Q2 2021 CoStar Group Inc Earnings Call
And so.
[music].
Good day, and thank you for standing by.
Come to the <unk> 2021 Costar group earnings Conference call.
At this time all participants are in a listen only mode.
Later, we will conduct a question and answer session and instructions will follow at that time, if anyone should require assistance. During the conference. Please press Star then zero on your Touchtone telephone.
I'd now like turn the conference over to your host Mr. P O warm and said Vicepresident.
Faster relations you may now begin.
Thank you Chris.
Good evening and thank you all for joining us to discuss our second quarter 2021 results of the Costar group before I turn the call over to Andy Florance, Costar, CEO and founder and Scott Wheeler, our CFO I would like to review.
View, our safe Harbor statement certain portions of the discussion today may contain forward looking statements, including the company's outlook and expectations for the third quarter and full year 2021 forward looking statements involve many risks uncertainties assumptions estimates and other factors that can cause actual results to differ materially from such statements.
Important factors that can cause actual results to differ include but are not limited to those stated in Costar Costar group's press release issued earlier today and in our filings with the SEC, including our most recent annual report on form 10-K, and quarterly report on form 10-Q under the heading risk.
Risk factors.
All forward looking statements are based on information available to Costar on the date of this call Costar assumes no obligation to update these statements whether as a result of new information future events or otherwise a reconciliation to the most directly comparable GAAP measures of the non-GAAP financial measures discussed on.
This call include EBITDA adjusted EBITDA non-GAAP net income and forward looking non-GAAP guidance are shown in the detail.
In our press release issued today, along with definitions for those terms and the press release is available on our website located at Costar group Dot Com under press room as a reminder, today's call.
Webcast and the link is also available on our website under investors. Please refer to today's press release on how to access the replay of this call and with that I would like to turn the call over to our founder and CEO Andrew Florance.
Thank you Bill.
Good evening everyone.
Turning to our Asia.
And Pac employees and thank you for joining us for Costar group second quarter 2021 earnings call.
Total revenue for the second quarter of 2021 grew 21% year over year to $480 million ahead of the 470 million and high end of our guidance range.
Net bookings of 50.
And as being $51 million were up 47% year over year, and adjusted EBITDA of $150 million was well above the $135 million high and of our guidance range.
Costar group saw a substantial increase and the demand for the information on our marketplace as evidenced by 47%.
<unk> year over year increase and unique visitors and.
And total almost 30 million more people visited Costar group websites from the second quarter 2021, and then did the same quarter a year ago.
We believe that growth and marketplace audience, as a leading indicator of future growth and marketplace subscription revenue.
Revenue.
We and the results Costar suite had its strongest new bookings quarter and years Costar suite bookings and the second quarter of 2021 grew 19% sequentially and were almost 10 times last years level at the start of the pandemic and.
As a result, we expect Costar suite organic.
Revenue to return to double digits by the <unk>.
And fourth quarter of this year well ahead of our expectations just 6 months ago.
The commercial real estate economy is a tale of 2 cities with examples of both strengths and weaknesses and key indicators.
Overall, it feels like the heat economy is driving solid demand for costar.
And our sweet coasts.
Costar suite and quarterly renewal rate for the second quarter of 2021 reached an impressive multi year high at 94, 5%.
That's extraordinarily high.
This high renewal rate is all the more impressive because it does not exclude debt solutions of commercial real estate.
Right firms as principals and companies normally retire cease operations I believe the renewal rate for those clients that remain in business could be approaching 98% plus.
Historically, we have sold Costar on a module module basis offering clients modules covering basic property information comparable.
<unk> sales tend to information and various geographical modules covering cities states or countries.
Clients buying just a few product modules for just 1 geography, we're only getting a fraction of the value we could offer them as.
And as we've grown and as we continue to expand internationally it requires more and more efforts.
Effort to offer our products and as limited modules.
Perversely it cost us more money to offer clients less.
Effective this month, we started selling only the full global Costar suite product to new clients, which we now simply call Costar.
Costar sales team's primary focus is now upselling.
Selling our existing clients, who currently subscribe to less and our full product to the full product <unk>.
There are approximately 18000 client firms with partial coverage for our sales team to up sell.
Through Friday early stage early stage effort 553 clients have upgraded their costar.
Our service generating 111000, and incremental monthly revenue and average increase per client of about $200 per month we.
We expect the upsell process to generate $30 million to $40 million and incremental annual revenue with encouraging initial results leaning towards the higher end of that range.
These upgrades were more.
And incremental revenue generator, we believe our clients are overwhelmingly more satisfied after they upgrade as evidenced by increasing net promoter scores. We believe that this may result in even higher renewal rates if that's possible.
And of the almost 300 clients surveyed by our quality assurance team actually upgrade or had a convert.
Inversion conversation about upgrading roughly 2 thirds gave us a net promoter score of 9 or 10.
Clients certainly didn't see this upsell as a cost increase they stay on as a value add to their business.
And the first quarter of this year, we integrated <unk> data into Costar, we are.
And received very positive feedback from our clients and the value of this new content.
Since the launch the <unk> MBS data our clients have used that detailed loan and financial data extensively with about 45000 users access and that data over half a million times.
Later this year, we plan to launch <unk> analytics, which aggregates and <unk>.
Loan and property data by property type across more than a thousand markets. <unk> analytics will include loan origination metrics distressed loan levels maturity volumes as well as detailed revenue expense information.
And in.
And later releases, we plan to include detailed prepayment and information and over 100.
50000 disposed loans.
We estimate that <unk> data is already generate over $1 billion of net new annual revenue year to date over half that revenue signing was and the last month of the second quarter and monthly sales continue to increase.
We're also hard at work on our Costar solution for lenders that leverages the expertise.
And with Costar risk analytics to support lenders with risk management underwriting surveillance and compliance through the Costar product.
Costar lender is progressing as anticipated with plans for full release for the first quarter of 2022.
The first lender release will focus on portfolio risk analytics and surveillance to help lenders meet regulatory.
Tori and accounting requirements.
Subsequent releases will focus on loan origination and underwriting.
We believe these tools and the potential to become the standard for regulatory reporting and the U S.
That said these lender tools are specialized high value applications and so it will be price at a premium to our standard costar offering.
We have done in April we released the first international version of Costar. This new release integrated our database for the U K U S and Canada into 1 system and.
In addition, we loaded basic information on hundreds of thousands of additional buildings across 200 countries that we obtained through our acquisition of <unk> in October.
Of 2020.
And then 60 days since we launched this international product about 10000, Costar users have viewed properties outside their home country for 6 million times.
We view this as a confirmation of our clients' need for cross border property information we.
And we know that trillions of.
And <unk> of capital crosses borders to invest and commercial real estate annually and that global corporations have up to a million facilities internationally.
We recently gathered it doesn't and senior Costar leaders and Eisen for week long summit to evaluate and plan our international growth strategy.
Oddly Iceland is 1 of the few places where staff for.
For multiple countries can gather without a week quarantine and so that's a good spot to meet.
We believe there is a clear opportunity to expand costar and to 50 additional countries over time, we believe we can win tens of thousands of new customers and create much more value for many of our existing clients.
We believe that international expansion and presents a unique.
Unique opportunity to leverage our scale and expertise and we're really excited about that opportunity.
Beyond <unk> Costar lenders student housing international and hospitality information, we have over 100 additional product enhancements that we have and planning for costar over the next 5 years.
We believe that these future enhancements will help us win more customers sell more to our existing customers and increase the value of our service to 2.
2 existing customers.
Given the strength, we see and Costar renewals and sales.
As well as our clients. Good performance, we are restarting annual price suggests.
Adjustments on Costar contract renewals and September of this year.
Loopnet revenue and the second quarter of 2021 grew 18% year over year, driven primarily by a 71% growth and our diamond platinum and gold ads that provide unparalleled exposure and branding benefits for our clients.
And we also saw Loopnet net new sales growth accelerated 36% from the first quarter of 2021.
In the quarter Loopnet earned the highest renewal rate of annual contracts that we've seen in years and possibly ever.
We have launched a broad based marketing campaign to enhance the Loopnet brand.
And increase our visibility and support our clients, who own office properties and their need to bring people back to the workplace.
The campaign and also serves as a message for the commercial real estate items that loopnet as a high value marketplace connecting premier properties with the most valuable tenants and investors.
And I hope many of you have seen the Loopnet space.
And for dreams advertisements broadcaster and the PGA championship for the U S. Open or you may have seen the ads airing during prime time at CNN NBC news MSNBC CNBC and many other leading media outlets and.
And May and June we delivered over $1 billion high value media impressions across television.
Streaming and social channels and.
I believe that these pieces are both well done and very well received.
Office vacancy rates remain elevated by historical standards and Loopnet is uniquely positioned as the ideal marketplace for brokers and owners to market to help fill those painful vacancies.
<unk> believe loopnet.
With almost 20 times more traffic than our closest competitor is the best commercial estate marketing solution available.
Our space for dreams advertising campaign, coupled with our enhanced SCM investment and the SCO optimization has led to record average monthly traffic.
Approximately 10 million unique visitors across our Loopnet network and Q2.
Traffic to the Loopnet network of sites is up 33% year over year and the second quarter of 2021.
Compared to the second quarter of 2020.
We are seeing quality of traffic as well with 887 and a fortune 1.
<unk> operating companies searching on Loopnet and Q2.
This is the site are also spending 59% more time on the listings this quarter compared to the second quarter of 2020.
We've seen the owners and brokers with the properties that are the best candidates for our higher highest level diamond and platinum ads show increased activity on Loopnet.
And we're all search activity from them up about 40% year over year.
Our investments in ecommerce and yielded positive results with ecommerce sales rising 86% year over year based on improvements and the checkout flow and mobile responsive workflows.
Today, we are relying on.
With those of our sales force to sell both Costar and Loopnet, which is sub optimal.
The market for the 2 products being so vast and co.
Our sales force is delivering exceptional results selling more new business and the second quarter 'twenty, 1 and in any quarter over the past 3 years on a combined costar loopnet product basis.
On the coast or thereabout as productive as they've ever been.
We continue to believe that were and the early stages of a major offline to online shift and marketing commercial property. So we are building the recruiting training and leadership and facilities to support our centralized team a professional dedicated loopnet sellers and Richmond, Virginia.
Our first.
And so last 1 on this new model is expected to join our third quarter and grow to 50 or more by the end of the year.
We believe the Loopnet brand has so much more growth potential beyond the current business online.
Online advertising shift it's a years long journey, so building a strong foundation for the business is critical.
This year as property and has come to view Loopnet.
Sales is a must have property.
Must have to properly market their properties.
Our apartments Dot com platform continues to deliver unprecedented value to our customers. Our 2021 consumer AD campaign, starring Jeff Goldbloom as has been our most effective campaign.
Look better delivering for 1 billion impressions and the second quarter alone.
Campaign runs across multiple outlets, including traditional TV and top primetime and sports programs.
And we have expanded investments into new outlets, including video on demand streaming audio social media and new partners such as Twitch.
And <unk> top esports and more.
Aren't we hit.
As a result, and the second quarter, we saw record network visits up 32% year over year to $363 million and record unique visitors up 30% to $177 million.
And the consumer campaign will continue.
Heavily into Q3 with more top programming as we've already aired and every game and.
And the NBA finals and are currently running across the Olympics.
More and more property has continued to make the decision to advertise on apartments Dot com and are now over 6500 paying property is on apartments dot com and increase of 17.
Twitch and since the beginning of 2020.
In addition, our existing customers are staying with us longer.
Our renewal rates have increased over the past 3 years and are now at their highest levels ever.
That's a trifecta, we've got Loopnet apartments, and costar at their highest renewal.
Our rates.
We believe the reason for this is because we have consistently deliver exceptional value to our customers site traffic represents valuable reach and exposure for our customers' vacancies.
Looking back for the start of the pandemic and the first quarter of 2020 apartment site traffic has increased significantly with visitors up 48% and visits.
Percept, 60% for the second quarter of 2021.
And as a result with high quality consumer leads to our advertised properties have increased a whopping 123% since the beginning of March last year leads are up 123%.
Because we held our subscription package advertising.
Visit sites flat during the pandemic.
We essentially more than cut in half what we charged our clients on a per lead basis.
Our growing competitive advantage and our success and driving such strong traffic and lead growth had the unintended consequence of creating half off sale and reducing organic revenue growth for.
<unk> period of time.
The second quarter of 2020, the average client received 80 leads from our lowest AD level silver silver.
Silver clients needed more leads they often and upgrade to our highest debt level diamond.
And received on average 118 leads per month.
With so much success and traffic and lead growth.
For shortage lead flow from our lowest and add the silver level surged beyond diamond to 129 bleeds per month, and the second quarter 2021.
The silver AD packages generating so many leads clients essentially stopped upgrading to a higher ad level spend packages slowing our organic growth.
Fortunately.
<unk>. This is a high class temporary problem, that's easily solved by adjusting our price per lead upward closer to the level. It was before the pandemic.
We believe conditions are ideal to reduce the discounts on our price per lead demand for apartments.
Apartments, not the dot com the actual apartments hasnt.
Has increased vacancy rates have decreased eviction maturing and moratoriums will soon expire and rents are soaring for investment grade apartment buildings 3 to 5 star with 100 units plus average rents and started 12% from 1464 unit and Q3 dollars 20 to 1006 hundred $34 and Q.
Q3, 'twenty, 112% is a pretty big jump in that short time period.
Value of investment grade apartment buildings has soared as well the sales price per door of an apartment building climbed 74% from the second quarter 2020 from a low of 102000 per door to a second quarter 'twenty 1 price of 263000 net.
<unk> 8 <unk>.
<unk> increase and price per door.
We believe that turnover departments is poised to increase as organizations that had been 100% remote returned and office work, resulting employees shifting back to the cities. They just left that increased churn should drive increased demand for leads and addition.
Landlords raise rents it drives even more turnover as tenants move to avoid rent increases we believe that this combined with the fact that we continue every year to deliver more and more value to our customers will allow us to increase our advertising rates for purpose dot com and the third quarter, while still providing the best value per lead.
And our clients have ever seen.
We are once again growing our mid market multifamily sales force and Richmond, Virginia, a component of this training classes from the homes Dot Com sales force as we are Repurposing a portion of that team for apartments Dot com and we're really excited to have almost 30 of these reps join our mid market sales effort.
In total.
We expect to more than double the size of our mid market sales force by the end of the year.
We believe the U S apartment market is a $6 billion to $8 billion opportunity and our penetration rate across all segments remains relatively low on.
Although our near term sales and revenue growth rates will be lower for <unk>.
And then last year, we believe that our exceptional.
Actual price value and ability to once again grow our sales force will return sales and revenue growth to strong double digit levels.
The global hospitality industry is finally, seeing and encouraging recovery for recovery, driven primarily by leisure travel and the United States.
We're seeing positive signs of activity around.
Around the world with the number of hotels, providing data to STR now over 67000.
Which is again growing and above the pre pandemic data contribution levels.
STR solid performance in spite of the challenging macro backdrop affirms the critical nature of Str's day of the hospitality industry.
I will share our subscription revenue grew 5% year over year on a pro forma basis.
During a pandemic with renewal rates of 95% and we saw positive net new sales consistently throughout the second quarter.
Although the pandemic stop the hotel industry and its tracks only 5 months after required STR are subscription.
Revenue was up 10% compared to the trailing 12 months revenue prior to the acquisition.
And the 91 days since the release of Hospice fatality performance standard and Costar, we are seeing strong interest and activity levels 47000, Costar users have performed over 94000 and analytics searches.
<unk> for including views of market and Submarket reports and capital market reports.
And total there've been almost 690000 hospitality property views.
<unk> sales effort for this product was focused on training existing subscribers and increasing the number of distinct users at customer locations.
At the end of June we launched.
And most of our sales campaign focused on the new hospitality data prospects. This initial.
Campaign targets 1200 high quality leads the team of 70, Costar account executives selected and trained to focus on hospitality owners and brokers.
Like an elite group of hospitality salespeople.
Nuc.
We acquired Tenex and June 2020.
1 year later, we've transformed <unk> into a very vibrant transaction platform with a lot of potential with growing traffic and increasing asset volume and size.
<unk> revenue grew 42%.
For year on a pro forma basis, and the second quarter 2021, driven by a 31% increase and average deal size and a 35% increase and transaction volume.
Tenex to our Costar platform, increasing loopnet advertising and producing our highly successful don't just sell it can exit.
Year, everything with Michael Keegan, Michael key have all contributed to this transformation.
Taxes value proposition of speed certainty and market price is increasingly resonating with buyers and sellers and brokers and we're making significant progress on both the supply and demand side of the business, which are working together soon.
<unk> lead to produce better results for both buyers and sellers.
On the supply side the number of assets.
<unk> for the Tettix platform grew 30% year over year, and the second quarter, 2020, 1 and the dollar value of assets grew 80%.
And that 80% of the assets, we closed and the second quarter 2021.
And are just are sold by institutional and private client groups, which is a good proxy for performing assets.
And at 80% of the assets were performing and the second quarter of last year that figure was 59%. So this reflects the continuing transformation of <unk> from a distressed asset platform.
And to a market rate commercial property sales platform.
And though it is ready should there be a surge and distressed.
The rate card reduction on high value properties, we implemented in the first quarter of this year is clearly working.
Even with the rate reductions, we have really solid margins on those high value properties. We're.
And increasing number of higher value assets brought to the platform and the second quarter, we had a $20 million students housing facility of $120 million multi building industrial portfolio and a $60 million loan moves through the 10 X platform on.
On demand side traffic grew 18% quarter over quarter and 100.
40% year over year.
Okay.
Detailed pages grew 110% year over year and the number of approved bidders was up 150% year over year.
The average number of bidders per and assets.
And as a tenex distressed asset.
And we're seeing and then.
Net property platform.
I think that's my right it's recycling capital.
The average number of bidders per asset increased from 2.9% a year ago to 4.4 and the second quarter. This year.
The synergistic network effect improving.
And by and demand is reflected in a total asset sold as a percentage of total assets brought to the platform known as the trade rate second quarter 'twenty, 1 trade rate reached an all time quarterly high of 74%, notably.
Notably this is about twice the average trade rate for offline property sales.
And we are adding to the <unk> sales force every month and expect to have sales our sales team for about 60 by year and our experience. So far is that our sales training combined with our strong product offering is producing highly effective new salespeople almost 20% of <unk> sales pipeline already and the second half of 'twenty 1 is from.
New salespeople hired and trained in 'twenty 1.
Home snap had an excellent excellent second quarter growing total revenue, 50% year over year and SaaS revenue of 46%.
<unk> pro registered users grew 14% to 700.
150000 total agent subscribers grew 80% to 63000 and at the end of the second quarter.
Total paying agents grew 52% year over year from 53000 to 81000 and those agents are spending 35% more on advertising.
And at $80.
Year versus $60 per year, a year ago.
Our residential portfolio now consists of home snap, the leading real estate productivity and marketing application homes Dot com, a well recognized residential marketing portal and acquired and just may of this year and <unk>.
Combination of homes Dot com as the homebuyer.
As per your portal and home snaps the agents professional platform sets the stage for us to offer sellers buyers and real estate agents, a better more collaborative online and online home sale and purchase experience.
And once integrated we plan to provide agents with instant access to manage their listings on homes Dot com view and respond.
And by our inquiries collaborate with clients and provision sophisticated digital marketing campaigns.
We believe this direct connection between agents and consumer portal would be both very unique and very valuable and this industry.
We plan to grow homes Dot com site traffic by operating homebuyers.
Bond accurate real time information straight from local MLS and supported by the best photography, and multimedia content possible along with good agent interaction.
Interaction traffic.
And our website and Paris, homebuyers and collaborate with agents and they trust.
Costar group's hundreds and hundreds of talented architectural photographers.
And have brought millions of properties and live for millions of renters with the highest quality photographs videos and <unk> tours.
Now this team is committed to providing and immersive and compelling presentation of residential properties on homes Dot com.
We began integrating homes and home snap immediately and have already taken.
Steps to improve the experience for buyers and eliminate price that works against the agent and seller relationships.
If you had looked at homes dot com when we acquired them back in May.
You probably noticed there was a little bit of room for improvement on this site.
We still have a lot of hard work.
And we have a lot of work ahead for us.
But you might be impressed to see how many improvements we've already made and just a matter of a month or so on the site. The results are tangible with daily leaves the site of approximately 70% since we first made the improvements about a month ago.
<unk> Com is a large real estate for Salesforce and we are re.
Saying that to sell homes snap products to hundreds of thousands of additional real estate agents as well as we're using them for middle market advertising sales for apartments Dot com.
In order to build our integrated residential marketplace for plan to increase the level of integration investment and our residential offering and the second half of 'twenty, 1 by $25 million.
And the investments split roughly.
Roughly and 2 between marketing cost and additional technology and content generating resources.
We're calling you today from within our headquarters building and we've seen most of our colleagues and this building today.
We're pleased.
Pleased to report that we're making great progress, bringing our employees safely back to work, we believe that being physically and the opposite essential to collaboration productivity and company culture.
We evacuated our offices last March because of the global pandemic, not because and HR innovation that discovered that remote work was more productive.
Currently and the U.
Approximately 94% of our employees are vaccinated.
And approximately 85% of our employees have come back to the office.
We're grateful to all of our staff, who kept Costar group running so well during the challenges.
Last year.
It feels great to share staff back and the office together collaborating learning and growing and.
Believe that while other companies have yet to come to grips on the challenges of getting their workforce back to full productivity.
Well ahead of the game at this point.
The U S economy is.
Experiencing the strongest rebound and growth of the G 20 economies. This strength and turn is fueling a broad based recovery across the commercial real estate sector with cash and the bank plenty of accrued vacation time, and vaccination cards and hand leisure travel is driving a recovery and the hospitality sector.
Over 70% of U S held <unk>.
And the occupancy above 60% in June the <unk>.
Since October 2019, and.
And multifamily search activity on apartments is trending well above 2020 levels high consumer demand combined with vacancy rates at 20 year lows and limited supply growth is resulting in unprecedented rent growth singles.
The single family market remains.
<unk> have IHOP, driven by tight inventories and low interest rates and retail government stimulus plus wage growth have driven and retail sales well above pre pandemic levels.
As a result, both leasing activity and transaction volume and retail surpassed pre pandemic levels and Q2.2021.
While bankruptcies and closures per.
And what they are on pace for their lowest levels since 2016 and.
And industrial elevated spending on consumer goods, the rise and ecommerce and the need to expand industrial supply chains drove leasing volumes to all time highs and Q2, 'twenty, 1 up 40% year over year.
<unk> record high consumer.
And demand continues to.
Outpace supply and produced rent growth of 5% and Q2 'twenty 1.
Despite negative net absorption and high vacancy rates office sector is beginning to show early signs of recovery leasing volume rose above pre pandemic level for the first time and.
Q2, 'twenty, 1 sublease space growth decelerated as companies realize they make neither office space and occupancy losses moderated.
And capital markets total transaction volume in Q2, 2021 increased and actually exceeded Q2.2019 levels.
Q2.2000.
Instruction and deal volume exceeded 5 year averages and multifamily industrial and retail but did lagging office.
Distressed sales to date are running about half of 2020 levels.
At this point.
I'd like to turn the call over to our Chief Financial Officer Scott.
T Wheeler.
And I suggest the first question the Q&A be what does the T standpoint, and Scott Wheeler.
And Thats significantly and Mike just have to leave unsolved and for the remainder of this call.
And maybe I'll decide to answer that 1.
And keep your guess.
Alright.
And while that was a lot on ground to cover and Mr short call Greg.
Great summary.
It seems like we keep having increasing opportunities with every new component that we add to the business.
And it's easy to summarize financially we delivered another strong set of results this quarter with revenue and adjusted EBITDA and sales bookings all grow.
And the strong double digits.
Our results include a shortened period of results for <unk> Dot com and the second quarter, which are not material for the overall revenue or profit for this quarter.
Revenue and the second quarter of 2021 increased 21% over the second quarter of 2020 coming in above the high end of our guidance range with Costar.
Alright, and home snap all exceeding our expectations.
Organic revenue growth for the second quarter with 13% improving from the 11% and the first quarter on the strength of both Costar and Loopnet growth improvement.
The product, which we now simply will call Costar grew revenue, 7% and the second quarter of 2021.
Ken and second quarter of 2020, improving from 4% growth from the first quarter and exceeding our forecast of 5% to 6%.
And with very strong sales results improved renewal rates for launch of the single Costar product upsell program and the planned return of annual renewal price increases and September the outlook for Costar continues.
Versus growth.
We now expect Costar revenue growth to improve to around 9% and the third quarter and returned to double digit growth and the fourth quarter of this year.
This improves our full year revenue growth outlook for Costar from 6% and we talked about last quarter to approximately 8% this quarter.
And we fully expect costar revenue growth to improve quarter.
2 on program and returns on the historical growth rates and the 12% to 13% range as we move into 2022.
Revenue and information services grew 15% year over year, and the second quarter of 2021 and exceeding expectations for the quarter.
Subscription revenue growth remained strong and real estate manager and FTR.
And with both increasing 16% when compared to the second quarter of 2020.
Overall, we expect information services revenue growth of around 10% and the third quarter and for the full year.
Multifamily revenue grew 18% and our second quarter 2020, 1 at the lower end of our 18% to 19% range.
By core free half for the revenue growth over the year within the second quarter is from new properties advertising with us and the other half for this growth from the average rate per property.
As Andy talked about and rapid increase and lead generation recently and is creating a negative sales mix shift for fewer customers upgrading to a higher level ad packages.
And this reduced the second quarter sales level for apartments, com, which in turn impacts our revenue growth rate outlook for the third quarter.
We expect and year over year revenue and growth rate and multifamily to be approximately 12% and the third quarter of 2021 and to improve sequentially in the fourth quarter as we implement new pricing at.
The contracts.
Contract renewal times.
The new pricing against the layer into the revenue every month, and we expect revenue growth rates and Clinton continue.
Continued to increase.
Into 2020.2.
Also the recent shift of homes dot com and sellers to the apartments for mid market team and the ability to hire sales people as the economy reopens or both.
Expected to contribute to improved revenue growth after the third quarter this year and well into 2022.
Commercial property and land revenues grew 72% year over year, and the second quarter of 2021, well above our expected 55% to 60% growth range both.
Both connect and home snap delivered revenue above expectations.
On a pro forma growth of over 40% for <unk> and <unk> 50 per cent for homes and App.
Loopnet revenue increased 18% and the second quarter compared to the second quarter of 2020 slightly below expectations as a combined costar and loopnet sales team for <unk>.
Little less loopnet and more Costar and we can assume.
In aggregate.
The Costar and Loopnet sales team like Andy mentioned delivered sales bookings above our forecast and the second quarter and 1 of the highest level they generate and for a long time.
Accordingly, the combined revenue of Costar and Loopnet was also above our forecast and the second quarter.
We expect this combined revenue growth rate of Costar and Loopnet to continue to improve and the third and fourth quarters.
Ahead of our previous revenue guidance.
On a standalone basis, we are forecasting loopnet revenue growth of around 15% for the second half of this year as we assume that the Costar and Loopnet sales force will be focusing on more costar sales and not quite as many loopnet sales and the second half and while we build our Standalone sales force.
Overall, we expect the reported commercial property and land revenue growth rate to be approximately 50% for the third quarter and for the full year of 2021 on.
<unk> and we expect growth of approximately 17 to 18 per cent for both for third quarter and the fourth quarter of 2020.1.
Our gross margin came in and 81% and the second quarter.
And 1 in line with our expectation and we expect gross margins to continue at that level for the end of the year.
Net income was $61 million and the second quarter and our effective tax rate was 35%.
The effective tax rate includes an incremental impact of around 10% related to a modification to our international tax structure.
2000, and this change only effects for the second quarter, and we expect the effective rate to drop back down into the mid 20% range for the rest of the year.
Second quarter, adjusted EBITDA was $150 million and.
Adjusted EBITDA was up 17% from the second quarter of last year and came in approximately $15 million above the high end of our guidance.
The resulting adjusted.
But our margin of 31% is 300 basis points above the midpoint of the guidance range.
This improved adjusted EBITDA was primarily on primarily the result of higher revenue.
Timing variances for our marketing spend and lower than expected hiring and the second quarter.
Most of the cost favorability and the second quarter.
Adjusted and will reverse in the second half for the year due to the timing of our marketing and growth and our sales teams and we expect and investments and our margin residential business.
And I will look at some of the performance metrics for the quarter.
Starting with our sales force.
Our sales force totaled approximately 905 people at the end of the second quarter.
And increase around 60 for people from the second quarter of 2020 and up little over 70 people from the first quarter of 2021.
The growth is primarily due to the addition of the homes dotcom sales team and <unk>.
Majority of which we have deployed to sell pumps net products and Midmarket apartments product.
The renewal rate on annual contracts.
The second quarter claim playing on with 92% up from 90% last quarter and 89% a year ago people are really hanging onto our product.
This renewal rate is the highest since the third quarter of 2014 and strong Testament for the mission critical nature of our product and the success of our continued investment and our platform.
On the renewal rate for the quarter for customers who've been subscribers for 5 years or longer was 97% and increase from that and renewal rate of 96% and the first quarter of 2021.
Subscription revenue on annual contracts accounted for 77% of our revenue and the second quarter and <unk>.
Decrease of 1% from the last quarter as a result of adding homes dot.
Tracks for them to our metrics.
I'll now talk through our outlook for the full year and the third quarter of 2021.
We are reconfirming, revising and slightly improving our revenue guidance for the year and raising our range to include homes Dot com.
We expect full year revenue and a range of 1 billion and $940 million to $1 billion 950 million.
Dot com, which implies annual growth rate of 70% at the midpoint of the range.
For the third quarter, we expect revenue on a range of $495 to $500 million, representing revenue growth of 17% year over year at the midpoint.
For the full year 2020, 1 we have revised our outlook to include the previously.
And balanced adjusted EBITDA loss of $15 million for homes Dot com, along with an incremental $25 million of investment and our residential business and and you mentioned.
Approximately half of this investment is related to marketing and agent engagement with the other half related to technology development resources and content generation.
Accordingly, and our full year outlook.
CNS and EBITDA is expected to be and the range of 605 and $615 million.
This implies an adjusted EBITDA margin of 31% at the midpoint from the range.
And we expect adjusted EBITDA of approximately $130 million to $135 million and the third quarter of 2021 for and adjusted EBITDA margin between 26 and 27%.
And third quarter marks the highest quarter of our marketing spend and we will have apartments dot com Loopnet and 10 ex marketing campaigns running throughout the third quarter.
Overall, we had a very strong first half of this year and it's great to have the heavy lifting of returning to work almost behind us.
And I'm certainly encouraged by the continued strong rebound of Costar.
Look for debt and the great growth potential that we have and our marketplaces of apartments, and Loopnet and our new residential business. Thank.
Thank you everyone for your continued support and operator, we can now open the call up for questions with a few rules from our friend Bill Warmington Bill back to you.
Thank you Scott Chris would you please.
Our assemble the question and for the Q&A section.
And.
Please limit yourselves to 1 question and make it a good 1.
Okay.
Ladies and gentlemen, if you have a question at this time, please price tomorrow and then the number 1 key on your tax Golan Telecom for.
And are you wish to UK sales from Vicky Please spreads.
Yeah.
Your first question comes from Charlie <unk>.
Jpmorgan Chase your line is open.
Yeah, Thanks, Hi, guys.
My first of all Mike.
Guess on Scott He we alert and so I'm Gonna go with T for Thomas and my close.
Wow, Timothy you'd be good knows how to use Google very effectively.
For us prescient and I'm not sure.
John and Dan.
Thank you and.
For my 1 question.
My question was popular question I get is everyone sees the investment that youre looking to make and residential and and I think they agree with the opportunity that they don't know how to think about that investment in the context of your previous 2023 margin target.
40% for EBITDA.
Can you maybe give us an update on how we should think about it and at that target is still.
Viable.
Yes.
And to hear from you Sterling question.
Again it comes up frequently.
With the investments, we just talked about additional resources and some marketing as we build this platform.
For them out we're still on line to hit our 2023 targets and we still consider those the marching orders for the business.
And so we need to get through the integrations.
What's the site improvements and you mentioned that.
On traffic visitors improvements and the site a lot of these things are going to depend on.
On what happens for the rest of the year and on integration program and then we will decide what next year's plan looked like relative to investment in residential versus our other platforms. So.
No change to our 2023 guidance right now all our plans for residential we've just talked about we can still make those numbers and intend to based on what.
So far and and if that changes or.
Or new estimates come our way, we will let you know and.
And I wouldn't want to I wouldn't want to you know.
Despite the question a little bit.
By pointing out that 100 per.
And the core business of Costar group is solidly on target.
And for that for that goal.
And.
Should there be a clear opportunity to invest and what would be a significantly different business, we will communicate that at the point that.
We.
And are doing that but but the.
On the metal business is definitely on track for that.
Those goals and it's performing really well so.
It's.
It's probably you know.
And.
It's probably a little bit hyperbolic.
I didn't know what that means but it sounded good.
And it sounds like back end loaded for me, but I just wanted to make sure.
[laughter].
Alright.
Alright, okay.
Thank you for that.
Okay.
And Tom's.
Thank you for Colby.
Your next question comes from Pete Christiansen.
Your line is open.
Good evening guys. Thanks for the question I was just wondering if we could dig into them.
And for the Loopnet performance, a little bit more here.
Obviously the.
For the T cell growth areas is clearly coming from the silver ads.
And and and you did point out and obviously there.
The Costar suite guys are.
Our are doing double duty here, which which is likely making an impact, but I guess I would I would presume that and you have an easy comp and.
Real estate activity is improving quite dramatically.
Uh huh.
Surprised that debt that the silver ads.
Are.
Decelerating so much and I was just wondering if you could put a little bit more color on maybe I don't understand the relationship exactly.
2 what's going on and the sales force and what's going on and the broader market.
That would be helpful. Thank you sure so.
Uh huh.
Yeah.
Korea. She is 1 is I mean, so you are correct to point out that the economy is great. The product is performing really well the product looks really good the traffic is fantastic and marketing was well received.
We are.
Limited by how fast we can scale that sales force and as you listen to the earnings call you here.
Coupling salespeople in this bucket and that bucket and we're clearly hard and a lot of salespeople and Thats, great news, because we have opportunity for them.
Our primary focus is on those upper and adds we don't want to just keep on cell and the low and as forever and we would like to within the next year.
Come up with.
And we're a.
A more optimal way to sell those entry level ads, where we don't charge the same price for all properties and all geographies and we'd rather.
<unk> 2.
A.
More demand based pricing algorithm on those on the silver ads so.
We.
We are holding off driving a lot of activity in there until we can do that there are some areas, where we want to reduce our prices on silver ads and many others, where we want to significantly increase our price and silver at so if you look at apartments Dot com.
The average silver at is probably 8 times.
Average.
Average loopnet silver at and we want to basically move towards away or rebalancing that while reducing prices on some and then increasing.
On some other areas where people would notice even happened.
So it's more of a.
And evolving.
<unk> dynamic, but the fundamental marketplace is super strong and we're hitting on the <unk>.
So we're trying to hit with that right now.
And Pete if I can just add a couple.
The numbers on top of that but the list or.
Revenue that you mentioned and silver ads is about 75% of the revenue for Loopnet.
And it's still growing it's growing at mid single digits.
And we're seeing the traffic growing 70%, we talked about that mixes into that <unk>.
18% growth rate for the second quarter. So it's still growing it's just at a slower level right now and it's not the primary focus.
Q&A.
And that actually comes from David <unk>.
Bank of America.
Okay.
Alright, thanks, guys. So.
Bookings for clearly rebounded off like the Covid lows.
Just wondering what it takes to get back to like the prior peak, which I think it was and second quarter 2019 with like $59 million.
And it.
That's clear recovery and apartments.
And then just based on the macro environment. When do you think this would be achievable.
I think the quarter you mentioned.
All cylinders were cranking, so you had a great quarter for apartments and Loopnet.
Apartments Loopnet.
Our.
We also have other contributors now like home snap and.
<unk> buy sell Costar real estate manager Thomas Daily lands are all cranking and so you have a lot of different things happening here.
I think there is youre youre in and organizational.
And Costar flux, and we're trying to get past us a return to work a return to normalcy theres a lot of adjustments going on and.
We're getting back into a growth mode and you want to have all your sales force is lined up and you want to get share price per lead numbers right, but I think that could happen.
And the next 2 quarters.
And a lot of good things going on and all the products are really solid.
So I think it's just a question more of a transition.
And friction and this environment right now.
And David when you look at where we are now on the bookings.
As we said the Costar and Loopnet.
Orders will force produced its highest level for quite some time. So those are very strong and we talked about this and.
And multifamily piece, if now for multifamily.
Sales.
To listen and say the average we were doing and 2019, we would have had our best quarter ever in bookings.
And the other thing that Andy mentioned.
Sales and home staff are 2 brand new businesses.
We have.
And they are not accounted in the subscription metrics because tenex as all transactional and home snap is a large piece of us and we consider transactional at this stage before we convert our residential offerings to subscription style businesses. So right now we have.
About 91% of our revenue is subscription and that.
And typically had been up into the 90, 596% plus range. So there is a.
Both element and we have right now and our business that's.
And that's coming from 10 ex and homes now that youre not going to see and the bookings right now until we convert those to a subscription so that you get.
And you have 10 out of that versus the numbers, we've talked about but that's really it.
For the price, we talked about and multifamily that should return that to the better sales numbers and that 1 would move us upwards.
Your next question comes from John Campbell of.
Stephens Inc.
Your line is open.
Hey, guys good afternoon.
Good afternoon, Hey, just back to the residential side.
And then I'm guessing there's a way to.
I guess more meaningfully build off the traffic there without relying solely on the AD spend to get you there, but you know I think you might've hinted at that and the commentary around the kind of even split of investments going on across the marketing and content and the back half but.
Little lift and I know for competitive reasons, you can't you guys aren't going for a show your hand, there, but Andy to what extent you can maybe just provide a kind of high level peek into that strategy.
The.
You are right about not wanting to show our hand.
And I.
[laughter] so thank you for the opportunity.
But.
What we're offering is really quite simple.
Really brutally simple, which is 90% of the real estate transactions and the United States.
And a buyer.
Collaborates with an agent.
And if you look at our website right now homes dot com and its.
All of a month old so it's not going to be a masterpiece, but if you look at our website.
Got something.
We're really unique it's the only website that I'm aware of the United States, where.
You can actually look at a property for sale and see clearly see.
And the name and phone number and the age and push a button and contact them.
So.
So that puts a million and real estate agents on our side.
And those million real estate agents are involved and 90% of all transactions and communicate regularly with their clients.
Clients so.
We are.
We're excited about that opportunity we love. The fact that it is so simple most people can understand it.
And.
And we're not afraid to work if we think there is a fantastic ROI.
Stick return for our shareholders, we're not afraid to invest in it but we are right now we're working on the software and the and the.
On the mental structures, which are not wildly expensive and.
And as I mentioned.
For weeks of work.
Cash and the lead flow is up 70% so.
The first stair of many but.
I think that as it evolves and we can talk more with analysts and investors about.
And the progress, we're making and the vision we have for it.
Ah.
I.
And I think that people will support.
Our initiatives, but it's still.
We don't have some secret magical plan that we're laying out for.
2022, or 23 right now we are dealing with orders of magnitude and we're more focused on software and strategy right now.
Work.
Your next question comes from George Tong.
Goldman Sachs. Your line is open.
Hi, Thanks, good afternoon.
And the apartments dot com revenue growth accelerated in the quarter because on the effective reduction in price per lead.
And you elaborate a bit more on initiatives to help reverse.
And when you would expect to return to 20% plus multifamily revenue growth.
Well, that's an excellent question Krishna.
I think thats the question.
And.
<unk>.
The lead per AD at the lowest level was unimaginable.
And if I had told someone for years ago or 5 years ago. The number of leads the site is generating at the lowest AD level. It would have been implausible and no 1 could have believed it.
So.
We are helping some very large properties generate a lot of revenue for very little.
And Mike.
And what we've done and worked with them.
And the leadership team and apartments Dot com and we are.
Rolling out a new pricing strategy and we're also adjusting the lead flow and the nature of the product and how it throws leads.
To meter them more effectively to the upper end.
And that and we're also.
Doing more strata and the pricing structure between the 80 unit property is a 100 unit property is a 200 unit property at 300 unit property to more.
Appropriately reflect the value of 1 of these.
Super High.
Lead generating AD so.
It's pretty easy to go after and it will take.
We're not it will be something that rolls out and of course of 12 months and it begins rolling out.
And as early as next month.
And so you'll see and advantage there, but this is.
Fundamentally really good news and this is.
There's 2 kinds of things you could have problems. You can have 1 is you don't have the traffic and kind of the lease and the other issue of way too many leads and clearly our competitive position has gotten very strong recently.
And it's been getting stronger and stronger and but it's gotten really strong.
For the last couple of quarters so.
We will.
We will.
Throw more power to the Dynamo and it will take more friction off the <unk>.
Engine and throw more power to the wheels.
Over the next couple.
Quarters, and you'll see us return to those growth rates as we go into 2020 and.
And it's sustainable for a long time.
Your next question comes from Guang Yang from Sandler.
Your line.
Is that day.
Thanks for taking the question I guess, just following up on apartments Dot com.
And so curious how youre, Andrew how youre thinking about the growth outlook there beyond the near term disruption and say over the next 3 to 5 years.
Backlog forms growth.
There's still obviously.
For the market share opportunity and the 100 points and that category and understanding the comments around the right sizing and be effective price per lead.
How are you thinking about managing the business as growth at the <unk>.
Hi, and and have been really starts to slow and in particular.
And when do you expect the middle market business really start to bridge that gap, how large of a.
The business do you think that could be and what types of growth rates are you investing for and that piece and the market over the next few years.
So.
And I actually don't think the high and slows for.
For many many many many years if not decades.
And we still are 50.
Percent penetrated on the high end and we have <unk>.
Many products and services, we can provide as you see us getting into more.
More actively facilitating the actual leases if you look at a.
Price per lead.
At the lower and was as little as.
2 to $3 or.
And if you were to say, 1% to 7% ratio and lead to lease and at $14 per lease.
I would not say that where was it and decades of maxing out the.
The value of the sleeves and those leases, we can bring to the table, where the door as many as hiring communities.
These are paying a month's rent or 2 weeks ran our $300 or $500 for lease and we're charging for.
2014 to $15 per leased so.
And we're not going to Max out the high and but it's really exciting what's available in the middle and lower and we are successfully selling.
And a lot of properties at the 5 unit level the for unit level. The <unk> level, the 50 unit level, and where and single digit growth and we're single digit penetration all of those areas. So.
It's a question of.
It's a question of continuing to grow the sales force to go after that opera.
Opportunity, but then also to build out our E comm capabilities too.
To capture without having to have manual intervention. So it's a great place to be and we.
And the demand side came on us harder than we ever would have anticipated and the last 2 quarters, but that's good.
Good news and you just have to change the model, but so I think you've got a decade plus.
Good solid 20% growth.
And Ryan when you look at the.
The universe of properties out there over 100 right now they are growing faster than we can add them to our portfolio just given the.
And and the general universe that we watch so actually our penetration into the upper and has stayed at 50 or 51% for like 5 or 6 quarters. Despite our growth just because of the growth and the in the universe of properties out there. So.
We've got a long ways to go just to penetrate the top on let alone move up.
Penetrations and the lower land.
Your next question comes from Mario Kart and that key.
Your line is open.
Hi, guys. Thanks for the time.
I guess.
Thank you on <unk>.
I guess just.
Those how much closer are we getting to attorneys pricing back on there and obviously I know you're very focused on the upsell on the global product.
And there's a lot of opportunity there, but I believe that you guys talked about looking for stability within the commercial real estate market before kind of looking net pricing switch.
So you can just talk about what timing looks like there and then how much price is being baked into the 2021 and guide for for Costar suite.
Okay. So when are we going to begin.
Normal price Escalations on Costar suite.
Wait for it.
Wait for it now.
So let me go.
No.
And yes September we're doing that now we have you have to.
There is a notice period on them.
There is a notice period on these contracts so that you have a delay.
But clearly the conditions are right for it right now.
Rates moving to 90.
Now 5.5 year clients up over 97%.
And all of the functionality, we're putting into the product and all the functionality, we're going to put in the product over the next couple of years.
We absolutely should be accelerating our pricing.
And at least in line with inflation.
94, and I think it will be.
200 to 300 basis points above that number and.
So I'm not sure what Mr. Thomas is baked into.
On the guidance, but I'll, let him handle that thank you and yet.
And the start of the increases that go in and the.
The next couple.
<unk>.
And on renewals, obviously, so it takes a little while to layer them in so it adds about 100 basis points I think for the growth and the.
And the fourth quarter, but then it really starts to build and next year.
But keep in mind that we are doing the conversions to the full.
Costar.
Couple of monarch and.
And so.
18000 of our clients will be getting those increases which are larger than the renewal price increases and build and the other clients will get the renewal price increases so in aggregate we're looking at some.
Pretty good.
Pricing lift going into.
Our program.
We're not increasing as 18000 people's prices were offering and I'm incredibly attractive terms to expand and purchasing with us.
Actually they like they looked at it as a decrease in price.
Price and price.
Costar nationally previously was much higher so they're like Wow, Let's go get this this is a good bargain.
And next so it's actually working pretty well so far.
Again, ladies and gentlemen, if you have a question at this time. Please press the star and then the number 1 key on your Touchtone telephone.
Your next question comes from Stephen Sheldon William.
And again.
Your line is open.
Yeah.
Hi, Thanks.
A little bit more about the Costar suite, and then up selling process I think you talked about from modules for the full global suite I guess, how aggressive do you plan to be and that up selling motion and we do also plan to sunset the module.
Williams, and I guess pricing that existing customers at some point.
And then I think you also noted 30% to $40 million and potential incremental revenue and can you provide some more detail on that number or is that the potential revenue uplift and all of your.
On suite customers and examples and we see just any more detail there.
Yes, so the 30 to 40 million.
And I think as some modeling that our VP of sales is done and and and assumes the cancellation rate assumes.
Just go and ask that 18.
And it's assuming an average price increase.
I wouldn't have the details on that model and reviewed and seeing that model.
In terms of how aggressive we would be with it I would look at some of our.
And prior efforts to move people onto a common platform and and.
And that is prior efforts, we sell very aggressively for 12 to 18 months and once we have had success and moving.
The majority.
Or any of the revenue and to the unified platform.
And then we typically.
Sunset the prior platform because at that point Youre spending money.
You're spending money that really isn't adding value and anybody to maintain 2 separate platforms. So our goal is to focus on.
Tentatively for 12 to 18 months and then.
Streamline the product and have 1 version of the product and that sort of.
Somewhat similar to what a Bloomberg does not buy and Bloomberg by geography, and there's a bunch of different modules youre getting 1 terminal and as we go more international.
We think it differentiates us against any sort of compare.
Peter and provides a very unique value proposition and having 1 platform.
Your next question comes from true.
Your line is open.
Thank you so I guess I'm still struggling a little with the magnitude of the deceleration and apartments revenue going.
Competitor.
I guess can you just maybe first comment on apartments dot com client retention and specifically our coffee overall retention, but it sounds like that's pulled up by really good results and sweet and.
And then if retention is stable I guess does it for.
Does it come to ahead now because.
And to Q2 is seasonally when you normally see clients trade up and then that trade up just didn't happen and.
And when it doesn't happen as kind of the season that you expect debt. That's why you have the meaningful deceleration going into Q3.
Yes.
And Q to be clear the renewal rate on apartments Dot com is the highest its ever been.
It is extremely high.
On.
Scott will have the.
And the number I think that through it and there I'm not sure but.
I believe it is 110th of the.
And the rate on a monthly basis from where we started in 2015 so.
Insurance down 90%.
And.
The.
During the pandemic.
Isn't really an environment Jack price as aggressively.
And so you sort of came out of the pandemic.
After the first quarter and after vaccination is really got out there.
And then the market's lit on fire.
And so.
It's a question of how fast you can respond to that.
Solutions.
And we'll respond very quickly.
But.
I think that I don't think its really just a 1 quarter of upsell that doesn't happen again I think debt.
I believe that as people go into the churn as people have to migrate back to where they were before.
Returning to work and as people churn as these price increases continue to crank and these apartment buildings and as the eviction moratorium.
For lease.
Our customers are making good money and need more lead flow than ever and I think there's plenty of opportunity.
And to capture value next quarter, the following quarter to quarter after that and ongoing from there.
And it's more of a.
If you're playing the game for the long haul you.
And you don't want to Jack People's prices during the pandemic.
But for.
We are.
We are.
For transition to capture that value now.
Yeah and Jeff.
Renewal rates at 94% for the quarter on multifamily, which is the highest its ever been.
And then and to your point and you recall last year, we had the surge and the second quarter of sales and apartments for these record levels given the pandemic.
And so that that second quarter surge annualized is off and the second quarter of this year. So you have a little bit of a cliff effect. When you hit the third quarter, because all of that that weight of the sales goes away and we haven't.
Speed at that same sales level and in a quarter since then.
You'll have some of that on the annualized thing before.
For you then look at the.
And the Upsells and weren't as strong and the second quarter of this year.
So it's the difference and the growth rate and the second and the third quarters, it's around $6 million to $7 million, which on an annualized basis is around them.
The difference and that sales level between Q2, this year and last year. So that's mathematically how it all works and the number 1 thing.
Their focus on.
If you're looking at a business like this is that 47% year over year growth and unique visitors.
It is basically a leading indicator of future revenue.
And of course, the whole the whole.
And <unk>.
Our platform is still adding more volume new people are still coming on platform.
Platform apartments and then.
Fortunately when when you have these issues that we worked through that we've got a great portfolio, where tenex and home snap the rest of the business does remarkably well and we ended up holding if not increasing slightly our revenue guidance for the year on an aggregate basis, which.
So obviously, what we want.
And we continue to do.
Yes.
I am showing no further questions at this time I would now like to turn the conference over it back to Andy.
And proceed.
Thank you. So we appreciate you joining us for the second quarter call today.
Hope you share them.
Susie item for the balance of.
Growth drivers and our business.
As we've discussed Costar suite, and a strong rebound and growing record net sales for <unk>.
Vince.
Record traffic growth and lead flow puts and is positioned to begin to share more of the value. We're creating for our customers Loopnet is growing traffic revenue and our primary goal of driving revenue signature.
Our ads is happening and happening well <unk> is really fantastic and craning gaining great traction.
And home snap and homes are well on their way and the process of transforming our agents consumers buy and sell Reza.
<unk> real estate.
We didn't have time to talk about reality <unk> buy sell Costar real estate manager Thomas Daily land.
Land they are all doing fantastic as well.
And I wish I I wish 1 day, they'll give me 2 hours for the call.
As we move and the second half of 'twenty, 1 we're working towards 2 important milestones 1 and 1 is our goal of reaching $1 billion of annualized revenue run rate and our marketplaces.
And.
By the end of the year and the second is we're going to run through our $2 billion.
Our revenue run rate overall, so some good milestones on our way to much larger numbers, but were clearly strong and our core business right now as evidenced by our amazing traffic growth our amazing renewal rates.
And.
And.
And we're focused on building our core business, but also working to triple our addressable market opportunity through investments and residential and international expansion. So we look forward to meet to meeting with you again for our third quarter call in October.
26 and.
Until then stay safe thank you.
This concludes today's conference call. Thank you for your participation and have a wonderful day.
Now disconnect.
Okay.
[music].
Okay.