Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			COSTAR GROUP, INC.
			By:			/s/ Andrew C. Florance
February 19, 2025						Andrew C. Florance
						President and Chief Executive Officer

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Andrew C. Florance and Christian M. 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.

Pursuant to the requirements of the Securities Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature						Capacity						Date
/s/ Michael R. Klein						Chairman of the Board						February 19, 2025
Michael R. Klein
/s/ Andrew C. Florance						Chief Executive Officer and						February 19, 2025
Andrew C. Florance						President and a Director
						(Principal Executive Officer)
/s/ Christian M. Lown						Chief Financial Officer						February 19, 2025
Christian M. Lown						(Principal Financial Officer)
/s/ Cynthia C. Cann						Chief Accounting Officer						February 19, 2025
Cynthia C. Cann						(Principal Accounting Officer)
/s/ Angelique G. Brunner						Director						February 19, 2025
Angelique G. Brunner
/s/ John W. Hill						Director						February 19, 2025
John W. Hill
/s/ Laura Cox Kaplan						Director						February 19, 2025
Laura Cox Kaplan
/s/ Robert W. Musslewhite						Director						February 19, 2025
Robert W. Musslewhite
/s/ Christopher J. Nassetta						Director						February 19, 2025
Christopher J. Nassetta
/s/ Louise S. Sams						Director						February 19, 2025
Louise S. Sams

COSTAR GROUP, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 42)			F-2
Consolidated Statements of Operations			F-6
Consolidated Statements of Comprehensive Income			F-7
Consolidated Balance Sheets			F-8
Consolidated Statements of Changes in Stockholders’ Equity			F-9
Consolidated Statements of Cash Flows			F-10
Notes to Consolidated Financial Statements			F-12

F-1

Report of Independent Registered Public Accounting Firm

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

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CoStar Group, Inc. (the Company) as of December 31, 2024 and 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, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 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, 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 19, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-2

						Highly Automated Revenue Systems related to Subscription Revenue
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 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.
						The process to calculate, aggregate, and record revenue relies on multiple internally developed and external software programs and systems and involves interfacing significant volumes of data across the systems. Auditing the Company's accounting for revenue from subscription-based contracts was challenging and complex due to the high volume of individually-low-monetary-value transactions, dependency on the effective design and operation of multiple applications, some of which are specifically designed for the Company's business, and the use of multiple data sources in the revenue recognition process. Given the complexity of the information technology (IT) environment, the required involvement of professionals with expertise in IT to identify, test, and evaluate the revenue data flows, systems, and automated controls, we considered the audit of the Company’s subscription revenue-generating transactions to be a critical audit matter.
How We Addressed the Matter in Our Audit						We performed procedures related to the Company’s internal controls that included, among others, obtaining an understanding, evaluating the design, and testing the operating effectiveness of internal controls over the Company’s accounting for subscription revenue. We tested the controls over the initiation and billing of new and recurring subscriptions, the provisioning of customers, and the Company’s cash to billings reconciliation process. We tested the controls related to the key application interfaces between the provisioning, billing, and accounting systems and tested IT general controls related to access to the relevant applications and data, and changes made to the relevant systems, configurations and interfaces.
						We performed substantive audit procedures that included, among others, testing the Company’s accounting for revenue from contracts with customers, by testing, on a sample basis, the completeness and accuracy of the underlying data within the Company’s billing system. We performed data analytics by extracting data from the general ledger to evaluate the completeness and accuracy of recorded revenue and deferred revenue amounts, tracing a sample of sales transactions to source data, and testing a sample of cash to billings reconciliations.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1994.

Tysons, Virginia

February 19, 2025

F-3

Report of Independent Registered Public Accounting Firm

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

Opinion on Internal Control Over Financial Reporting

We have audited CoStar Group, Inc.’s internal control over financial reporting as of December 31, 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, 2024, based on the COSO criteria.

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 Visual Lease LLC, which is included in the 2024 consolidated financial statements of the Company and constituted less than 3% and 3% of total and net assets, respectively, as of December 31, 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 Visual Lease, LLC.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 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, 2024 and the related notes and our report dated February 19, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-4

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Tysons, Virginia

February 19, 2025

F-5

COSTAR GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

			Year Ended December 31,
			2024						2023						2022
Revenues			$	2,736.2					$	2,455.0					$	2,182.4
Cost of revenues			558.5						491.5						414.0
Gross profit			2,177.7						1,963.5						1,768.4
Operating expenses:
Selling and marketing (excluding customer base amortization)			1,364.3						989.9						684.2
Software development			325.3						267.6						220.9
General and administrative			439.1						381.5						338.7
Customer base amortization			44.3						42.2						73.6
			2,173.0						1,681.2						1,317.4
Income from operations			4.7						282.3						451.0
Interest income, net			212.5						213.6						32.1
Other (expense) income, net			(7.1)						5.4						3.4
Income before income taxes			210.1						501.3						486.5
Income tax expense			71.4						126.6						117.0
Net income			$	138.7					$	374.7					$	369.5
Net income per share — basic			$	0.34					$	0.92					$	0.93
Net income per share — diluted			$	0.34					$	0.92					$	0.93
Weighted-average outstanding shares — basic			406.3						405.3						396.3
Weighted-average outstanding shares — diluted			407.8						406.9						397.8

See accompanying notes.

F-6

COSTAR GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

						Year Ended December 31,
						2024						2023						2022
Net income						$	138.7					$	374.7					$	369.5
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment						(7.9)						11.5						(23.3)
Total other comprehensive (loss) income, net of tax						(7.9)						11.5						(23.3)
Total comprehensive income						$	130.8					$	386.2					$	346.2

See accompanying notes.

F-7

COSTAR GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

			December 31,
			2024						2023
ASSETS
Current assets:
Cash and cash equivalents			$	4,681.0					$	5,215.9
Accounts receivable			210.7						213.2
Less: Allowance for credit losses			(22.8)						(23.2)
Accounts receivable, net			187.9						190.0
Prepaid expenses and other current assets			81.3						70.2
Total current assets			4,950.2						5,476.1
Deferred income taxes, net			30.6						4.3
Property and equipment, net			1,014.9						472.2
Lease right-of-use assets			103.0						79.8
Goodwill			2,527.6						2,386.2
Intangible assets, net			433.2						313.7
Deferred commission costs, net			169.6						167.7
Deposits and other assets			27.7						19.7
Total assets			$	9,256.8					$	8,919.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	47.0					$	23.1
Accrued wages and commissions			133.3						117.8
Accrued expenses and other current liabilities			179.7						163.0
Income taxes payable			23.2						7.7
Lease liabilities			32.0						40.0
Deferred revenue			137.1						104.2
Total current liabilities			552.3						455.8
Long-term debt, net			991.9						990.5
Deferred income taxes, net			7.6						36.7
Income taxes payable			25.0						18.2
Lease and other long-term liabilities			126.5						79.9
Total liabilities			1,703.3						1,581.1
Stockholders’ equity:
Preferred stock, $0.01 par value; 2 million shares authorized; zero outstanding			—						—
Common stock, $0.01 par value; 1.2 billion shares authorized; 409.5 million and 408.1 million issued and outstanding as of December 31, 2024 and 2023, respectively			4.1						4.1
Additional paid-in capital			5,231.9						5,147.8
Accumulated other comprehensive loss			(25.5)						(17.6)
Retained earnings			2,343.0						2,204.3
Total stockholders’ equity			7,553.5						7,338.6
Total liabilities and stockholders’ equity			$	9,256.8					$	8,919.7

See accompanying notes.

F-8

COSTAR GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in millions)

			Common Stock												Additional Paid-In Capital						Accumulated Other Comprehensive Loss						Retained Earnings						Total Stockholders’ Equity
			Shares						Amount
Balance at January 1, 2022			395.0						$	3.9					$	4,253.3					$	(5.8)					$	1,460.1					$	5,711.5
Net income			—						—						—						—						369.5						369.5
Other comprehensive loss			—						—						—						(23.3)						—						(23.3)
Restricted stock issued			1.5						0.1						—						—						—						0.1
Restricted stock grants surrendered			(0.7)						—						(23.1)						—						—						(23.1)
Stock-based compensation expense			—						—						74.6						—						—						74.6
Employee stock purchase plan			0.2						—						15.0						—						—						15.0
Stock issued for equity offerings, net of transaction costs			10.7						0.1						745.6						—						—						745.7
Balance at December 31, 2022			406.7						4.1						5,065.4						(29.1)						1,829.6						6,870.0
Net income			—						—						—						—						374.7						374.7
Other comprehensive income			—						—						—						11.5						—						11.5
Exercise of stock options			0.4						—						7.5						—						—						7.5
Restricted stock issued			1.4						—						—						—						—						—
Restricted stock grants surrendered			(0.7)						—						(23.2)						—						—						(23.2)
Stock-based compensation expense			—						—						83.6						—						—						83.6
Management stock purchase plan			0.1						—						(3.2)						—						—						(3.2)
Employee stock purchase plan			0.2						—						17.7						—						—						17.7
Balance at December 31, 2023			408.1						4.1						5,147.8						(17.6)						2,204.3						7,338.6
Net income			—						—						—						—						138.7						138.7
Other comprehensive loss			—						—						—						(7.9)						—						(7.9)
Exercise of stock options			0.1						—						7.1						—						—						7.1
Restricted stock issued			1.7						—						—						—						—						—
Restricted stock grants surrendered			(0.7)						—						(27.8)						—						—						(27.8)
Stock-based compensation expense			—						—						87.1						—						—						87.1
Management stock purchase plan			0.1						—						(1.7)						—						—						(1.7)
Employee stock purchase plan			0.2						—						19.4						—						—						19.4
Balance at December 31, 2024			409.5						$	4.1					$	5,231.9					$	(25.5)					$	2,343.0					$	7,553.5

See accompanying notes.

F-9

COSTAR GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

			Year Ended December 31,
			2024						2023						2022
Operating activities:
Net income			$	138.7					$	374.7					$	369.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			146.9						107.5						137.9
Amortization of deferred commissions costs			116.7						95.2						76.1
Amortization of Senior Notes discount and issuance costs			2.8						2.4						2.4
Non-cash lease expense			32.7						30.0						38.5
Stock-based compensation expense			89.0						85.0						75.2
Deferred income taxes, net			(50.1)						(37.2)						(31.2)
Credit loss expense			36.4						35.0						18.3
Other operating activities, net			(1.3)						(3.2)						(2.4)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable			(30.2)						(66.6)						(46.4)
Prepaid expenses and other current assets			(7.4)						(16.2)						(17.9)
Deferred commissions			(120.2)						(120.2)						(116.8)
Accounts payable and other liabilities			43.5						33.9						23.2
Lease liabilities			(38.0)						(39.2)						(37.4)
Income taxes payable, net			22.4						10.7						(19.3)
Deferred revenue			11.2						(1.3)						6.8
Other assets			(0.5)						(1.0)						2.2
Net cash provided by operating activities			392.6						489.5						478.7
Investing activities:
Proceeds from sale and settlement of investments			—						3.8						0.9
Proceeds from sale of property and equipment and other assets			1.7						—						30.1
Purchases of property, equipment, and other assets for new campuses			(579.0)						(117.5)						(35.2)
Purchases of property, equipment, and other assets			(58.9)						(25.3)						(58.6)
Cash paid for acquisitions, net of cash acquired			(276.7)						(99.6)						(6.3)
Net cash (used in) investing activities			(912.9)						(238.6)						(69.1)
Financing activities:
Payments of long-term debt assumed in acquisition			—						—						(2.2)
Repurchase of restricted stock to satisfy tax withholding obligations			(29.5)						(26.4)						(23.0)
Proceeds from equity offering, net of transaction costs			—						—						745.7
Proceeds from exercise of stock options and employee stock purchase plan			24.5						23.4						13.5
Payments of debt issuance costs			(3.6)						—						—
Principal repayments of finance lease obligations			(5.1)						(0.7)						—
Net cash (used in) provided by financing activities			(13.7)						(3.7)						734.0
Effect of foreign currency exchange rates on cash and cash equivalents			(0.9)						0.7						(2.7)
Net (decrease) increase in cash and cash equivalents			(534.9)						247.9						1,140.9
Cash and cash equivalents at beginning of year			5,215.9						4,968.0						3,827.1
Cash and cash equivalents at end of year			$	4,681.0					$	5,215.9					$	4,968.0

F-10

COSTAR GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

			Year Ended December 31,
			2024						2023						2022
Supplemental cash flow disclosures:
Interest paid			$	31.0					$	30.7					$	29.9
Income taxes paid			$	99.8					$	163.2					$	169.2
Supplemental non-cash investing and financing activities:
Consideration owed for acquisitions			$	1.2					$	7.6					$	—
Accrued capital expenditures and non-cash landlord incentives			$	63.7					$	28.9					$	14.7

See accompanying notes.

F-11

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

**1.**ORGANIZATION

CoStar Group (the “Company”) is a leading global provider of commercial and residential real estate information, analytics, and online marketplaces. 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. The Company's services are typically distributed to its customers under subscription-based agreements that typically renew automatically, and have a minimum term of one year. The Company operates within two operating segments, North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific, and Latin America.

The Company acquired Business Immo, OnTheMarket, and Visual Lease in April 2022, December 2023, and November 2024, respectively. See Note 5 for further discussion of these acquisitions.

**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Accounting policies are consistent for each operating segment.

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.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, allowance for credit losses, the useful lives and recoverability of long-lived and intangible assets, goodwill impairment assessment, income taxes, accounting for business combinations, stock-based compensation, estimating the Company's incremental borrowing rate for its leases, and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ from these estimates.

Revenue Recognition

The Company derives revenues primarily by (i) providing access to its proprietary database of commercial real estate information, including benchmarking and analytics for the hospitality industry, and analytics for lenders (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 monthly fee for its subscription-based advertising services. Other subscription-based services include (i) real estate and lease management solutions to commercial customers and real estate investors and (ii) access to applications to manage workflow for residential real estate agents.

Subscription contract rates are generally based on the number of sites, number of users, organization size, the customer’s business focus, geography, the number of properties reported on or analyzed, the number and types of services to which a customer subscribes, the number of properties a customer advertises, the number of transactions and average transaction size a broker or agent has closed, and the prominence and placement of a customer's advertised properties in the search results. The Company’s subscription-based license or membership agreements typically renew automatically, and a majority have a term of at least one year. Revenue from our subscription-based contracts was approximately 96%, 95%, and 93% of total revenue for the years ended December 31, 2024, 2023, and 2022, respectively.

F-12

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company also derives revenues from transaction-based services including: (i) an online auction platform for commercial real estate through Ten-X, (ii) providing online tenant applications, including background and credit checks, and rental payment processing, and (iii) ancillary products and services that are sold on an ad hoc basis.

The Company analyzes contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers, (ii) identification of distinct performance obligations in the contract, (iii) 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.

The Company recognizes revenues upon the satisfaction of its performance obligation(s) (upon transfer of control of promised services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those services. Revenues from subscription-based services are recognized on a straight-line basis over the term of the agreement. Revenues from transaction-based services are recognized when the promised product or services are delivered, which, in the case of Ten-X auctions, is at the time of a successful closing for the sale of the property.

In limited circumstances, the Company's contracts with customers include promises to transfer multiple services, such as contracts for its subscription-based services and professional services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct, which involves the determination of the standalone selling price for each distinct performance obligation.

Deferred revenue results from amounts billed in advance to customers or cash received from customers in advance of the Company's fulfillment of its performance obligation(s) and is recognized as those obligations are satisfied.

Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Contract assets are generated when contractual billing schedules differ from revenue recognition timing.

Certain sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions incurred for obtaining new contracts are deferred and then amortized as selling and marketing expenses on a straight-line basis over a period of benefit that the Company has determined to be three years. The three-year amortization period was determined based on several factors, including the nature of the technology and proprietary data underlying the services being purchased, customer contract renewal rates, and industry competition. Sales commissions that do not represent incremental costs of obtaining a contract, or that would otherwise be amortized over a period of one year or less, are not subject to capitalization.

See Note 3 for further discussion of the Company's revenue recognition.

Cost of Revenues

Cost of revenues principally consists of salaries, benefits, bonuses, stock-based compensation expenses, and other indirect costs for the Company's researchers who collect and analyze the real estate data that is the basis for the Company's online marketplaces, information, and analytics, and for employees that support these products. Additionally, cost of revenues includes the cost of data from third-party data sources, product hosting costs, and costs related to advertising purchased on behalf of customers, credit card and other transaction fees relating to processing customer transactions, which are expensed as incurred, and the amortization of acquired trade names, technology, and certain other intangible assets.

Foreign Currency Translation

The Company’s reporting currency is the U.S. dollar. The functional currency for the majority of its operations is the local currency, with the exception of certain international locations for which the functional currency is the British Pound. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect as of the balance sheet date. Gains and losses resulting from translation are included in accumulated other comprehensive loss. Currency gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature are also included in accumulated other comprehensive loss. Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in other (expense) income, net in the consolidated statements of operations using the average exchange rates in effect during the period. The Company recognized a net foreign currency loss of $0.7 million, a net foreign currency gain of $3.0 million, and a net foreign currency gain of $1.4 million for the years ended December 31, 2024, 2023, and 2022, respectively, which are included in other (expense) income, net on the consolidated statements of operations.

F-13

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax, were as follows (in millions):

			As of December 31,
			2024						2023
Foreign currency translation loss			$	(25.5)					$	(17.6)
Total accumulated other comprehensive loss			$	(25.5)					$	(17.6)

There were no amounts reclassified out of accumulated other comprehensive loss to the consolidated statements of operations for both the years ended December 31, 2024 and 2023.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs include digital marketing, television, radio, print, and other media advertising. Advertising costs were $845.2 million, $549.6 million and $305.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Income Taxes

Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and the basis reported in the Company’s consolidated financial statements. Deferred tax liabilities and assets are determined based on the difference between the financial statement and the tax basis of assets and liabilities using enacted rates in effect during the year in which the Company expects differences to reverse. Valuation allowances are provided against assets, including net operating losses, if the Company determines it is more likely than not that some portion or all of an asset may not be realized. Interest and penalties related to income tax matters are recognized in income tax expense.

The Company has elected to record the GILTI under the current-period cost method.

See Note 12 for further discussion of the Company's income taxes.

Net Income Per Share

Net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period on a basic and diluted basis. The Company's potentially dilutive securities include outstanding stock options, unvested stock-based awards, which include restricted stock awards that vest over a specific service period, restricted stock awards with a performance and market condition, restricted stock units, and Matching RSUs awarded under the MSPP. Shares underlying unvested restricted stock awards that vest based on a performance and market condition that have not been achieved as of the end of the period are not included in the computation of basic or diluted earnings per share. Diluted net income per share considers the impact of potentially dilutive securities except when the inclusion of the potentially dilutive securities would have an anti-dilutive effect.

See Note 16 for further discussion of the Company's calculation of net income per share.

Stock-Based Compensation

Equity instruments issued in exchange for services performed by officers, employees, and directors of the Company are accounted for using a fair-value based method and the fair value of such equity instruments is recognized as expense in the consolidated statements of operations.

F-14

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For stock-based awards that vest over a specific service period, compensation expense is measured based on the fair value of the awards at the grant date and is recognized on a straight-line basis over the service period of the awards, net of an estimated forfeiture rate. For equity instruments that vest based on achievement of both a performance and market condition, stock-based compensation expense is recognized over the service period of the awards based on the expected achievement of the related performance conditions at the end of each reporting period. If the Company's initial estimates of the achievement of the performance conditions change, the related stock-based compensation expense may fluctuate from period to period based on those estimates. If the performance conditions are not met, no stock-based compensation expense will be recognized and any previously recognized stock-based compensation expense will be reversed. For awards with both a performance and a market condition, the Company estimates the fair value of each equity instrument granted on the date of grant using a Monte-Carlo simulation model. This pricing model uses multiple simulations to evaluate the probability of achieving the market condition to calculate the fair value of the awards which includes the recent market price and volatility of the Company's shares. When determining the grant date fair value of all stock-based awards, the Company considers whether it is in possession of any material, non-public information that upon its release would have a material effect on its share price, and if so, whether the observable share price or expected volatility assumptions used in determining the fair value of the awards should be adjusted.

Stock-based compensation expense for stock options, restricted stock awards, and restricted stock units issued under equity incentive plans, stock purchases under the ESPP, DSUs, and Matching RSUs awarded under the MSPP included in the Company’s consolidated statements of operations were as follows (in millions):

			Year Ended December 31,
			2024						2023						2022
Cost of revenues			$	14.5					$	14.3					$	12.6
Selling and marketing (excluding customer base amortization)			11.2						9.1						7.8
Software development			21.8						17.5						13.0
General and administrative			41.5						44.1						41.8
Total stock-based compensation expense			$	89.0					$	85.0					$	75.2

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents were $4.7 billion and $5.2 billion as of December 31, 2024 and 2023, respectively. The Company had no restricted cash as of December 31, 2024 and 2023.

Concentration of Credit Risk and Financial Instruments

The Company’s customer base creates a lack of dependence on any individual customer that mitigates the risk of nonpayment of the Company’s accounts receivable. No single customer accounted for more than 5% of the Company’s revenues for each of the years ended December 31, 2024, 2023, and 2022. The carrying amount of the accounts receivable approximates the net realizable value.

The Company holds cash at major financial institutions that often exceed Federal Deposit Insurance Corporation-insured limits. The Company manages its credit risk associated with cash concentrations by diversifying cash holdings across AAA-rated Government and Treasury Money Market Funds and multiple high quality financial institutions, and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The carrying value of cash approximates fair value. Historically, the Company has not experienced any losses due to such cash concentrations.

Allowance for Credit Losses

The Company maintains an allowance for credit losses to cover its current expected credit losses on its trade receivables and contract assets arising from the failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables and historical write-off trends. Based on the Company’s experience, the customer's delinquency status, which is analyzed periodically, is the strongest indicator of the credit quality of the underlying trade receivables. The Company’s policy is to write-off trade receivables when they are deemed uncollectible. A majority of the Company's trade receivables are less than 365 days outstanding.

F-15

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on five portfolio segments. The determination of portfolio segments is based primarily on the qualitative consideration of the nature of the Company’s business operations and the characteristics of the underlying trade receivables, as follows:

• CoStar Portfolio Segment - The CoStar portfolio segment consists of two classes of trade receivables based on geographical location: North America and International.

• Information Services Portfolio Segment - The Information Services portfolio segment consists of four classes of trade receivables: CoStar Real Estate Manager; Hospitality, North America; Hospitality, International, and other Information Services.

• Multifamily Portfolio Segment - The Multifamily portfolio segment consists of one class of trade receivables.

• LoopNet Portfolio Segment - The LoopNet portfolio segment consists of one class of trade receivables.

• Other Marketplaces Portfolio Segment - The Other Marketplaces portfolio segment consists of one class of trade receivables.

The majority of Residential revenue is e-commerce based and does not result in accounts receivable. Residential accounts receivable and the related allowance for credit losses are not material.

See Note 4 for further discussion of the Company’s accounting for allowance for credit losses.

Leases

The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at the commencement of the arrangement, at which time the Company also measures and recognizes an ROU asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. For the purposes of recognizing ROU assets and lease liabilities associated with the Company’s leases, the Company has elected the practical expedient to not recognize a ROU asset or lease liability for short-term leases, which are leases with a term of 12 months or less. The lease term is defined as the noncancellable portion of the lease term, plus any periods covered by an option to extend the lease if it is reasonably certain that the option will be exercised.

In determining the amount of lease payments used in measuring ROU assets and lease liabilities, the Company has elected the practical expedient not to separate non-lease components from lease components for all classes of underlying assets. Consideration deemed part of the lease payments used to measure ROU assets and lease liabilities generally includes fixed payments and variable payments based on either an index or a rate, offset by lease incentives. Upon commencement, the initial ROU asset also includes any lease prepayments. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The rates implicit within the Company's leases are generally not determinable. Therefore, the Company's incremental borrowing rate is used to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment and is determined at lease commencement and is subsequently reassessed upon a modification to the lease arrangement.

Lease costs related to the Company's operating leases are generally recognized as a single ratable lease cost over the lease term.

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.

See Note 7 for further discussion of the Company’s accounting for leases.

F-16

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment, Net

Property and equipment are stated at cost, net of accumulated depreciation and amortization. All repairs and maintenance costs are expensed as incurred. 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. Costs related to acquisition of additional aircraft components or the replacement of existing aircraft components are capitalized and depreciated over the estimated useful life of the aircraft or the added or replaced component, whichever is less. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives of the assets:

Buildings						Twenty to thirty-nine years
Land						Indefinite
Aircraft						Ten to twenty years
Furniture and office equipment						Five to ten years
Vehicles						Four to five years
Computer hardware and software						Three to five years
Leasehold improvements						Shorter of lease terms or useful life

Qualifying internal-use software costs incurred during the application development stage, which consist primarily of internal product development costs, are capitalized and amortized over the estimated useful life of the asset. All other costs are expensed as incurred. The Company removes fully depreciated property and equipment from the cost and accumulated depreciation amounts disclosed in the period they become fully depreciated.

Long-Lived Assets, Intangible Assets, and Goodwill

Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company capitalizes interest on borrowings during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying asset and amortized over the estimated useful life of the asset. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.

During 2022, the Company ceased using leased properties in California and Maryland as part of efforts to centralize its workforce, which resulted in an impairment charge of $9 million for lease ROU assets and property and equipment related to abandoned leases. The impairment was recorded in the general and administrative expense line of the consolidated statements of operations. The leases related to the North America segment.

Acquired technology and data, customer base assets, trade names, and other intangible assets are related to the Company’s acquisitions. Acquired technology and data is amortized on a straight-line basis over periods ranging from 2 years to 8 years. Acquired intangible assets characterized as customer base assets consist of acquired customer contracts and the related customer relationships and are amortized over periods ranging from 6 years to 15 years. Acquired customer bases are amortized on an accelerated or straight-line basis depending on the expected economic benefit of the intangible asset. Acquired trade names and other intangible assets are amortized on a straight-line basis over periods ranging from 2 years to 15 years. The Company removes fully amortized intangible assets from the cost and accumulated amortization amounts disclosed.

Goodwill represents the future economic benefits arising from a business combination and is calculated as the excess of the purchase consideration paid in a business combination over the fair value of the net identifiable assets acquired. Goodwill is not amortized, but instead is assigned to each of the Company's reporting units and tested for impairment at least annually, on October 1, or more frequently if an event or other circumstance indicates that the fair value of a reporting unit may be below its carrying amount. The Company may first assess qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or elect to bypass the qualitative assessment. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, or the Company elects to bypass the qualitative assessment, the Company then performs a quantitative assessment by determining the fair value of each reporting unit. The estimate of the fair value of each reporting unit is based on a projected discounted cash flow model that includes significant assumptions and estimates including the discount rate, growth rate and future financial performance. Assumptions

F-17

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

about the discount rate are based on a weighted average cost of capital for comparable companies. Assumptions about the growth rate and future financial performance of a reporting unit are based on the Company's forecasts, business plans, economic projections, and anticipated future cash flows. The fair value of each reporting unit is compared to the carrying amount of the reporting unit. If the carrying value of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference.

See Notes 5, 9, and 10 for further discussion of the Company's acquisitions, goodwill, and intangible assets, respectively.

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 accounted for the purchase of this building as an asset acquisition at the cost to acquire, including transaction costs. 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:

• The value allocable to the above- or below-market component of an acquired in-place lease is determined based upon the present value (using a discount rate that reflects the risks associated with the acquired lease) of the difference between: (i) the contractual amounts to be received pursuant to the lease over its remaining term and (ii) management's estimate of the amounts that would be received using market rates current at the time of the acquisition for the remaining term of the lease. Amounts allocated to above-market leases are recorded as above-market leases in intangible assets, net in the consolidated balance sheets. These intangible assets are amortized on a straight-line basis over periods ranging from 2 years to 11 years as a reduction to lease income which is recorded within other (expense) income, net in the consolidated statements of operations over the remaining terms of the respective leases.

• Factors considered in determining the value allocable to in-place leases during hypothetical lease-up periods related to space that is leased at the time of acquisition include: (i) lost rent and operating cost recoveries during the hypothetical lease-up period and (ii) theoretical leasing commissions required to execute similar leases. These intangible assets are recorded as in-place leases in intangible assets, net in the consolidated balance sheets and are amortized over periods ranging from 2 years to 11 years to other (expense) income, net in the consolidated statements of operations over the remaining terms of the existing leases.

F-18

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total cost of the land and building was $343.0 million and was allocated to the following components (in millions):

Component			Balance Sheet Caption			Amount
Land			Property and equipment, net			$	17.2
Building			Property and equipment, net			224.5
Land and building improvements			Property and equipment, net			27.5
Above-market leases			Intangible assets, net			41.7
In-place leases			Intangible assets, net			32.1
						$	343.0

The cash paid for this asset acquisition was included in the caption purchases of property, equipment, and other assets for new campuses in the consolidated statement of cash flows. The Company records the activity from this building's operations and leases, including building depreciation and operating expenses for space occupied by third parties, as other (expense) income, net in the consolidated statements of operations.

In October 2024, the Company and a building tenant modified a lease agreement to reduce the leased space and extend the lease term of a portion of the remaining space. Among other provisions, the modified lease agreement requires the tenant to make a $48 million buyout payment, in two equal installments, which will be recognized prospectively over the modified lease term. The Company received the first installment of the buyout payment in fourth quarter of 2024. The second installment of the buyout payment is due in 2025. The tenant surrendered certain space concurrently with the execution of the modified lease agreement and the Company began to outfit this space to host its employees.

Deferred lease income as of December 31, 2024 was as follows (in millions):

Balance			Balance Sheet Caption			Year Ended December 31, 2024
Current portion			Accrued expenses and other current liabilities			$	4.5
Non-current portion			Lease and other long-term liabilities			18.5
Total deferred lease income						$	23.0

Lease income includes base rent each tenant pays in accordance with the terms of its respective lease and is reported on a straight-line basis over the non-cancellable term of the lease, which includes the effects of periodic step-ups in rent and rent abatements under the lease. When a renewal option is included within the lease, the Company assesses whether the option is reasonably certain of being exercised against relevant economic factors to determine whether the option period should be included as part of the lease term. Further, lease income includes tenant reimbursement amounts for the recovery of the operating expenses and real estate taxes. Tenant reimbursements, which vary each period, are non-lease components that are not the predominant activity within the contract. The Company has elected the practical expedient that allows it to combine certain lease and non-lease components of operating leases. Non-lease components are recognized together with fixed base rent in "lease income," as variable lease income in the same period as the related expenses are incurred. Variable lease income was not material for the year ended December 31, 2024. Components of other (expense) income, net related to leasing operations for the year ended December 31, 2024 were as follows (in millions):

			Year Ended December 31, 2024
Lease income(1)			$	22.0
Less:
Property operating expenses			9.3
Depreciation and amortization expense			19.1
Other expense from leasing operations			$	(6.4)
__________________________
(1) Includes $9.5 million of amortization expense of above-market leases.

F-19

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a maturity analysis of the annual undiscounted cash flows as of December 31, 2024 (in millions):

			Operating Lease Payments
2025			$	41.4
2026			17.2
2027			16.8
2028			11.5
2029			9.7
Thereafter			38.5
Total undiscounted cash flows			$	135.1

Building depreciation and operating expenses for space occupied by the Company are allocated between cost of revenues, selling and marketing (excluding customer base amortization), software development, and general and administrative expenses on the consolidated statement of operations based on the headcount of the respective departments occupying the building. As of December 31, 2024, the Company occupied approximately 30% of the property with the remainder leased or available to be leased to third parties.

Debt Issuance Costs

Costs incurred in connection with the issuance of long-term debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method for term debt and on a straight-line basis for revolving debt. The Company made a policy election to classify deferred issuance costs on the revolving credit facility as a long-term asset on its consolidated balance sheets. Upon a refinancing or amendment, previously capitalized debt issuance costs are expensed and included in loss on extinguishment of debt if the Company determines that there has been a substantial modification of the related debt. If the Company determines that there has not been a substantial modification of the related debt, any previously capitalized debt issuance costs are amortized as interest expense over the term of the new debt instrument.

See Note 11 for further discussion of the Company's accounting for its outstanding debt, revolving credit facility, and related issuance costs.

Business Combinations

The Company includes the results of operations of the businesses that it acquires from the date of acquisition. The Company generally allocates the purchase consideration to the tangible assets acquired and liabilities assumed and intangible assets acquired based on their estimated fair values on the date of the acquisition. The purchase price is generally determined based on the fair value of the assets transferred, liabilities assumed, and equity interests issued, after considering any transactions that are separate from the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The Company applies significant assumptions, estimates, and judgments in determining the fair value of assets acquired and liabilities assumed on the acquisition date, especially with respect to intangible assets and contingent liabilities. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer bases, acquired technology and acquired trade names, useful lives, royalty rates, and discount rates. Estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Any adjustments to provisional amounts that are identified during the measurement period, not to exceed one year from the date of acquisition, are recorded in the reporting period in which the adjustment amounts are determined. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

The Company has elected the practical expedient provided under ASC 805, Business Combinations, which allows for contract assets and liabilities acquired or assumed in an acquisition to be measured in accordance with the accounting framework for revenue from contracts with customers as if the Company had originated the acquired contract. This is an exception to the general requirement to measure assets acquired and liabilities assumed at their fair value on the acquisition date.

For a given acquisition, the Company may identify certain pre-acquisition contingencies as of the acquisition date and may extend its review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether the Company includes these contingencies as a part of the fair value estimates of assets acquired and liabilities assumed and, if so, to determine their estimated amounts.

F-20

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

If the Company cannot reasonably determine the fair value of a pre-acquisition contingency (non-income tax related) by the end of the measurement period, which is generally the case given the nature of such matters, the Company will recognize an asset or a liability for such pre-acquisition contingency if: (i) it is probable that an asset existed or a liability had been assumed at the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated. Subsequent to the measurement period, changes in the Company's estimates of such contingencies will affect earnings and could have a material effect on its results of operations and financial position.

In addition, uncertain tax positions and tax-related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. The Company reevaluates these items based upon facts and circumstances that existed as of the acquisition date with any adjustments to its preliminary estimates being recorded to goodwill, provided that the Company is within the measurement period. Subsequent to the measurement period, changes to these uncertain tax positions and tax-related valuation allowances will affect the Company's provision for income taxes in its consolidated statements of operations and comprehensive income and could have a material impact on its results of operations and financial position.

Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expenses in the consolidated statements of operations.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

The Company adopted ASU No. 2023-07 (Topic 280), Improvements to Reportable Segment Disclosures effective January 1, 2024. This guidance requires enhanced disclosures about significant segment expenses. Additionally, it requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The adoption resulted in expanded segment reporting disclosures, with no impacts to our financial condition and results of operations.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09 (Topic 740), Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as an expansion of other income tax disclosures. The ASU is effective on a prospective basis for annual reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The ASU requires incremental disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization, and selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

F-21

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregated Revenue

The Company provides online marketplaces, information, and analytics to the commercial real estate industry, hospitality industry, residential industry, and related professionals. Revenues by operating segment and type of service consist of the following (in millions):

			Year Ended December 31,
			2024																		2023																		2022
			North America						International						Total						North America						International						Total						North America						International						Total
CoStar			$	957.3					$	63.2					$	1,020.5					$	886.0					$	39.2					$	925.2					$	800.2					$	36.8					$	837.0
Information services			115.2						20.7						135.9						132.4						38.5						170.9						125.0						32.4						157.4
Multifamily			1,067.3						—						1,067.3						914.2						—						914.2						745.4						—						745.4
LoopNet			270.9						10.8						281.7						255.4						9.4						264.8						223.7						7.2						230.9
Residential			58.9						41.7						100.6						43.9						2.2						46.1						73.7						—						73.7
Other Marketplaces			130.2						—						130.2						133.8						—						133.8						138.0						—						138.0
Total revenues			$	2,599.8					$	136.4					$	2,736.2					$	2,365.7					$	89.3					$	2,455.0					$	2,106.0					$	76.4					$	2,182.4

Deferred Revenue

Deferred revenue as of December 31, 2024 and 2023 was as follows (in millions):

						December 31,
Balance			Balance Sheet Caption			2024						2023
Current portion			Deferred revenue			$	137.1					$	104.2
Non-current portion			Lease and other long-term liabilities			0.2						0.1
Total deferred revenue						$	137.3					$	104.3

Changes in deferred revenue for the period were as follows (in millions):

Balance at December 31, 2023			$	104.3
Revenues recognized in the current period from the amounts in the beginning balance			(102.8)
New deferrals, net of amounts recognized in the current period(1)			136.4
Effects of foreign currency			(0.6)
Balance at December 31, 2024			$	137.3
__________________________

(1) This balance includes $22.4 million of net new deferrals recognized in connection with business acquisitions made in 2024. See Note 5 for further discussion of acquisitions.

Contract Assets

Contract assets are generated when contractual billing schedules differ from revenue recognition timing and represent a conditional right to consideration for satisfied performance obligations that becomes a receivable when the conditions are satisfied. Contract assets as of December 31, 2024 and 2023 were as follows (in millions):

						December 31,
Balance			Balance Sheet Caption			2024						2023
Current portion			Prepaid expenses and other current assets			$	5.8					$	5.8
Non-current portion			Deposits and other assets			6.0						8.0
Total contract assets						$	11.8					$	13.8

F-22

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenues were reduced by $2.0 million from contract assets for the year ended December 31, 2024 and revenues recognized from contract assets were $1.4 million for the year ended December 31, 2023.

Commissions

Commissions expense is included in selling and marketing expense in the Company's consolidated statements of operations. The Company determined that no deferred commissions were impaired as of both December 31, 2024 and 2023. Commissions expense activity for the years ended December 31, 2024, 2023, and 2022, was as follows (in millions):

			Year Ended December 31,
			2024						2023						2022
Commissions incurred			$	180.9					$	173.5					$	162.1
Commissions capitalized in the current period			(120.2)						(120.2)						(116.8)
Amortization of deferred commissions costs			116.7						95.2						76.1
Total commissions expense			$	177.4					$	148.5					$	121.4

See Note 2 for the Company's policy on accounting for commissions.

Unsatisfied Performance Obligations

Remaining contract consideration for which revenue had not been recognized due to unsatisfied performance obligations was $392.3 million as of December 31, 2024, which the Company expects to recognize over the next five years. This amount does not include contract consideration for contracts with a duration of one year or less.

**4.**ALLOWANCE FOR CREDIT LOSSES

The following tables detail the activity related to the allowance for credit losses for trade receivables by portfolio segment (in millions):

			Year Ended December 31, 2024
			CoStar						Information Services						Multifamily						LoopNet						Other Marketplaces												Total
Beginning balance at December 31, 2023			$	9.7					$	2.5					$	7.3					$	2.7					$	1.0											$	23.2
Current-period provision (release) for expected credit losses			15.5						2.4						12.4						5.6						0.5												36.4
Write-offs charged against the allowance, net of recoveries and other			(19.1)						(1.0)						(10.3)						(5.3)						(1.1)												(36.8)
Ending balance at December 31, 2024			$	6.1					$	3.9					$	9.4					$	3.0					$	0.4											$	22.8

F-23

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

			Year Ended December 31, 2023
			CoStar						Information Services						Multifamily						LoopNet						Other Marketplaces												Total
Beginning balance at December 31, 2022			$	4.5					$	1.1					$	4.3					$	1.4					$	0.9											$	12.2
Current-period provision (release) for expected credit losses			22.1						1.4						4.9						6.0						0.6												35.0
Write-offs charged against the allowance, net of recoveries and other			(16.9)						—						(1.9)						(4.7)						(0.5)												(24.0)
Ending balance at December 31, 2023			$	9.7					$	2.5					$	7.3					$	2.7					$	1.0											$	23.2

			Year Ended December 31, 2022
			CoStar						Information Services						Multifamily						LoopNet						Other Marketplaces												Total
Beginning balance at December 31, 2021			$	5.4					$	1.8					$	3.4					$	2.0					$	0.8											$	13.4
Current-period provision for expected credit losses			9.2						(0.6)						5.8						3.8						0.1												18.3
Write-offs charged against the allowance, net of recoveries and other			(10.1)						(0.1)						(4.9)						(4.4)						—												(19.5)
Ending balance at December 31, 2022			$	4.5					$	1.1					$	4.3					$	1.4					$	0.9											$	12.2

Credit loss expense is included in general and administrative expenses on the consolidated statements of operations. Credit loss expense related to contract assets was not material for the years ended December 31, 2024, 2023, and 2022. The majority of the Residential portfolio segment revenue is e-commerce based and does not result in accounts receivable.

5. ACQUISITIONS

Matterport

On April 21, 2024, the Company entered into the Matterport Merger Agreement with Matterport, subject to the terms and conditions of which, each share of Matterport Common Stock issued and outstanding immediately prior to the effective time of the First Merger (the “First Effective Time”) (other than any cancelled shares or Dissenting Shares (as defined in the Matterport Merger Agreement)) will be converted into (i) a number of CoStar Group Shares equal to the Merger Exchange Ratio (such consideration, the “Per Share Stock Consideration”) and (ii) $2.75 in cash per share, without interest (the “Per Share Cash Consideration”). Holders of Matterport Common Stock will receive cash in lieu of fractional CoStar Group Shares (the “Fractional Share Consideration” and, together with the Per Share Stock Consideration and the Per Share Cash Consideration, collectively, the “Matterport Merger Consideration”).

Consummation of the Mergers is subject to certain customary conditions, including, among others, expiration or termination of the applicable waiting periods under the HSR Act and the Antitrust Laws (each as defined in the Matterport Merger Agreement) of certain other jurisdictions, the absence of any law, injunction, order, or award restraining, enjoining, or otherwise prohibiting or making illegal the consummation of the Mergers. Each party’s obligation to consummate the Mergers is subject to certain other conditions, including the accuracy of the representations and warranties of the other party, compliance in all material respects by the other party with its obligations under the Matterport Merger Agreement, and the absence of a material adverse effect related to the other party. Consummation of the Mergers is not subject to approval by our stockholders or to any financing condition.

On July 3, 2024, Matterport and CoStar Group each received a request for additional information and documentary materials (the “Second Request”) from the FTC in connection with the FTC’s review of the Transaction. The effect of the

F-24

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Second Request is to extend the waiting period imposed by the HSR Act until 30 days after Matterport and CoStar Group have each substantially complied with their respective Second Requests, unless that period is extended or terminated sooner by the FTC. Matterport and CoStar Group certified they were in substantial compliance with the Second Request in November 2024 and January 2025, respectively. Each of Matterport and CoStar Group continue to work cooperatively with the FTC in its review of the Transaction and expect that the Transaction will be completed in the first quarter of 2025, subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction or waiver of the other closing conditions specified in the Matterport Merger Agreement.

The Matterport Merger Agreement requires the Company to pay an $85 million fee to Matterport in the event the Matterport Merger Agreement is terminated under specified circumstances, including, among others: if certain antitrust approvals are not obtained or a governmental order related to antitrust or competition matters prohibits the consummation of the transaction. The Company intends to fund the cash consideration with cash on hand and expects the transaction to close in the first quarter of 2025. The cash consideration is estimated to be $940 million and the stock consideration would require the issuance of approximately 11.2 million CoStar Group Shares using the share price of the Company at April 19, 2024, not considering Fractional Share Consideration. In addition, awards of restricted stock units relating to Matterport grants that are outstanding at the time of the First Merger will be converted into a corresponding award of CoStar Group Shares based on the Matterport Merger Consideration.

Visual Lease

In November 2024 CoStar acquired Visual Lease for total consideration of $276.0 million, in accordance with the terms under the Visual Lease Merger Agreement. Visual Lease is the operator of a SaaS platform for integrated lease management and lease accounting.

The following table summarizes the amounts recorded for acquired assets and assumed liabilities recorded at their fair value as of the closing date of the acquisition (in millions):

			Preliminary: November 1, 2024
Cash and cash equivalents			$	5.2
Accounts receivable			4.2
Long-term deferred tax assets			5.3
Goodwill			148.0
Intangible assets			135.9
Deferred revenue			(22.4)
Other assets and liabilities			(0.2)
Fair value of identifiable net assets acquired			$	276.0

The net assets of Visual Lease were recorded at their estimated fair values. In valuing the acquired assets and assumed liabilities, fair value estimates were based primarily on future expected cash flows, market rate assumptions for contractual obligations, and appropriate discount rates. The purchase price allocation is preliminary, subject primarily to the Company's assessment of certain tax matters and contingencies. The key assumptions used in the valuation include discount rates, projected revenue growth rates, customer attrition rates, and profit margins.

F-25

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the fair values (in millions) of the identifiable intangible assets acquired in the Visual Lease Acquisition included in the Company's North America operating segment, their related estimated useful lives (in years), and their respective amortization methods:

			Estimated Fair Value						Estimated Useful Life						Amortization Method
Customer base			$	119.3					15						Accelerated
Trade name			1.3						5						Straight-line
Software technology			1.5						3						Straight-line
Database technology			13.8						7.5						Straight-line
Total intangible assets			$	135.9

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recorded as part of the Visual Lease Acquisition includes but is not limited to: (i) the expected synergies and other benefits that the Company believes will result from combining its operations with our CoStar Real Estate Manager operations and (ii) any intangible assets that do not qualify for separate recognition, such as the assembled workforce. The $148.0 million of goodwill recorded as part of the acquisition is associated with the Company's North America operating segment, of which $132.7 million is expected to be deductible for income tax purposes. Transaction costs associated with the Visual Lease Acquisition were $6.8 million.

OnTheMarket

On December 12, 2023, CoStar UK acquired OnTheMarket, the operator of onthemarket.com, a U.K. residential property portal. At the time of closing, CoStar UK acquired all of the then issued ordinary share capital of OnTheMarket for cash consideration of 110 pence per share or £94.0 million ($117.9 million). OnTheMarket had certain share option contracts that had not been exercised at the time of closing for which CoStar UK has established a liability for £2.0 million ($2.5 million). This resulted in total consideration of £96.0 million ($120.4 million). Certain shares outstanding at the time of the closing resulted from contracts held by employees of OnTheMarket or its subsidiaries that required OnTheMarket to withhold income and employment taxes of £4.0 million ($5.1 million) which represented consideration payable at December 31, 2023 and were remitted in January 2024.

The following table summarizes the amounts recorded for acquired assets and assumed liabilities recorded at their fair value as of the closing date of the acquisition (in millions):

						Preliminary: December 12, 2023						Measurement Period Adjustments						Final
Cash and cash equivalents						$	18.2					$	—					$	18.2
Accounts receivable						2.3						0.4						2.7
Goodwill						62.8						(1.1)						61.7
Intangible assets						55.2						—						55.2
Accrued expenses						(12.7)						1.3						(11.4)
Accrued wages and commissions						(2.0)						—						(2.0)
Deferred income taxes, net						(3.0)						(0.1)						(3.1)
Other assets and liabilities						(0.4)						(0.5)						(0.9)
Fair value of identifiable net assets acquired						$	120.4					$	—					$	120.4

The net assets of OnTheMarket were recorded at their estimated fair values. In valuing the acquired assets and assumed liabilities, fair value estimates were based primarily on future expected cash flows, market rate assumptions for contractual obligations and appropriate discount rates. The estimated fair value of the customer base assets incorporated significant assumptions that had a material impact on the estimated fair value, such as discount rates, projected revenue growth rates, customer attrition rates, and profit margins.

F-26

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the fair values (in millions) of the identifiable intangible assets acquired in the OnTheMarket Acquisition included in the Company's International operating segment, their related estimated useful lives (in years), and their respective amortization methods:

			Estimated Fair Value						Estimated Useful Life						Amortization Method
Customer base			$	42.0					8						Accelerated
Trade name			10.2						15						Straight-line
Technology			3.0						2						Straight-line
Total intangible assets			$	55.2

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recorded as part of the OnTheMarket Acquisition includes, but is not limited to: (i) the expected synergies and other benefits that the Company believes will result from combining its operations with international operations and (ii) any intangible assets that do not qualify for separate recognition, such as the assembled workforce. The $61.7 million of goodwill recorded as part of the acquisition is associated with the Company's International operating segment, of which none is expected to be deductible for income tax purposes. Transaction costs associated with the OnTheMarket Acquisition were $11.0 million.

Business Immo

In April 2022, the Company acquired Business Immo, a leading commercial real estate news service provider in France, for €5.8 million ($6.3 million), net of cash acquired and the assumption of outstanding debt. As part of the acquisition, the Company recorded goodwill and intangible assets of $7.1 million and $3.9 million, respectively. The net assets of Business Immo were recorded at their estimated fair value. The net assets of Business Immo were recorded at their estimated fair value. The Company retired the assumed debt in the second quarter of 2022.

Pro Forma Financial Information (unaudited)

The unaudited pro forma financial information presented below reflects the consolidated results of operations of the Company assuming the OnTheMarket Acquisition had taken place on January 1, 2022 and was as follows (in millions, except per share data):

			Year Ended December 31,
			2023						2022
Revenue			$	2,494.0					$	2,224.3
Net income			$	371.9					$	361.9
Net income per share - basic			$	0.91					$	0.91
Net income per share - diluted			$	0.91					$	0.91

The impact of the OnTheMarket Acquisition on the Company's revenue and net income in the consolidated statements of operations from December 12, 2023 through December 31, 2023 was not material.

F-27

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma financial information presented below reflects the consolidated results of operations of the Company assuming the Visual Lease Acquisition had taken place on January 1, 2023 and was as follows (in millions, except per share data):

			Year Ended December 31,
			2024						2023
Revenue			$	2,769.0					$	2,490.6
Net income			$	135.0					$	357.3
Net income per share - basic			$	0.33					$	0.88
Net income per share - diluted			$	0.33					$	0.88

Revenue and net income attributable to Visual Lease from November 1, 2024 through December 31, 2024 was not material.

The pro forma financial information of the Business Immo Acquisition was not material.

6. INVESTMENTS AND FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. There is a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company's financial assets comprise Level 1 cash equivalents with original maturities of three months or less in the amount of $4.5 billion and $5.1 billion as of December 31, 2024 and 2023, respectively. The Company had no Level 2 or Level 3 financial assets measured at fair value as of December 31, 2024 and 2023.

The Company holds other financial instruments, including cash deposits, accounts receivable, accounts payable, accrued expenses, and Senior Notes. The carrying value for such financial instruments, other than the Senior Notes, each approximated their fair values as of December 31, 2024 and 2023. The estimated fair value of the Company's outstanding Senior Notes using quoted prices from the over-the-counter markets, considered Level 2 inputs, was $0.9 billion and $0.9 billion as of December 31, 2024 and 2023, respectively.

7. LEASES

The Company has operating and finance leases for its office facilities, data centers, and certain vehicles, as well as finance leases for office equipment. The Company's leases have remaining terms up to ten years. The leases contain various renewal and termination options. The period that is subject to an option to extend the lease is included in the lease term if it is reasonably certain that the option will be exercised. The period that is subject to an option to terminate the lease is included if it is reasonably certain that the option will not be exercised.

F-28

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease costs related to the Company's operating and finance leases included in the consolidated statements of operations were as follows (in millions):

			Year Ended December 31,
			2024						2023						2022
Operating lease costs:
Cost of revenues			$	10.1					$	10.0					$	8.4
Software development			8.5						6.3						7.2
Selling and marketing (excluding customer base amortization)			15.1						15.4						12.6
General and administrative			7.3						4.0						5.4
Total operating lease costs			41.0						35.7						33.6
Finance lease costs:
Amortization of ROU assets			4.7						0.8						—
Interest on lease liabilities			1.4						0.2						—
Total finance lease costs			6.1						1.0						—
Total lease costs			$	47.1					$	36.7					$	33.6

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 revenue in the consolidated statements of operations. The impact of lease costs related to short-term leases was not material for the years ended December 31, 2024, 2023, and 2022.

Supplemental balance sheet information related to operating leases was as follows (in millions):

						Year Ended December 31,
Balance			Balance Sheet Location			2024						2023
Operating lease liabilities						$	138.9					$	109.9
Less: imputed interest						18.2						7.0
Present value of lease liabilities						120.7						102.9
Less: current portion of lease liabilities			Lease liabilities			27.0						36.9
Long-term lease liabilities			Lease and other long-term liabilities			$	93.7					$	66.0
Weighted-average remaining lease term in years						5.6						3.9
Weighted-average discount rate						4.4		%				3.6		%
ROU Assets			Lease right-of-use assets			$	103.0					$	79.8
Finance lease liabilities						$	16.6					$	14.6
Less: imputed interest						1.6						1.6
Present value of lease liabilities						15.0						13.0
Less: current portion of lease liabilities			Lease liabilities			5.0						3.1
Long-term lease liabilities			Lease and other long-term liabilities			$	10.0					$	9.9
Weighted-average remaining lease term in years						3.0						3.8
Weighted-average discount rate						6.4		%				7.8		%
ROU Assets			Property and equipment, net			$	15.7					$	10.8

F-29

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to leases was as follows (in millions):

			Year Ended December 31,
			2024						2023						2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases			$	46.8					$	44.9					$	41.6
Operating cash flows used in finance leases			$	1.1					$	0.2					$	—
Financing cash flows used in finance leases			$	5.1					$	0.7					$	—
ROU assets obtained in exchange for new lease obligations:
Operating leases			$	57.2					$	29.1					$	20.0
Finance leases			$	7.2					$	13.6					$	—

8. PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in millions):

			December 31,
			2024						2023
Leasehold improvements			$	81.5					$	82.3
Furniture, office equipment, and vehicles			72.9						70.4
Computer hardware and software			53.7						56.3
Aircraft			66.7						44.2
Land			69.8						52.2
Construction in progress			431.8						163.7
Buildings			373.4						108.6
Property and equipment, gross			1,149.8						577.7
Accumulated depreciation and amortization			(134.9)						(105.5)
Property and equipment, net			$	1,014.9					$	472.2

Depreciation expense for property and equipment was approximately $57.2 million, $33.8 million and $29.1 million, for the years ended December 31, 2024, 2023, and 2022, respectively. For the years ended December 31, 2024 and 2023, the Company removed $27.3 million and $14.1 million, respectively, of property and equipment that was fully depreciated from property and equipment, gross and accumulated depreciation and amortization, which had no impact on the Company's financial results.

Included in the table above are $266.0 million and $13.1 million of buildings and improvements and accumulated depreciation and amortization, respectively, related to operating leases where The Company is the lessor as of December 31, 2024.

F-30

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. GOODWILL

The changes in the carrying amount of goodwill by operating segment consist of the following (in millions):

			North America						International						Total
Goodwill, December 31, 2022			$	2,149.2					$	165.6					$	2,314.8
Acquisitions, including measurement period adjustments(1)			—						62.8						62.8
Effect of foreign currency translation			—						8.6						8.6
Goodwill, December 31, 2023			2,149.2						237.0						2,386.2
Acquisitions, including measurement period adjustments(2)			148.0						(1.1)						146.9
Effect of foreign currency translation			—						(5.5)						(5.5)
Goodwill, December 31, 2024			$	2,297.2					$	230.4					$	2,527.6
__________________________

(1) International goodwill generated during the year ended December 31, 2023 from the OnTheMarket Acquisition was $62.8 million.

(2) North America goodwill generated during the year ended December 31, 2024 from the Visual Lease Acquisition was $148.0 million.

The Company expects $132.7 million of goodwill generated from acquisitions completed in 2024 to be deductible for tax purposes. Goodwill generated from acquisitions completed in 2023 were not deductible for tax purposes.

No impairments of the Company's goodwill were recognized during each of the years ended December 31, 2024, 2023, and 2022.

10. INTANGIBLE ASSETS

Intangible assets consist of the following (in millions, except amortization period data):

			December 31,												Weighted- Average Amortization Period (in years)
			2024						2023
Acquired database technology			$	47.4					$	36.3					6
Accumulated amortization			(24.7)						(21.0)
Acquired database technology, net			22.7						15.3
Acquired customer base			556.9						509.5						11
Accumulated amortization			(304.1)						(330.7)
Acquired customer base, net			252.8						178.8
Acquired trade names and other			240.8						258.9						13
Accumulated amortization			(141.4)						(139.3)
Acquired trade names and other, net			99.4						119.6
Acquired above-market leases			41.5						—						9
Accumulated amortization			(9.3)						—
Acquired above-market leases, net			32.2						—
Acquired in-place leases			32.0						—						9
Accumulated amortization			(5.9)						—
Acquired in-place leases, net			26.1						—
Intangible assets, net			$	433.2					$	313.7

F-31

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amortization expense for intangible assets was approximately $89.7 million, $73.7 million and $102.6 million for the years ended December 31, 2024, 2023, and 2022, respectively. For the years ended December 31, 2024, 2023, and 2022, the Company removed $91.7 million, $7.4 million, and $87.7 million, respectively, of intangible assets that were fully amortized from the acquired intangible assets and accumulated amortization, which had no impact on the Company's financial results.

In the aggregate, the Company expects the future amortization expense for intangible assets existing as of December 31, 2024 to be approximately $81.9 million, $68.7 million, $58.9 million, $49.3 million and $40.4 million for the years ending December 31, 2025, 2026, 2027, 2028, and 2029, respectively.

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. No impairments of the Company's intangible assets were recognized during each of the years ended December 31, 2024, 2023, and 2022. The Company decided to eliminate usage fees related to agent access to a legacy product charged to a specific customer class. This resulted in an acceleration of $16.3 million of amortization expense in 2022 for acquired customer base for this customer class.

11. LONG-TERM DEBT

The table below presents the components of outstanding debt (in millions):

			December 31,
			2024						2023
2.800% Senior Notes due July 15, 2030			$	1,000.0					$	1,000.0
2020 Credit Agreement, due July 1, 2025									—
2024 Credit Agreement, due May 24, 2029			—
Total face amount of long-term debt			1,000.0						1,000.0
Senior Notes unamortized discount and issuance costs			(8.1)						(9.5)
Long-term debt, net			991.9						990.5

Senior Notes

On July 1, 2020, the Company issued $1.0 billion aggregate principal amount of 2.800% Senior Notes due July 15, 2030. The Senior Notes were sold to a group of financial institutions as initial purchasers who subsequently resold the Senior Notes to non-U.S. persons pursuant to Regulation S under the Securities Act, and to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act at a purchase price equal to 99.921% of their principal amount. Interest on the Senior Notes is payable semi-annually in arrears on January 15 and July 15. The Senior Notes may be redeemed in whole or in part by the Company (a) at any time prior to April 15, 2030 at a redemption price equal to 100% of the principal amount of the Senior Notes, plus the Applicable Premium (as calculated in accordance with the indenture governing the Senior Notes), and any accrued and unpaid interest, if any, on the principal amount of Senior Notes being redeemed to, but excluding, the redemption date, and (b) on or after April 15, 2030 at a redemption price equal to 100% of the principal amount of the Senior Notes, plus any accrued and unpaid interest, if any, on the principal amount of Senior Notes being redeemed to, but excluding, the redemption date. The Company’s obligations under the Senior Notes are guaranteed on a senior, unsecured basis by the Company’s domestic wholly owned subsidiaries and the indenture governing the Senior Notes contains covenants, events of default, and other customary provisions with which the Company was in compliance as of December 31, 2024.

Revolving Credit Facility

On May 24, 2024, the Company entered into the 2024 Credit Agreement, which provides for a $1.1 billion revolving credit facility with a term of five years (maturing May 24, 2029), and a letter of credit sublimit of $20 million from a syndicate of financial institutions and issuing banks. The 2024 Credit Agreement replaces the Company's 2020 Credit Agreement.

Borrowings bear interest at a floating rate, which can be, at the Company’s option, either (a) an alternate base rate plus an applicable rate ranging from 0.125% to 0.750% or (b) a Term SOFR, SONIA rate, or EURIBOR for the specified interest period plus an applicable rate ranging from 1.125% to 1.750%, in each case depending on the Company’s Debt Rating (as defined in the 2024 Credit Agreement).

The 2024 Credit Agreement contains customary affirmative covenants for transactions of this type, including, among others, the provision of financial and other information to the administrative agent, notice to the administrative agent upon the

F-32

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

occurrence of certain material events, preservation of existence, maintenance of properties, and compliance with laws, including environmental laws, subject to certain exceptions. The 2024 Credit Agreement contains customary negative covenants, including, among others, restrictions on the ability of the Company and its subsidiaries to merge and consolidate with other companies, restrictions on the ability of certain subsidiaries to incur indebtedness, and restrictions on the ability of the Company and certain subsidiaries to grant liens or security interests on assets, subject to certain exceptions. The 2024 Credit Agreement contains a financial maintenance covenant that requires the Company to maintain a Total Leverage Ratio (as defined in the 2024 Credit Agreement) of less than or equal to 4.50 to 1.00, tested at the end of each fiscal quarter. The 2024 Credit Agreement also provides for a number of customary events of default, including, among others: payment defaults to the Lenders, voluntary and involuntary bankruptcy proceedings, covenant defaults, material inaccuracies of representations and warranties, cross-acceleration to other material indebtedness, certain change of control events, material money judgments, and other customary events of default. The occurrence of an event of default could result in the acceleration of obligations and the termination of lending commitments under the 2024 Credit Agreement. The Company was in compliance with the covenants in the 2024 Credit Agreement as of December 31, 2024. As of December 31, 2024, the Company had no amounts drawn under this facility.

The Company had $3.8 million and $1.6 million of deferred debt issuance costs related to the revolving credit facility as of December 31, 2024 and 2023, respectively. These amounts are included in deposits and other assets on the Company's consolidated balance sheets.

For the years ended December 31, 2024, 2023, and 2022, the Company recognized interest expense as follows (in millions):

			Year Ended December 31,
			2024						2023						2022
Interest on outstanding borrowings			$	28.0					$	28.0					$	28.0
Amortization of Senior Notes discount and issuance costs			2.8						2.4						2.3
Interest capitalized for construction in progress			(6.3)						(1.6)						—
Commitment fees and other			2.9						2.6						2.0
Total interest expense			$	27.4					$	31.4					$	32.3

12. INCOME TAXES

The components of the provision for income taxes attributable to operations consist of the following (in millions):

			Year Ended December 31,
			2024						2023						2022
Current:
Federal			$	90.7					$	126.3					$	116.3
State			28.0						36.6						31.2
Foreign			2.8						0.9						0.7
Total current			121.5						163.8						148.2
Deferred:
Federal			(42.1)						(31.7)						(20.4)
State			(8.4)						(2.9)						(9.6)
Foreign			0.4						(2.6)						(1.2)
Total deferred			(50.1)						(37.2)						(31.2)
Total provision for income taxes			$	71.4					$	126.6					$	117.0

F-33

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of deferred tax assets and liabilities consist of the following (in millions):

			December 31,
			2024						2023
Deferred tax assets:
Allowance for credit losses			$	5.1					$	5.8
Accrued compensation			13.0						11.9
Stock compensation			15.0						15.3
Net operating losses			49.9						34.7
Accrued reserve and other			19.6						5.8
Lease liabilities			26.2						21.8
Capitalized research and development costs			140.0						92.4
Research and development credits			5.1						4.5
Total deferred tax assets, prior to valuation allowance			273.9						192.2
Valuation allowance			(33.3)						(9.0)
Total deferred tax assets, net of valuation allowance			240.6						183.2
Deferred tax liabilities:
Deferred commission costs, net			(42.8)						(42.3)
Lease right-of-use assets			(16.2)						(16.0)
Prepaid expenses			(5.2)						(4.1)
Property and equipment, net			(9.4)						(25.1)
Intangible assets, net			(144.0)						(128.1)
Total deferred tax liabilities			(217.6)						(215.6)
Net deferred tax assets (liabilities)			$	23.0					$	(32.4)

For both the years ended December 31, 2024 and 2023, the Company has not recognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries that were deemed permanently reinvested. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, depends on certain circumstances existing if and when remittance occurs. A deferred tax liability will be recognized if and when the Company no longer plans to permanently reinvest these undistributed earnings.

As of both December 31, 2024 and 2023, a valuation allowance has been established for certain deferred tax assets due to the uncertainty of realization. The valuation allowance as of both December 31, 2024 and 2023 includes an allowance for acquired net operating losses and foreign deferred tax assets.

The Company established the valuation allowance because it is more likely than not that a portion of the deferred tax asset for certain items will not be realized based on the weight of available evidence. A valuation allowance was established for the foreign deferred tax assets due to the cumulative loss in recent years in those jurisdictions. The Company has not had sufficient taxable income historically to utilize the foreign deferred tax assets, and it is uncertain whether the Company will generate sufficient taxable income in the future to utilize the deferred tax assets. The Company has established a valuation allowance for certain acquired net operating losses where Section 382 limitations will impact the ability of the Company to utilize the net operating losses before they expire.

The Company’s change in valuation allowance was an increase of approximately $24.3 million for the year ended December 31, 2024 and an increase of approximately $3.8 million for the year ended December 31, 2023. The increases for the years ended December 31, 2024 and 2023 were primarily due to increases in foreign net operating loss deferred tax assets for which a full valuation allowance has been established.

The Company had U.S. income before income taxes of approximately $293.8 million, $526.7 million, and $493.2 million for the years ended December 31, 2024, 2023, and 2022, respectively. The Company had foreign losses before income taxes of

F-34

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

approximately $83.7 million, $25.4 million, and $6.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The Company’s provision for income taxes resulted in effective tax rates that varied from the statutory federal income tax rate as follows (in millions):

			Year Ended December 31,
			2024						2023						2022
Expected federal income tax provision at statutory rate			$	44.1					$	105.3					$	102.1
State income taxes, net of federal benefit			18.4						27.4						21.5
Increase (decrease) in valuation allowance			22.0						1.9						(0.5)
Foreign tax rate differential			(3.3)						(1.0)						(0.3)
Research credits			(28.9)						(20.2)						(17.5)
Excess tax benefit			(1.8)						(5.9)						(1.8)
Tax reserves			6.8						4.2						1.5
Nondeductible compensation			9.2						8.8						11.4
Other adjustments			4.9						6.1						0.6
Income tax expense			$	71.4					$	126.6					$	117.0

The Company has net operating loss carryforwards for international income tax purposes of approximately $147.2 million that do not expire. The Company has federal net operating loss carryforwards of approximately $58.9 million that begin to expire in 2033, state net operating loss carryforwards with a tax value of approximately $0.4 million that begin to expire in 2033 and state income tax credit carryforwards with a tax value of approximately $8.0 million primarily relating to state research and development credits and the D.C. qualified high technology company tax credit that began to expire in 2024. The Company realized a cash benefit relating to the use of its tax loss carryforwards of approximately $3.3 million, $5.9 million, and $12.6 million in December 31, 2024, 2023, and 2022, respectively.

The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions):

Unrecognized tax benefit as of December 31, 2021			$	14.8
Increase for current year tax positions			3.4
Increase for prior year tax positions			0.3
Expiration of the statute of limitation for assessment of taxes			(2.3)
Unrecognized tax benefit as of December 31, 2022			16.2
Increase for current year tax positions			4.4
Increase for prior year tax positions			1.7
Expiration of the statute of limitation for assessment of taxes			(2.4)
Unrecognized tax benefit as of December 31, 2023			19.9
Increase for current year tax positions			5.8
Increase for prior year tax positions			4.7
Expiration of the statute of limitation for assessment of taxes			(3.8)
Unrecognized tax benefit as of December 31, 2024			$	26.6

Approximately $26.6 million and $19.9 million of the unrecognized tax benefits as of December 31, 2024 and 2023, respectively, would favorably affect the annual effective tax rate if recognized in future periods. The increase for current year tax positions of $5.8 million and increase for prior year tax positions of $4.7 million for the year ended December 31, 2024 were primarily attributable to research credits. The decrease for expiration of the statute of limitation of $3.8 million for the year ended December 31, 2024 was attributable to research credits. The Company recognized $1.0 million, $0.7 million, and $0.1 million for interest and penalties in its consolidated statements of operations for the years ended December 31, 2024, 2023, and 2022, respectively. The Company had liabilities of $2.4 million, $1.4 million, and $0.7 million for interest and penalties in its consolidated balance sheets as of December 31, 2024, 2023, and 2022, respectively. The Company does not anticipate the amount of the unrecognized tax benefits will change significantly over the next 12 months.

F-35

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is subject to taxation in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company’s federal income tax returns for tax years 2021 through 2023 remain open to examination. Most of the Company’s state income tax returns for tax years 2021 through 2023 remain open to examination. For states that have a four-year statute of limitations, the state income tax returns for tax years 2020 through 2023 remain open to examination. The Company’s U.K. income tax return for tax year 2023 remains open to examination. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations.

13. COMMITMENTS AND CONTINGENCIES

The following summarizes the Company's significant contractual obligations, including related payments due by period, as of December 31, 2024 (in millions):

Year Ending December 31,						Operating lease obligations						Finance lease obligations						Long-term debt principal interest payments						Long-term debt principal payments
2025						$	31.8					$	5.4					$	28.0					$	—
2026						24.2						5.9						28.0						—
2027						22.7						4.9						28.0						—
2028						21.5						0.4						28.0						—
2029						13.5						—						28.0						—
Thereafter						25.2						—						28.0						1,000.0
Total						$	138.9					$	16.6					$	168.0					$	1,000.0

The Company leases office facilities under various non-cancelable operating leases, as well as data centers and vehicles under finance lease arrangements. The leases contain various renewal options.

See Note 7 for further discussion of the Company's lease commitments.

Currently, and from time to time, the Company is involved in litigation incidental to the conduct of its business. The Company records a provision for a liability when it is both probable that a liability has been incurred and the amount can be reasonably estimated. While it is reasonably possible that an unfavorable outcome may occur as a result of one or more of the Company’s current litigation matters, at this time management has concluded that the resolutions of these matters are not expected to have a material effect on the Company's consolidated financial position, future results of operations or liquidity. Legal defense costs are expensed as incurred.

14. SEGMENT REPORTING

Segment Information

The Company manages its business geographically in two operating segments and two reportable segments, with the primary areas of measurement and decision-making being North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific, and Latin America. The Company is domiciled in the U.S. and all revenues earned in the U.S. are recorded in the North America Segment. The amount of revenues earned in Canada was immaterial for the years ended December 31, 2024, 2023, and 2022. Segment reporting is based on the management approach, whereby external segment reporting is aligned with the internal reporting used by the CODM, which is the Company’s Chief Executive Officer. The CODM relies on an internal management reporting process that provides revenue and operating segment EBITDA for making decisions and assessing performance as the source of the Company’s reportable segments. EBITDA is used by management internally to measure operating and management performance and to evaluate the performance of the business.

F-36

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summarized EBITDA information by operating segment consists of the following (in millions):

			Year Ended December 31,
			2024																		2023																		2022
			North America						International						Total						North America						International						Total						North America						International						Total
Revenues (1)			$	2,599.8					$	136.4					$	2,736.2					$	2,365.7					$	89.3					$	2,455.0					$	2,106.0					$	76.4					$	2,182.4
Less:
Personnel			1,104.0						95.3						1,199.3						971.4						66.2						1,037.6						809.6						53.2						862.8
Marketing			792.0						67.4						859.4						548.0						11.9						559.9						318.1						5.0						323.1
General and administrative (2)			522.3						32.2						554.5						443.3						24.4						467.7						401.0						12.8						413.8
EBITDA			$	181.5					$	(58.5)					$	123.0					$	403.0					$	(13.2)					$	389.8					$	577.3					$	5.4					$	582.7
__________________________
(1) See Note 3 for details of revenue disaggregated by segment.
(2) Excludes personnel costs

The following summarizes stock-based compensation, which is a significant non-cash item included in the personnel costs above, by segment (in millions):

			Year Ended December 31,
			2024						2023						2022
North America			$	83.7					$	81.0					$	71.9
International			5.3						4.0						3.4
Total			$	89.0					$	85.0					$	75.3

The reconciliation of EBITDA to income before income tax expense consists of the following (in millions):

			Year Ended December 31,
			2024						2023						2022
EBITDA			$	123.0					$	389.8					$	582.7
Amortization of acquired intangible assets in cost of revenues			(29.9)						(31.5)						(29.0)
Amortization of acquired intangible assets in operating expenses			(44.3)						(42.2)						(73.6)
Depreciation and other amortization			(44.1)						(33.8)						(29.1)
Interest income, net			212.5						213.6						32.1
Other (expense) income, net (1)			(7.1)						5.4						3.4
Income before income tax expense			$	210.1					$	501.3					$	486.5
__________________________
(1) Includes $28.6 million of amortization and depreciation expense associated with lessor activities for the year ended December 31, 2024.

F-37

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summarized information by operating segment consists of the following (in millions):

			December 31,
			2024						2023
Property and equipment, net
North America			$	1,006.7					$	465.7
International			8.2						6.5
Total property and equipment, net			$	1,014.9					$	472.2
Goodwill
North America			$	2,297.2					$	2,149.2
International			230.4						237.0
Total goodwill			$	2,527.6					$	2,386.2
Assets
North America			$	8,852.0					$	8,505.5
International			404.8						414.2
Total assets			$	9,256.8					$	8,919.7
Liabilities
North America			$	1,603.0					$	1,499.7
International			100.3						81.4
Total liabilities			$	1,703.3					$	1,581.1

Cash flows for the years ended December 31, 2024, 2023, and 2022 relating to purchases of long-term assets, including acquisitions and campus expansions, primarily relate to the North America segment.

15. STOCKHOLDERS' EQUITY

Preferred Stock

The Company has 2 million shares of preferred stock, $0.01 par value, authorized for issuance. The Board of Directors may issue the preferred stock from time to time as shares of one or more classes or series.

Common Stock

The Company has 1.2 billion shares of common stock, $0.01 par value, authorized for issuance. Dividends may be declared and paid on the common stock, subject in all cases to the rights and preferences of the holders of preferred stock and authorization by the Board of Directors. In the event of liquidation or winding up of the Company and after the payment of all preferential amounts required to be paid to the holders of any series of preferred stock, any remaining funds shall be distributed among the holders of the issued and outstanding common stock.

Equity Offerings

On September 20, 2022, the Company completed a public equity offering of 10.7 million shares of common stock at an offering price of $70.38 per share. Net proceeds from the public equity offering were approximately $745.7 million, after deducting approximately $4.3 million of underwriting fees, commissions, and other stock issuance costs. The Company intends to use the net proceeds from the sale of the securities to fund all or a portion of the costs of any strategic acquisitions it pursues in the future, to finance the growth of its business, and for working capital and other general corporate purposes. General corporate purposes may include additions to working capital, capital expenditures, repayment of debt, investments in the Company’s subsidiaries and the repurchase, redemption, or retirement of securities, including the Company’s common stock.

F-38

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. NET INCOME PER SHARE

The following table sets forth the calculation of basic and diluted net income per share (in millions, except per share data):

			Year Ended December 31,
			2024						2023						2022
Numerator:
Net income			$	138.7					$	374.7					$	369.5
Denominator:
Denominator for basic net income per share — weighted-average outstanding shares			406.3						405.3						396.3
Effect of dilutive securities:
Stock options, restricted stock awards and restricted stock units			1.5						1.6						1.5
Denominator for diluted net income per share — weighted-average outstanding shares			407.8						406.9						397.8
Net income per share — basic			$	0.34					$	0.92					$	0.93
Net income per share — diluted			$	0.34					$	0.92					$	0.93

The following table summarizes the shares underlying the unvested performance-based restricted stock and anti-dilutive securities excluded from the basic and diluted earnings per share calculations (in millions):

			Year Ended December 31,
			2024						2023						2022
Performance-based restricted stock awards			0.1						0.2						0.4
Anti-dilutive securities			0.8						0.7						1.0

17. EMPLOYEE BENEFIT PLANS

Stock Incentive Plans

In April 2007, the Company’s Board of Directors adopted the CoStar Group 2007 Stock Incentive Plan (as amended, the “2007 Plan”), subject to stockholder approval, which was obtained on June 7, 2007. In April 2016, the Company’s Board of Directors adopted the CoStar Group 2016 Stock Incentive Plan (as amended, the “2016 Plan”), subject to stockholder approval, which was obtained on June 9, 2016. All shares of common stock that were authorized for issuance under the 2007 Plan that, as of June 9, 2016, remained available for issuance under the 2007 Plan (excluding shares subject to outstanding awards) were rolled into the 2016 Plan and, as of that date, no shares of common stock were available for new awards under the 2007 Plan. The 2007 Plan continues to govern vested unexercised stock options issued prior to June 9, 2016. Upon the occurrence of a Change of Control, as defined in the 2007 Plan, all outstanding unexercisable options under the 2007 Plan immediately become exercisable.

The 2016 Plan provides for the grant of stock options, restricted stock, restricted stock units, and stock appreciation rights to officers, employees, and directors of the Company and its subsidiaries. Stock options granted under the 2016 Plan may be non-qualified or may qualify as incentive stock options. Except in limited circumstances related to a merger or other acquisition, the exercise price for an option may not be less than the fair market value of the Company’s common stock on the date of grant. The vesting period for each grant of options, restricted stock, restricted stock units, and stock appreciation rights under the 2016 Plan is determined by the Board of Directors or a committee thereof and is generally three to four years, subject to minimum vesting periods for restricted stock and restricted stock units of at least one year. In some cases, vesting of awards under the 2016 Plan may be based on performance conditions. The Company initially reserved approximately 22.7 million shares of common stock for issuance under the 2016 Plan, which included shares of common stock that were authorized and remained available for issuance under the 2007 Plan as of June 9, 2016. Any shares of common stock subject to (a) outstanding awards under the 2007 Plan as of June 9, 2016 or (b) outstanding awards under the 2016 Plan after June 9, 2016, that cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised or settled in vested and nonforfeitable shares) will become authorized and unissued under the 2016 Plan. Pursuant to the terms of the 2016 Plan, all amounts reserved or issued under the plan were adjusted to reflect the Company’s ten-for-one

F-39

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

common stock split. Unless terminated sooner, the 2016 Plan will terminate in June 2026, but will continue to govern unexercised and unexpired awards issued under the 2016 Plan prior to that date. Approximately 12.3 million shares were available for future grant under the 2016 Plan as of December 31, 2024.

At December 31, 2024, there was approximately $142.1 million of unrecognized compensation cost related to stock incentive plans, net of estimated forfeitures, which the Company expects to recognize over a weighted-average-period of 2.5 years. The income tax benefit realized from stock-based compensation was $2.3 million, $6.8 million, and immaterial for the years ended December 31, 2024, 2023 and 2022, respectively.

See Notes 2 and 12 for further discussion of stock-based compensation expense and income taxes, respectively.

Stock Options

Option activity was as follows:

			Number of Shares						Range of Exercise Price						Weighted- Average Exercise Price						Weighted- Average Remaining Contract Life (in years)						Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2021			1,976,100						$10.22 - $91.98						$	39.18					6.24						$	80.8
Granted			202,100						$67.29						$	67.29
Outstanding at December 31, 2022			2,178,200						$10.22 - $91.98						$	41.79					5.60						$	79.6
Granted			140,800						$76.78						$	76.78
Exercised			(419,340)						$10.22 - $34.21						$	17.77
Outstanding at December 31, 2023			1,899,660						$20.49 - $91.98						$	46.69					5.53						$	72.4
Granted			152,900						$82.47						$	82.47
Exercised			(122,736)						$39.82 - $76.78						$	58.03
Canceled or expired			(25,234)						$67.29 - $76.78						$	72.66
Outstanding at December 31, 2024			1,904,590						$20.49 - $91.98						$	51.48					4.80						$	43.8
Exercisable at December 31, 2022			1,766,070						$10.22 - $91.98						$	34.40					4.96						$	76.5
Exercisable at December 31, 2023			1,571,105						$20.49 - $91.98						$	44.32					4.93						$	68.1
Exercisable at December 31, 2024			1,615,687						$20.49 - $91.98						$	46.75					4.15						$	43.6

The aggregate intrinsic value of outstanding options is calculated as the difference between (i) the closing price of the common stock at the end of the period and (ii) the exercise price of the underlying awards, multiplied by the number of outstanding options as of the end of the period that had an exercise price less than the closing price on that date. The aggregate intrinsic value of options exercised, determined as of the exercise date, was approximately $4.2 million and $24.3 million for the years ended December 31, 2024 and 2023, respectively. No options were exercised in the year ended December 31, 2022.

The Company estimated the fair value of each option granted on the date of grant using the Black-Scholes option-pricing model, using the assumptions in the following table:

			Year Ended December 31,
			2024						2023						2022
Dividend yield			0		%				0		%				0		%
Expected volatility			35		%				35		%				31		%
Risk-free interest rate			4.28		%				3.96		%				1.89		%
Expected life (in years)			5						5						5
Weighted-average grant date fair value			$	31.57					$	28.87					$	20.43

F-40

COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The expected dividend yield is determined based on the Company's past cash dividend history and anticipated future cash dividend payments. The Company has never declared nor paid any dividends on its common stock and does not anticipate paying any dividends on its common stock during the foreseeable future, but intends to retain any earnings for future growth of its business. Expected volatility is calculated based on historical volatility of the daily closing price of the Company's common stock over a period consistent with the expected life of the options granted. The risk-free interest rate is based on the U.S. Treasury rate with terms similar to the expected life of the options granted. The expected life for the options is determined based on multiple factors, including historical employee behavior patterns of exercising options and post-employment termination behavior as well as expected future employee option exercise patterns.

The following table summarizes information regarding options outstanding at December 31, 2024:

						Options Outstanding																		Options Exercisable
Range of Exercise Price						Number of Shares						Weighted-Average Remaining Contractual Life (in years)						Weighted- Average Exercise Price						Number of Shares						Weighted- Average Exercise Price
$20.49 - $27.35						346,000						2.16						$	20.49					346,000						$	20.49
$27.36 - $37.02						354,090						3.16						$	34.21					354,090						$	34.21
$37.03 - $53.24						343,000						4.10						$	39.82					343,000						$	39.82
$53.25 - $72.04						430,200						5.89						$	66.90					373,798						$	66.84
$72.05 - $91.98						431,300						7.75						$	84.40					198,799						$	88.94
						1,904,590						4.80						$	51.48					1,615,687						$	46.75

Restricted Stock Awards

The Compensation Committee of the Board of Directors of the Company historically approved grants of restricted common stock to employees and directors of the Company that vest over a specific service period and to executive officers that vest based on the achievement of certain performance conditions, primarily, the achievement of a three-year cumulative revenue goal established at the grant date. The grant of awards with performance conditions supports the Company’s goal of aligning executive incentives with long-term stockholder value and ensuring that executive officers have a continuing stake in the long-term success of the Company.

The vesting of restricted common stock is subject to continuing employment requirements. Certain performance-based restricted common stock awards are also subject to a market condition such that the actual number of shares that vest at the end of the respective three-year period is determined based on the Company’s achievement of performance goals and an established Company specific TSR factor relative to the S&P 500 Index over the same three-year performance period. At the end of the three-year performance period, if the performance condition is achieved at or above the pre-established threshold, the number of shares earned is further adjusted by a TSR payout percentage, which ranges between 80% and 120%, based on the Company’s TSR performance relative to that of S&P 500 Index over the respective three-year period.

The Company estimates the fair value of its equity awards with both a performance and market condition on the date of grant using a Monte-Carlo simulation valuation model. This pricing model uses multiple simulations to evaluate the probability of achieving the market condition to calculate the fair value of the awards. Expense is only recorded for awards that are expected to vest, net of estimated forfeitures. The assumptions used to estimate the fair value of awards with both a performance and a market condition were as follows:

			Year Ended December 31,
			2024						2023						2022
Dividend yield			0		%				0		%				0		%
Expected volatility			34		%				37		%				34		%
Risk-free interest rate			4.47		%				4.31		%				1.71		%
Expected life (in years)			3						3						3
Weighted-average grant date fair value			$	86.96					$	81.58					$	71.19

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COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The expected dividend yield is determined based on the Company's past cash dividend history and anticipated future cash dividend payments. The Company has never declared nor paid any dividends on its common stock and does not anticipate paying any dividends on its common stock during the foreseeable future, but intends to retain any earnings for future growth of its business. Expected volatility is calculated based on historical volatility of the daily closing price of the common stock of the companies within the S&P 500 Index over a period consistent with the expected life of the awards. The risk-free interest rate is based on the U.S. Treasury rate with terms similar to the expected life of the awards. The expected life is consistent with the performance measurement period of the awards.

As of December 31, 2024, the Company determined that it was probable that at least the minimum performance goals associated with restricted stock awards with performance and market conditions granted during 2024, 2023, and 2022 would be met by their forfeiture dates. The Company recorded a total of approximately $6.8 million, $13.6 million, and $11.9 million of stock-based compensation expense related to restricted stock awards with performance and market conditions for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, the Company expects to record an aggregate stock-based compensation expense of approximately $11.6 million for restricted stock awards with performance and market conditions over the periods 2025, 2026, and 2027.

The following table presents unvested restricted stock awards activity for the year ended December 31, 2024:

			Restricted Stock Awards — without Market Condition												Restricted Stock Awards — with Market Condition
			Number of Shares						Weighted-Average Grant Date Fair Value per Share						Number of Shares						Weighted-Average Grant Date Fair Value per Share
Unvested restricted stock awards at December 31, 2023			2,139,911						$	70.38					681,120						$	83.56
Granted			1,456,895						$	81.70					320,640						$	86.96
Vested			(789,329)						$	71.69					(128,000)						$	99.73
Canceled			(252,488)						$	73.81					(140,560)						$	87.38
Unvested restricted stock awards at December 31, 2024			2,554,989						$	76.19					733,200						$	81.49

Restricted Stock Units

The following table presents unvested restricted stock units activity for the year ended December 31, 2024:

			Number of Units						Weighted-Average Grant Date Fair Value per Share
Unvested restricted stock units at December 31, 2023			22,919						$	67.43
Granted			10,780						$	83.98
Vested			(7,768)						$	68.61
Canceled			(2,399)						$	76.66
Unvested restricted stock units at December 31, 2024			23,532						$	73.88

Management Stock Purchase Plan

The Board of Directors adopted the Company’s Management Stock Purchase Plan in December 2017 with the intent of providing selected key employees of the Company and its subsidiaries, including the Company's executive officers, the opportunity to defer a portion of their cash incentive compensation and to align management and stockholder interests through awards of DSUs under the MSPP and awards of Matching RSUs issued under the 2016 Plan. Under this plan participants are permitted to elect to defer up to 100% of their annual incentive bonus or commissions earned during the year by submitting an irrevocable election in accordance with Section 409A of the Internal Revenue Code, as amended. On the date the incentive bonus or commission would otherwise be paid in cash (typically during the following calendar year), the Company awards the

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COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

participant DSUs representing the number of shares of common stock with an aggregate fair market value on that date equal to the amount of compensation elected to be deferred under the MSPP. On the same date the DSUs are awarded, the participant receives a grant of Matching RSUs covering the number of shares of common stock equal up to 100% of the DSUs granted. The expense related to the DSUs is recognized on a straight-line basis during the period that the related incentive bonus or commission is earned. The Company granted 57,498 and 82,374 DSUs during the years 2024 and 2023, respectively. The expense related to the Matching RSUs is recognized over the four-year vesting period following the grant date.

The following tables presents the Matching RSU activity for the year ended December 31, 2024:

			Number of Matching RSU Shares						Weighted-Average Grant Date Fair Value per Share
Unvested MSPP restricted stock units at December 31, 2023			196,967						$	66.61
Granted			57,498						$	88.27
Vested			(20,420)						$	66.39
Canceled			(59,315)						$	71.30
Unvested MSPP restricted stock units at December 31, 2024			174,730						$	72.17

Employee 401(k) Plan

The Company maintains a 401(k) Plan as a defined contribution retirement plan for all eligible employees. The 401(k) Plan provides for tax-deferred contributions of employees’ salaries, limited to a maximum annual amount as established by the IRS. In addition to the traditional 401(k), effective January 1, 2015, eligible employees have the option of making an after-tax contribution to a Roth 401(k) plan or a combination of both. In each of 2024, 2023, and 2022, the Company matched 100% of employee contributions up to a maximum of 4% of total compensation. Amounts contributed to the 401(k) Plan by the Company to match employee contributions for the years ended December 31, 2024, 2023, and 2022 were approximately $26.2 million, $25.5 million, and $21.5 million, respectively. The Company had no administrative expenses in connection with the 401(k) Plan for each of the years ended December 31, 2024, 2023, and 2022.

Employee Pension Plan

The Company maintains a GPP Plan for all eligible employees in the Company’s U.K. offices. The GPP Plan is a defined contribution plan. Employees are eligible to contribute a portion of their salaries, subject to a maximum annual amount as established by Her Majesty's Revenue and Customs. In each of 2024, 2023, and 2022, the Company's matching contribution was based on the percentage contributed by the employee, up to a maximum of 6% of total compensation. Amounts contributed to the GPP Plan by the Company to match employee contributions for the years ended December 31, 2024, 2023, and 2022, were approximately $2.0 million, $1.2 million, and $1.0 million, respectively.

Registered Retirement Savings Plan

As of January 1, 2015, the Company introduced a RRSP for all eligible employees in the Company’s Canadian offices. In each of the years ended December 31, 2024, 2023, and 2022, the Company matched 100% of employee contributions up to a maximum of 4% of total compensation. Amounts contributed to the RRSP by the Company to match employee contributions were approximately $0.2 million, $0.2 million, and $0.1 million for both of the years ended December 31, 2024, 2023, and 2022, respectively.

Employee Stock Purchase Plan

As of August 1, 2006, the Company introduced an ESPP, pursuant to which eligible employees participating in the plan authorize the Company to withhold specified amounts from the employees’ compensation and use the withheld amounts to purchase shares of the Company's common stock at 90% of the market price. Participating employees are able to purchase common stock under this plan during each offering period. An offering period begins the second Saturday before each of the Company’s regular pay dates and ends on each of the Company’s regular pay dates. On June 2, 2021, the Company’s stockholders approved an amendment to the ESPP to increase the number of shares available for purchase under the ESPP by 1 million shares. The Company registered the issuance of these additional shares under the ESPP pursuant to the registration statement filed on July 28, 2021. There were 544,587 and 782,328 shares available for purchase under the ESPP as of

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COSTAR GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023, respectively, and approximately 237,741 and 227,939 shares of the Company’s common stock were purchased under the ESPP during 2024 and 2023, respectively.

18. SUBSEQUENT EVENTS

Stock Repurchase Program

In February 2025, the Board of Directors approved the Stock Repurchase Program which authorizes, but does not obligate, the repurchase of up to $500 million of the Company’s common stock. Repurchases may be made from time to time at management's discretion, and the timing and amount of any such repurchases will be determined based on share price, market conditions, legal requirements, and other relevant factors. The program has no time limit and can be discontinued at any time at the Company’s discretion. There can be no assurance as to the timing or number of shares of any repurchases in the future. Purchases of shares of the Company's common stock under the Stock Purchase Program will be recorded as treasury stock.

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