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Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2024
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______ to ______
Commission file number 0-24531
CoStar Group, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 52-2091509 | |||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 1331 L Street, NW | ||||||||
| Washington, | DC | 20005 |
(Ad**dress of principal executive offices) (Zip Code)
(202) 346-6500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
| Common Stock ($0.01 par value) | CSGP | Nasdaq Global Select Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | x | Accelerated filer | ☐ | ||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of October 21, 2024, there were 409,959,517 shares of the registrant’s common stock outstanding.
COSTAR GROUP, INC.
FORM 10-Q
TABLE OF CONTENTS
Glossary of Terms
The following abbreviations or acronyms used in this Quarterly Report on Form 10-Q (this "Report") are defined below:
| Abbreviation or Acronym | Definition | ||||
| 2020 Credit Agreement | The second amended and restated credit agreement, dated July 1, 2020, which amended and restated in its entirety the then-existing credit agreement originally entered into on April 1, 2014, as amended by the first amendment to the second amended and restated credit agreement, dated May 8, 2023 and was replaced by the 2024 Credit Agreement in May 2024 | ||||
| 2023 Form 10-K | CoStar Group's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 21, 2024 | ||||
| 2024 Credit Agreement | On May 24, 2024, the Company entered into a credit agreement replacing the Company’s 2020 Credit Agreement | ||||
| ASU | Accounting Standards Update | ||||
| Business Immo | The legal entity BIH, a French société par actions simplifiée, the owner and operator of Business Immo, a leading commercial real estate news service provider in France | ||||
| CECL | Current expected credit losses | ||||
| CODM | Chief Operating Decision Maker | ||||
| CoStar Group (also the “Company,” “we,” “us” or “our”) | The legal entity, CoStar Group, Inc., a Delaware corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of CoStar Group, Inc. and its consolidated subsidiaries | ||||
| CoStar Group Share | A share of the common stock of the Company, par value $0.01 per share | ||||
| CoStar UK | The legal entity, CoStar UK Limited, a wholly owned subsidiary of CoStar Group | ||||
| CRI | CoStar Realty Information, Inc., a Delaware corporation and wholly owned subsidiary of CoStar Group, Inc. | ||||
| DSUs | Deferred Stock Units | ||||
| EBITDA | Net income before interest income or expense, net; other income or expense, net; loss on debt extinguishment; income taxes; depreciation; and amortization | ||||
| ESG | Environmental, Social, and Governance | ||||
| ESPP | Employee Stock Purchase Plan | ||||
| EURIBOR | Euro Interbank Offered Rate | ||||
| FASB | Financial Accounting Standards Board | ||||
| FTC | The Federal Trade Commission | ||||
| GAAP | Generally accepted accounting principles in the U.S. | ||||
| GILTI | Global intangible low taxed income inclusion | ||||
| Homes Group | The legal entity Homes Group, LLC | ||||
| Homes.com | The flagship brand of our North American residential products and a homes for-sale listings site, which manages workflow and marketing for residential real estate agents and brokers and allows homebuyers to view residential property listings, research communities, and connect with real estate agents and brokers | ||||
| Homes.com Acquisition | CRI's acquisition of Homes.com completed on May 24, 2021 pursuant to a securities purchase agreement dated April 14, 2021 between Landmark, Homes Group, LLC, and CRI | ||||
| HSR Act | The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended | ||||
| Land.com Network | Our network of sites featuring rural lands for sale, including: Land.com, LandsofAmerica.com, LandAndFarm.com, and LandWatch.com | ||||
| Landmark | Landmark Media Enterprise, LLC | ||||
| LIBOR | London Interbank Offered Rate | ||||
| Matching RSUs | Awards of matching restricted stock units awarded under the Company's Management Stock Purchase Plan |
| Abbreviation or Acronym | Definition | ||||
| Matterport | Matterport, Inc., a Delaware corporation and provider of a technology platform that uses spatial data to transform physical buildings and spaces into dimensionally-accurate digital images | ||||
| Matterport Common Stock | Each share of Matterport Class A common stock, par value $0.0001 per share | ||||
| Merger Sub I | Matrix Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company | ||||
| Merger Sub II | Matrix Merger Sub II LLC, a Delaware limited liability company and wholly owned subsidiary of the Company | ||||
| Merger Exchange Ratio | A ratio determined based on the average of the volume-weighted average prices at which the CoStar Group Shares trade on Nasdaq Global Select Market for the 20 consecutive Trading Days (as defined in the Merger Agreement) ending on (and including) the Trading Day that is three Trading Days prior to the date of the First Effective Time (the “Average CoStar Group Share Price”) and shall be subject to a symmetrical collar, applied as follows: (i) if the Average CoStar Group Share Price is greater than or equal to $94.62 (the “Ceiling Price”), then the Merger Exchange Ratio shall be set at 0.02906; (ii) if the Average CoStar Group Share Price is less than or equal to $77.42 (the “Floor Price”), then the Merger Exchange Ratio shall be set at 0.03552; or (iii) if the Average CoStar Group Share Price is greater than the Floor Price and less than the Ceiling Price, then the Merger Exchange Ratio shall be equal to the quotient of (x) $2.75 divided by (y) the Average CoStar Group Share Price | ||||
| MLS | Multiple Listing Services | ||||
| MSPP | Management Stock Purchase Plan | ||||
| Neptune Merger Sub | Neptune V Merger Sub LLC, a Delaware limited liability company and a wholly-owned subsidiary of CRI | ||||
| OnTheMarket | The legal entity OnTheMarket Limited (formerly OnTheMarket Plc), the operator of onthemarket.com, a U.K. residential property portal | ||||
| OnTheMarket Acquisition | CoStar UK's acquisition of OnTheMarket completed in December 2023, pursuant to Rule 2.7 of the United Kingdom City Code on Takeovers and Mergers. The acquisition was implemented by means of a court-sanctioned scheme of arrangement under the U.K. Companies Act 2006 | ||||
| ROU | Right-of-use | ||||
| SaaS | Software as a service | ||||
| SEC | U.S. Securities and Exchange Commission | ||||
| Securities Act | Securities Act of 1933, as amended | ||||
| Senior Notes | 2.800% notes issued by CoStar Group, Inc. due July 15, 2030 | ||||
| SOFR | Secured Overnight Financing Rate | ||||
| SONIA | Sterling Overnight Index Average | ||||
| STR | STR, LLC, together with STR Global Ltd., is a global data and analytics company that specializes in benchmarking hotel performance and providing market insights to the industry | ||||
| Ten-X | The legal entity Ten-X Holding Company, Inc. and its directly and indirectly owned subsidiaries | ||||
| Term SOFR | The forward-looking SOFR term rates administered by CME Group Benchmark Administration Limited | ||||
| U.K. | The United Kingdom of Great Britain and Northern Ireland | ||||
| U.S. | The United States of America | ||||
| Visual Lease, LLC | The legal entity Visual Lease, LLC, a Delaware limited liability company, and operator of Visual Lease, a SaaS platform for integrated lease management and lease accounting | ||||
| Visual Lease Merger Agreement | The agreement and plan of merger dated on October 18, 2024 between CRI, Neptune Merger Sub, Visual Lease, LLC and Shareholder Representative Services LLC as the Holder Representative, pursuant to which, among other things, and subject to its terms, Neptune Merger Sub will merge with and into Visual Lease, LLC with Visual Lease, LLC surviving the merger as a wholly-owned subsidiary of the CRI |
PART I — FINANCIAL INFORMATION
Next: Item 1. Financial Statements