ | 154.48 | | | | | $ | 132.09 | | | | | $ | 129.17 | | | | | $ | 146.06 | | | | | $ | 119.66 | |

| S&P 500 Index | | | | | | 100.00 | | | | | | 118.40 | | | | | | 152.39 | | | | | | 124.79 | | | | | | 157.59 | | | | | | 197.02 | | |

| S&P 500 Internet Services & Infrastructure Index | | | | | | 100.00 | | | | | | 116.09 | | | | | | 133.08 | | | | | | 102.47 | | | | | | 119.55 | | | | | | 121.05 | | |

| S&P Composite 1500 Real Estate Index | | | | | | 100.00 | | | | | | 95.75 | | | | | | 137.09 | | | | | | 101.00 | | | | | | 112.65 | | | | | | 118.76 | | |

| October 1 through 31 | | | | | | 12,677 | | | | | | $ | 76.89 | | | | | — | | | | | | — | | |

| November 1 through 30 | | | | | | 14,445 | | | | | | 73.48 | | | | | | — | | | | | | — | | |

| December 1 through 31 | | | | | | 8,252 | | | | | | 88.25 | | | | | | — | | | | | | — | | |

| Total | | | | | | 35,374 | | | | | | $ | 78.15 | | | | | — | | | | | | — | | |

| CoStar Group, Inc. | | | | | | $ | 100.00 | | | | | $ | 177.36 | | | | | $ | 273.99 | | | | | $ | 234.27 | | | | | $ | 229.09 | | | | | $ | 259.06 | |

| S&P 500 Index | | | | | | 100.00 | | | | | | 131.49 | | | | | | 155.68 | | | | | | 200.37 | | | | | | 164.08 | | | | | | 207.21 | | |

| S&P 500 Internet Services & Infrastructure Index | | | | | | 100.00 | | | | | | 134.46 | | | | | | 156.09 | | | | | | 178.95 | | | | | | 137.79 | | | | | | 160.76 | | |

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the [removed: Securities] Exchange [removed: Act of 1934,] [added: Act,] as amended, is recorded, processed, [removed: summarized] [added: summarized,] and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

As of December 31, [removed: 2023,] [added: 2024,] we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the fiscal year.

Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, [removed: 2023] [added: 2024] and were operating at a reasonable assurance level.

Other than the implementation of a new financial system noted above, there have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially [removed: affect,] [added: affect] our internal control over financial reporting.

The Company’s internal control over financial reporting is supported by written policies and procedures, which (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, [removed: use] [added: use,] or disposition of the Company’s assets that could have a material effect on the financial statements.

In connection with the preparation of the Company's annual financial statements, management of the Company has undertaken an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2023] [added: 2024] based on criteria established in Internal Control – Integrated Framework (2013 framework) issued by the Committee of [added: Sponsoring Organizations of the Treadway Commission.]

Based on this assessment, management has concluded that the Company's internal control over financial reporting was effective as of December 31, [removed: 2023.][added: 2024.]

As permitted by the SEC, we have elected to exclude the internal controls of this acquisition, which has not been integrated into our existing processes and controls, from our assessment of the effectiveness of internal control over financial reporting as of December 31, [removed: 2023.][added: 2024.]

The excluded financial position of [removed: OnTheMarket] [added: Visual Lease] represented less than [removed: 1%] [added: 3%] of our total assets as of December 31, [removed: 2023,] [added: 2024,] and less than 1% of our revenues and total operating costs for the year then ended.

We will include the internal controls of [removed: OnTheMarket] [added: Visual Lease] in our assessment of the effectiveness of our internal control over financial reporting as of December 31, [removed: 2024.][added: 2025.]

In November 2024, we completed the Visual Lease Acquisition.

Sponsoring Organizations of the Treadway Commission.

In December 2023, we completed the OnTheMarket Acquisition.

Insider Trading Arrangements

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

None.

The remaining information required by this Item is incorporated by reference to our Proxy Statement for our [removed: 2024] [added: 2025] annual meeting of stockholders under the captions “Director Nominees,” “Executive Officers,” Corporate Governance Highlights,” “Board Committees,” “Insider trading arrangements and policies,” and, if applicable, “Delinquent Section 16(a) Reports.”

We have adopted an Insider Trading Compliance Policy that governs the purchase, sale, and/or other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations and NYSE listing standards.

A copy of our Insider Trading Compliance Policy is filed as Exhibit 19.1 to this Report.

The information required by this Item is incorporated by reference to our Proxy Statement for our [removed: 2024] [added: 2025] annual meeting of stockholders under the captions “Compensation Discussion and Analysis,” “Director Compensation,” “Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report.”

The information required by this Item is incorporated by reference to our Proxy Statement for our [removed: 2024] [added: 2025] annual meeting of stockholders under the captions “Equity Compensation Plan Information” and “Stock Ownership Information.”

The information required by this Item is incorporated by reference to our Proxy Statement for our [removed: 2024] [added: 2025] annual meeting of stockholders under the captions “Certain Relationships and Related Transactions” and “Corporate Governance Matters.”

The information required by this Item is incorporated by reference to our Proxy Statement for our [removed: 2024] [added: 2025] annual meeting of stockholders under the caption “Ratification of the Appointment of Independent Registered Public Accounting Firm.”

| [removed: [4.1](http://www.sec.gov/Archives/edgar/data/1057352/000095012311056513/w82657a1exv4w1.htm)] [added: [4.1](https://www.sec.gov/Archives/edgar/data/1057352/000095012311056513/w82657a1exv4w1.htm)] | | | | | | Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-4 of the Registrant (Reg. No. 333-174214) filed with the SEC on June 3, 2011). | | |

| [removed: [4.3](http://www.sec.gov/Archives/edgar/data/1057352/000114036120015295/ex4_1.htm)] [added: [4.3](https://www.sec.gov/Archives/edgar/data/1057352/000114036120015295/ex4_1.htm)] | | | | | | Indenture, dated as of July 1, 2020, by and among CoStar Group, Inc., as issuer, the guarantors named therein and Wilmington Trust, National Association, as trustee, relating to the 2.800% Senior Notes due 2030, including the form of 2.800% Senior Notes due 2030 (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 1, 2020). | | |

| [removed: *[10.1](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000138/ex44-2016stockincentivepla.htm)] [added: *[10.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000138/ex44-2016stockincentivepla.htm)] | | | | | | CoStar Group, Inc. 2016 Stock Incentive Plan (Incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-8 of the Registrant (Reg. No. 333-212278) filed with the SEC on June 28, 2016). | | |

| [removed: *[10.2](http://www.sec.gov/Archives/edgar/data/1057352/000105735218000066/csgp-3312018xex101.htm)] [added: *[10.2](https://www.sec.gov/Archives/edgar/data/1057352/000105735218000066/csgp-3312018xex101.htm)] | | | | | | First Amendment to the CoStar Group, Inc. 2016 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed April 25, 2018). | | |

| [removed: *[10.3](http://www.sec.gov/Archives/edgar/data/1057352/000105735212000101/ex101.htm)] [added: *[10.3](https://www.sec.gov/Archives/edgar/data/1057352/000105735212000101/ex101.htm)] | | | | | | CoStar Group, Inc. 2007 Stock Incentive Plan, as amended (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed June 8, 2012). | | |

| [removed: *[10.4](http://www.sec.gov/Archives/edgar/data/1057352/000105735208000004/frenchsub_plan.htm)] [added: *[10.4](https://www.sec.gov/Archives/edgar/data/1057352/000105735208000004/frenchsub_plan.htm)] | | | | | | CoStar Group, Inc. 2007 Stock Incentive Plan French Sub-Plan (Incorporated by reference to Exhibit 10.3 to the Registrant’s Report on Form 10-K filed February 29, 2008). | | |

| [removed: *[10.5](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex103.htm)] [added: *[10.5](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex103.htm)] | | | | | | Form of CoStar Group, Inc. 2016 Plan Restricted Stock Grant Agreement between the Registrant and certain of its officers, directors and employees (Incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed July 28, 2016). | | |

| [removed: *[10.6](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex104.htm)] [added: *[10.6](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex104.htm)] | | | | | | Form of CoStar Group, Inc. 2016 Plan Restricted Stock Grant Agreement for Service Awards between the Registrant and certain of its officers and employees (Incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed July 28, 2016). | | |

| [removed: *[10.7](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex105.htm)] [added: *[10.7](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex105.htm)] | | | | | | Form of CoStar Group, Inc. 2016 Plan Restricted Stock Unit Grant Agreement between the Registrant and certain of its officers and employees (Incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed July 28, 2016). | | |

| [removed: *[10.8](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex106.htm)] [added: *[10.8](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex106.htm)] | | | | | | Form of CoStar Group, Inc. 2016 Plan Incentive Stock Option Grant Agreement between the Registrant and certain of its officers and employees (Incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed July 28, 2016). | | |

| [removed: *[10.9](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex107.htm)] [added: *[10.9](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex107.htm)] | | | | | | Form of CoStar Group, Inc. 2016 Plan Incentive Stock Option Grant Agreement between the Registrant and Andrew C. Florance (Incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q filed July 28, 2016). | | |

| [removed: *[10.10](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex108.htm)] [added: *[10.10](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex108.htm)] | | | | | | Form of CoStar Group, Inc. 2016 Plan Nonqualified Stock Option Grant Agreement between the Registrant and certain of its officers, directors and employees (Incorporated by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q filed July 28, 2016). | | |

| [removed: *[10.11](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex109.htm)] [added: *[10.11](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex109.htm)] | | | | | | Form of CoStar Group, Inc. 2016 Plan Nonqualified Stock Option Grant Agreement between the Registrant and Andrew C. Florance (Incorporated by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q filed July 28, 2016). | | |

| [removed: *[10.12](http://www.sec.gov/Archives/edgar/data/1057352/000105735207000051/ex_99-1.htm)] [added: *[10.12](https://www.sec.gov/Archives/edgar/data/1057352/000105735207000051/ex_99-1.htm)] | | | | | | Form of 2007 Plan Restricted Stock Grant Agreement between the Registrant and certain of its officers, directors and employees (Incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed June 22, 2007). | | |

| [removed: *[10.13](http://www.sec.gov/Archives/edgar/data/1057352/000105735214000006/csgp-ex108_20131231.htm)] [added: *[10.13](https://www.sec.gov/Archives/edgar/data/1057352/000105735214000006/csgp-ex108_20131231.htm)] | | | | | | Form of 2007 Plan Restricted Stock Unit Agreement between the Registrant and certain of its officers and employees (Incorporated by reference to Exhibit 10.8 to the Registrant's Annual Report on Form 10-K filed February 20, 2014). | | |

| [removed: *[10.14](http://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/iso2007agrmt.htm)] [added: *[10.14](https://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/iso2007agrmt.htm)] | | | | | | Form of 2007 Plan Incentive Stock Option Grant Agreement between the Registrant and certain of its officers and employees (Incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K filed February 24, 2009). | | |

| [removed: *[10.15](http://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/iso2007agrmt_w-florance.htm)] [added: *[10.15](https://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/iso2007agrmt_w-florance.htm)] | | | | | | Form of 2007 Plan Incentive Stock Option Grant Agreement between the Registrant and Andrew C. Florance (Incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K filed February 24, 2009). | | |

| [removed: *[10.16](http://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/nqso2007agrmt.htm)] [added: *[10.16](https://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/nqso2007agrmt.htm)] | | | | | | Form of 2007 Plan Nonqualified Stock Option Grant Agreement between the Registrant and certain of its officers and employees (Incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed February 24, 2009). | | |

| [removed: *[10.17](http://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/nqso2007agrmt_w-dir.htm)] [added: *[10.17](https://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/nqso2007agrmt_w-dir.htm)] | | | | | | Form of 2007 Plan Nonqualified Stock Option Grant Agreement between the Registrant and certain of its directors (Incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed February 24, 2009). | | |

| [removed: *[10.18](http://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/nqso2007agrmt_w-florance.htm)] [added: *[10.18](https://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/nqso2007agrmt_w-florance.htm)] | | | | | | Form of 2007 Plan Nonqualified Stock Option Grant Agreement between the Registrant and Andrew C. Florance (Incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed February 24, 2009). | | |

| [removed: *[10.19](http://www.sec.gov/Archives/edgar/data/1057352/000105735208000004/rest_stockform-frenchsubform.htm)] [added: *[10.19](https://www.sec.gov/Archives/edgar/data/1057352/000105735208000004/rest_stockform-frenchsubform.htm)] | | | | | | Form of 2007 Plan French Sub-Plan Restricted Stock Agreement between the Registrant and certain of its employees (Incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed February 29, 2008). | | |

| [removed: *[10.20](http://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex102.htm)] [added: *[10.20](https://www.sec.gov/Archives/edgar/data/1057352/000105735216000143/csgp-6302016xex102.htm)] | | | | | | CoStar Group, Inc. 2016 Cash Incentive Plan (Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed July 28, 2016). | | |

| *[10.21](https://www.sec.gov/Archives/edgar/data/1057352/000105735221000080/secondaresppplanasapproved.htm) | | | | | | Second Amended and Restated Employee Stock Purchase Plan (Incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form S-8 [removed: (No.] [added: ( Reg. No.] 333-258220) filed with the SEC on July 28, 2021). | | |

| [removed: *[10.22](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-ex102220231231.htm)] [added: *[10.22](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-ex102220241231.htm)] | | | | | | Canadian Addendum to CoStar Group ESPP (filed herewith). | | |

| [removed: *[10.23](http://www.sec.gov/Archives/edgar/data/1057352/000105735218000011/csgp-ex1021_20171207.htm)] [added: *[10.23](https://www.sec.gov/Archives/edgar/data/1057352/000105735218000011/csgp-ex1021_20171207.htm)] | | | | | | CoStar Group, Inc. Management Stock Purchase Plan (Incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K filed February 23, 2018). | | |

| [removed: *[10.24](http://www.sec.gov/Archives/edgar/data/1057352/000105735213000078/csgp-9302013xex101.htm)] [added: *[10.24](https://www.sec.gov/Archives/edgar/data/1057352/000105735213000078/csgp-9302013xex101.htm)] | | | | | | Summary of Non-Employee Director Compensation (Incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed on October 24, 2013). | | |

| [removed: *[10.25](http://www.sec.gov/Archives/edgar/data/1057352/0001005150-98-000402.txt)] [added: *[10.25](https://www.sec.gov/Archives/edgar/data/1057352/0001005150-98-000402.txt)] | | | | | | Employment Agreement for Andrew C. Florance (Incorporated by reference to Exhibit 10.2 to Amendment No. 1 to the Registrant's Registration Statement on Form S-1 (Reg. No. 333-47953) filed with the SEC on April 27, 1998). | | |

| [removed: *[10.26](http://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/firstamd-florance_empagrmt.htm)] [added: *[10.26](https://www.sec.gov/Archives/edgar/data/1057352/000105735209000013/firstamd-florance_empagrmt.htm)] | | | | | | First Amendment to Andrew C. Florance Employment Agreement, effective January 1, 2009 (Incorporated by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K filed February 24, 2009). | | |

| [removed: [10.27](http://www.sec.gov/Archives/edgar/data/1057352/000095013304001856/w96989exv10w1.htm)] [added: [10.27](https://www.sec.gov/Archives/edgar/data/1057352/000095013304001856/w96989exv10w1.htm)] | | | | | | Form of Indemnification Agreement between the Registrant and each of its officers and directors (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on May 7, 2004). | | |

| [removed: [10.28](http://www.sec.gov/Archives/edgar/data/1057352/000105735211000072/lease.htm)] [added: [10.28](https://www.sec.gov/Archives/edgar/data/1057352/000105735211000072/lease.htm)] | | | | | | Deed of Office Lease by and between GLL L-Street 1331, LLC and CoStar Realty Information, Inc., dated February 18, 2011, and made effective as of June 1, 2010 (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on form 10-Q filed on April 29, 2011). | | |

| [removed: [10.29](http://www.sec.gov/Archives/edgar/data/1057352/000114036120015295/ex10_1.htm)] [added: #[10.29](https://www.sec.gov/Archives/edgar/data/1057352/000119312524151700/d794196dex101.htm)] | | | | | | [removed: Second Amended and Restated] Credit Agreement, dated as of [removed: July 1, 2020,] [added: May 24, 2024,] by and among CoStar Group, Inc., as borrower, [removed: CoStar Realty Information, Inc., as co-borrower,] the lenders party thereto and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on [removed: July 1, 2020)] [added: May 31, 2024).] | | |

| [removed: [21.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgpex21120231231.htm)] [added: [21.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-ex21120241231.htm)] | | | | | | Subsidiaries of the Registrant (filed herewith). | | |

| [removed: [23.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-ex23120231231.htm)] [added: [23.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-ex23120241231.htm)] | | | | | | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (filed herewith). | | |

| [removed: [31.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-ex31120231231.htm)] [added: [31.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-ex31120241231.htm)] | | | | | | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | | |

| [removed: [31.2](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-ex31220231231.htm)] [added: [31.2](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-ex31220241231.htm)] | | | | | | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | | |

| [removed: [32.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-ex32120231231.htm)] [added: [32.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-ex32120241231.htm)] | | | | | | Certification of Principal Executive Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | | |

| [removed: [32.2](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-ex32220231231.htm)] [added: [32.2](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-ex32220241231.htm)] | | | | | | Certification of Principal Financial Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | | |

| [removed: [97](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-ex9720231231.htm)] [added: [19.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735225000016/csgp-ex19120241231.htm)] | | | | | | CoStar Group, Inc. [removed: Clawback Policy, effective September 13, 2023] [added: Insider Trading Compliance Policy] (filed herewith). | | |

| 101.INS | | | | | | The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, [removed: 2023,] [added: 2024,] formatted in Inline XBRL: (i) Consolidated Statements of Operations; (ii) Consolidated Statements of Comprehensive Income; (iii) Consolidated Balance Sheets; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. | | |

| 104 | | | | | | The cover page from the Registrant's Annual Report on Form 10-K for the year ended December 31, [removed: 2023,] [added: 2024,] formatted in Inline XBRL (included as Exhibit 101). | | |

| #[2.1](https://www.sec.gov/Archives/edgar/data/1057352/000119312524103937/d828310dex21.htm) | | | | | | Agreement and Plan of Merger and Reorganization dated April 21, 2024, by and among CoStar Group, Inc., Matterport, Inc., Matrix Merger Sub, Inc. and Matrix Merger Sub II LLC (Incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 22, 2024). | | |

| [97.1](https://www.sec.gov/Archives/edgar/data/1057352/000105735224000013/csgp-ex9720231231.htm) | | | | | | CoStar Group, Inc. Policy for Recovery of Erroneously Awarded Compensation (Incorporated by reference to Exhibit 97 to the Registrant's Annual Report on Form 10-K filed February 22, 2024). | | |

# Schedules and exhibits (or similar attachments) have been omitted from this exhibit pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish copies of the such schedules (or similar attachments) to the SEC upon request.

| | | | | | | | | |

| [10.30](http://www.sec.gov/Archives/edgar/data/1057352/000105735223000111/csgp-063023xex101.htm) | | | | | | First Amendment to the Second Amended and Restated Credit Agreement, dated as of May 8, 2023, among CoStar Group, Inc., as borrower, CoStar Realty Information, Inc., as co-borrower, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed July 26, 2023) | | |

| February [removed: 21, 2024] [added: 19, 2025] | | | | | | Andrew C. Florance | | |

Florance and [removed: Scott T.][added: Christian M.]

[removed: Wheeler,] [added: Lown,] and each of them individually, as their true and lawful attorneys-in-fact and agents, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all exhibits thereto and to all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, herein by ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

| /s/ Michael R. Klein | | | | | | Chairman of the Board | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| /s/ Andrew C. Florance | | | | | | Chief Executive Officer and | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| /s/ [removed: Scott T. Wheeler] [added: Christian M. Lown] | | | | | | Chief Financial Officer | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| /s/ Angelique G. Brunner | | | | | | Director | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| /s/ John W. Hill | | | | | | Director | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| /s/ Laura Cox Kaplan | | | | | | Director | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| /s/ Christopher J. Nassetta | | | | | | Director | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| /s/ Louise S. Sams | | | | | | Director | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| /s/ Robert W. Musslewhite | | | | | | Director | | | | | | February [removed: 21, 2024] [added: 19, 2025] | | |

| Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 42) | | | [removed: [F-](#i3d5fa50fac5a487ea89498a470016300_124)[2](#i3d5fa50fac5a487ea89498a470016300_124)] [added: [F-](#i41275714db3541c8a24982c2435763d8_136)[2](#i41275714db3541c8a24982c2435763d8_136)] | | |

| Consolidated Statements of Operations | | | [removed: [F-](#i3d5fa50fac5a487ea89498a470016300_127)[6](#i3d5fa50fac5a487ea89498a470016300_127)] [added: [F-](#i41275714db3541c8a24982c2435763d8_139)[6](#i41275714db3541c8a24982c2435763d8_139)] | | |

| Consolidated Statements of Comprehensive Income | | | [removed: [F-](#i3d5fa50fac5a487ea89498a470016300_130)[7](#i3d5fa50fac5a487ea89498a470016300_130)] [added: [F-](#i41275714db3541c8a24982c2435763d8_142)[7](#i41275714db3541c8a24982c2435763d8_142)] | | |

| Consolidated Balance Sheets | | | [removed: [F-](#i3d5fa50fac5a487ea89498a470016300_133)[8](#i3d5fa50fac5a487ea89498a470016300_133)] [added: [F-](#i41275714db3541c8a24982c2435763d8_145)[8](#i41275714db3541c8a24982c2435763d8_145)] | | |

| Consolidated Statements of Changes in Stockholders’ Equity | | | [removed: [F-](#i3d5fa50fac5a487ea89498a470016300_136)[9](#i3d5fa50fac5a487ea89498a470016300_136)] [added: [F-](#i41275714db3541c8a24982c2435763d8_148)[9](#i41275714db3541c8a24982c2435763d8_148)] | | |

| Consolidated Statements of Cash Flows | | | [removed: [F-](#i3d5fa50fac5a487ea89498a470016300_139)[10](#i3d5fa50fac5a487ea89498a470016300_139)] [added: [F-](#i41275714db3541c8a24982c2435763d8_151)[10](#i41275714db3541c8a24982c2435763d8_151)] | | |

| Notes to Consolidated Financial Statements | | | [removed: [F-](#i3d5fa50fac5a487ea89498a470016300_142)[12](#i3d5fa50fac5a487ea89498a470016300_142)] [added: [F-](#i41275714db3541c8a24982c2435763d8_154)[12](#i41275714db3541c8a24982c2435763d8_154)] | | |

[removed: The] [added: To the Stockholders and] Board of Directors [removed: and Stockholders] of CoStar Group, [removed: Inc.][added: Inc.]

We have audited the accompanying consolidated balance sheets of CoStar Group, Inc. (the Company) as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of operations, comprehensive income, changes in stockholders’ [removed: equity,] [added: equity] and cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February [removed: 21, 2024] [added: 19, 2025] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | | | | As described in Note 2 to the consolidated financial statements, the Company derives revenues primarily by (i) providing access to its proprietary database of commercial real estate information and (ii) providing online marketplaces for professional property management companies, property owners, real estate agents and brokers and landlords, in each case, typically through a fixed fee for its subscription-based services. Revenues from subscription-based contracts are approximately [removed: 95%] [added: 96%] of total revenues for the current year and are recognized on a straight-line basis over the term of the agreement. The Company’s revenue recognition process involves several applications responsible for the initiation, processing, and recording of transactions. These applications interface with the Company’s enterprise resource planning system through automated and manual journal entries to accurately reflect revenue. | | |

We have audited CoStar Group, Inc.’s internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, CoStar Group, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of [removed: CoStar Group, Inc.] [added: the Company] as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of operations, comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, [removed: 2023] [added: 2024] and the related notes [removed: of CoStar Group, Inc.] and our report dated February [removed: 21, 2024] [added: 19, 2025] expressed an unqualified opinion thereon.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of [removed: OnTheMarket Plc.,] [added: Visual Lease LLC,] which is included in the [removed: 2023] [added: 2024] consolidated financial statements of the Company and constituted less than [removed: 1%] [added: 3%] and [removed: 1%] [added: 3%] of total and net assets, respectively, as of December 31, [removed: 2023,] [added: 2024,] and less than 1% and less than 1% of revenues and net income, respectively, for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of [removed: OnTheMarket Plc.][added: Visual Lease, LLC.]

| | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Revenues | | | $ | [removed: 2,455.0] [added: 2,736.2] | | | | | $ | [removed: 2,182.4] [added: 2,455.0] | | | | | $ | [removed: 1,944.1] [added: 2,182.4] | |

| Cost of revenues | | | [removed: 491.5] [added: 558.5] | | | | | | [removed: 414.0] [added: 491.5] | | | | | | [removed: 357.2] [added: 414.0] | | |

| Gross profit | | | [removed: 1,963.5] [added: 2,177.7] | | | | | | [removed: 1,768.4] [added: 1,963.5] | | | | | | [removed: 1,586.9] [added: 1,768.4] | | |

| Selling and marketing (excluding customer base amortization) | | | [removed: 989.9] [added: 1,364.3] | | | | | | [removed: 684.2] [added: 989.9] | | | | | | [removed: 622.0] [added: 684.2] | | |

| Software development | | | [removed: 267.6] [added: 325.3] | | | | | | [removed: 220.9] [added: 267.6] | | | | | | [removed: 201.0] [added: 220.9] | | |

| General and administrative | | | [removed: 381.5] [added: 439.1] | | | | | | [removed: 338.7] [added: 381.5] | | | | | | [removed: 256.8] [added: 338.7] | | |

| Customer base amortization | | | [removed: 42.2] [added: 44.3] | | | | | | [removed: 73.6] [added: 42.2] | | | | | | [removed: 74.8] [added: 73.6] | | |

| | | | [removed: 1,681.2] [added: 2,173.0] | | | | | | [removed: 1,317.4] [added: 1,681.2] | | | | | | [removed: 1,154.6] [added: 1,317.4] | | |

| Income from operations | | | [removed: 282.3] [added: 4.7] | | | | | | [removed: 451.0] [added: 282.3] | | | | | | [removed: 432.3] [added: 451.0] | | |

| Interest [removed: income (expense),] [added: income,] net | | | [removed: 213.6] [added: 212.5] | | | | | | [removed: 32.1] [added: 213.6] | | | | | | [removed: (31.6)] [added: 32.1] | | |

| Christian M. Lown | | | | | | (Principal Financial Officer) | | | | | | | | |

| /s/ Cynthia C. Cann | | | | | | Chief Accounting Officer | | | | | | February 19, 2025 | | |

| Cynthia C. Cann | | | | | | (Principal Accounting Officer) | | | | | | | | |

February 19, 2025

To the Stockholders and Board of Directors of CoStar Group, Inc.

February 19, 2025

| | | | 2024 | | | | | | 2023 | | |

| Accrued expenses and other current liabilities | | | 179.7 | | | | | | 163.0 | | |

| Management stock purchase plan | | | 0.1 | | | | | | — | | | | | | (1.7) | | | | | | — | | | | | | — | | | | | | (1.7) | | |

| Balance at December 31, 2024 | | | 409.5 | | | | | | $ | 4.1 | | | | | $ | 5,231.9 | | | | | $ | (25.5) | | | | | $ | 2,343.0 | | | | | $ | 7,553.5 | |

| Net income | | | $ | 138.7 | | | | | $ | 374.7 | | | | | $ | 369.5 | |

| Purchases of property, equipment, and other assets for new campuses | | | (579.0) | | | | | | (117.5) | | | | | | (35.2) | | |

| Payments of debt issuance costs | | | (3.6) | | | | | | — | | | | | | — | | |

| Principal repayments of finance lease obligations | | | (5.1) | | | | | | (0.7) | | | | | | — | | |

We have created and compiled a standardized platform of online marketplace services, information, and analytics where industry professionals, consumers of real estate, and the related business communities can continuously interact and facilitate transactions by efficiently accessing and exchanging accurate and standardized real estate-related information.

Our service offerings span all property types, including office, residential, retail, industrial, multifamily, land, mixed-use, and hospitality.

Reclassifications

Certain prior year amounts in the property and equipment summary in Note 8 have been reclassified to conform to the current year presentation.

The reclassifications did not affect the consolidated balances sheets, consolidated statements of operations, or other consolidated financial statements for the years ended December 31, 2023 and 2022.

| | | | 2024 | | | | | | 2023 | | |

Finance lease costs primarily relate to vehicles used by the Company's research teams and the amortization of the ROU assets are recorded to cost of revenues in the consolidated statements of operations.

The impact of lease costs related to short-term leases was not material for the year ended December 31, 2024 and 2023.

Construction in progress includes expenditures for construction and improvements to our campuses and are stated at cost.

The Company capitalized interest costs during the construction phase.

Capitalized costs are allocated to certain property and equipment categories upon substantial completion.

Assumptions

Leasing Operations and Other Expense/Income, Net

In February 2024, the Company closed on the purchase of an office tower and the land on which it rests in Arlington, Virginia.

In January 2025, the Company relocated its headquarters from Washington, D.C. to Arlington, VA occupying approximately 30% of the building.

The Company intends to build out further space in this building to support anticipated growth and expansion of its operations in the coming years.

Maintenance, physical facilities, leasing, property management, and other key responsibilities related to property ownership are outsourced to professional real-estate managers.

The office tower measures approximately 550,000 rentable square feet.

The Company estimated the fair values of acquired tangible assets (consisting of land, buildings, improvements, and other assets), identified intangible assets and liabilities (consisting of in-place leases and above- and below-market leases), and other liabilities based on its evaluation of information and estimates available at the date of acquisition.

Based on these estimates, the Company allocated the total cost to the identified assets acquired and liabilities assumed based on their relative fair value.

The fair value of the building and building improvements consists of the physical structure containing rentable area, as well as amenities such as parking structures, and was valued as if vacant, using the cost approach, which uses replacement cost data obtained from industry recognized guides less depreciation as an input to estimate the fair value, with consideration given to its age, functionality, use classification, construction quality, replacement cost new, and accumulated depreciation (effective age vs. economic life).

The Company also considered the value of the building using an income approach.

The income approach uses market leasing assumptions to estimate the fair value of the property as if vacant assuming lease-up at prevailing market rental rates over a market-based lease-up period, including deductions for lost-rent during lease-up and leasing costs.

The cost and income approaches are reconciled to arrive at an estimated building fair value.

The Company assessed the fair value of land based on market comparisons.

The fair values of identified intangible assets and liabilities were determined based on the following:

| | | | | | | | | |

| Scott T. Wheeler | | | | | | (Principal Financial and Accounting Officer) | | | | | | | | |

| /s/ Michael J. Glosserman | | | | | | Director | | | | | | February 21, 2024 | | |

| Michael J. Glosserman | | | | | | | | | | | | | | |

COSTAR GROUP, INC.

February 21, 2024

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Income tax receivable | | | 2.0 | | | | | | 2.0 | | |

| Accrued expenses | | | 163.0 | | | | | | 89.1 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at January 1, 2021 | | | 394.3 | | | | | | $ | 3.9 | | | | | $ | 4,204.7 | | | | | $ | (0.9) | | | | | $ | 1,167.5 | | | | | $ | 5,375.2 | |

| Purchase and construction of Richmond assets | | | (117.5) | | | | | | (35.2) | | | | | | (123.7) | | |

| Other financing activities | | | (0.7) | | | | | | — | | | | | | (0.4) | | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Through our Homes.com Acquisition and OnTheMarket Acquisition, we also offer online platforms that manage workflow and marketing for residential real estate agents and brokers and provide portals for homebuyers to view residential property listings.

determination of contract transaction price, (iv) allocation of contract transaction price to the performance obligations and (v) determination of revenue recognition based on timing of satisfaction of the performance obligations.

When

ROU assets resulting from finance leases are accounted for as property and equipment, net.

In January 2021, the Company purchased an office building located in Richmond, Virginia, together with the land and assumed an existing lease for a purchase price of $131 million, inclusive of property taxes, title insurance and other transaction costs.

The assumed lease terminated in the year ending December 31 2023.

The net impact from the lease arrangement is recorded in other income, net on the consolidated statements of operations and was not material.

The Company has broken ground on an expansion of its campus in Richmond, Virginia and acquired a small office building near the campus to facilitate employee staging while the expansion is being constructed.

The capitalized spending associated with these efforts is recorded in the purchase and construction of Richmond assets line of the consolidated statements of cash flows.

In 2021, the Company adopted ASU 2021-08, Business Combinations (Topic 805), *Accounting for Contract Assets and Contract Liabilities from Contracts with Customers*.

Company had originated the acquired contract.

The Company applied this revised guidance to all acquisitions in the year ended December 31, 2021.

The application of this guidance to contract assets and contract liabilities acquired or assumed in connection with the Company's acquisitions for the year ended December 31, 2021 did not have a material impact on the Company's consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU 2020-04, *Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.* ASC 848 contains optional expedients and exceptions for applying GAAP to debt, contracts, hedging relationships and other transactions affected by reference rate reform.

The provisions of ASC 848 must be applied to all contracts that are accounted for under a Topic, Subtopic or Industry Subtopic for all transactions other than derivatives, which may be applied at a hedging relationship level.

However, in response to the deferral of the cessation date for certain overnight LIBOR measures, the FASB issued ASU 2022-06 on December 21, 2022, which extends the sunset date of Topic 848 to December 31, 2024.

The Company's 2020 Credit Agreement provides for a $750 million revolving credit facility and a letter of credit sublimit of $20 million, with interest rates previously benchmarked to LIBOR.

The Company adopted this accounting pronouncement with the execution of the First Amendment to the 2020 Credit Agreement in May 2023.

This guidance provides an optional practical expedient that allows a qualifying modification to be accounted for as a debt modification rather than be analyzed under existing guidance to determine if the modification should be accounted for as a debt extinguishment.

In adopting this accounting standard, we have elected to apply this optional expedient.

Adopting this accounting standard did not have a material impact on the Company's consolidated financial statements and related disclosures.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): *Troubled Debt Restructurings and Vintage Disclosures*.

This ASU eliminates prior guidance on troubled debt restructurings for creditors that have adopted ASU 2016-13, Measurement of Credit Losses in Financial Statements, and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty.

In addition, the ASU amends guidance on "vintage disclosures" to require the disclosure of current period gross write offs by year of origination.