Q2 2025 CoStar Group Inc Earnings Call

Operator: Thank you for standing by, and welcome to the CoStar Group's second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered, and you'd like to remove yourself from the queue, simply press star 1-1 again.

Operator: Today, we'd like to ask that you please limit yourself to one question and no multi-part questions. As a reminder, today's program is being recorded.

Thank you for standing by and welcome to the co-star. Group's second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session to ask a question during this session. You'll need to press star 1, 1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue simply press star 1 1 again.

Today, we'd like to ask you, please limit yourself to 1 question and no, multi-part questions.

Richard Simonelli: And now I'd like to introduce your host for today's program, Richard Simonelli, head of investor relations. Please go ahead, sir. Thank you very much. Hello, everyone. Thank you for joining us to discuss CoStar Group's second quarter 2025 results.

Richard Simonelli: Before I turn the call over to Andy Florence, CoStar's CEO and founder, and Chris Lown, our CFO, I'd like to review 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 and fourth quarters and full year and beyond. Forward-looking statements may involve many risks, uncertainties, assumptions, and estimates, and other factors that can actually cause actual results to differ materially from such statements.

Speaker Change: As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program. Richard simonelli, head of investor relations. Please go ahead, sir, thank you very much. Uh, hello everyone, thank you for joining us to discuss co-star group. Second quarter, 2025 results, before I turn the call over to Andy Florance co-star, CEO and founder, and Chris L our CFO. I'd like to review our Safe Harbor statement.

Richard Simonelli: Important factors that can cause actual results to differ include, but are not limited to, those stated in CoStar Group's press release issued earlier today and in our filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q, including under-the-heading risk factors in those filings, as well as other filings with the SEC available on the SEC's website. All forward-looking statements are based on the 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, except as required by applicable law.

Speaker Change: Certain portions of the discussion today may contain forward-looking statements, including the company's Outlook and expectations for the third, and fourth quarters, and full year. And beyond for looking statements, may involve many risks uncertainties assumptions, and estimates, and other factors that can actually 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 co-star, groups, press release issued earlier today, in our filings with the SEC, including our annual report on form, 10 K, and quarterly reports on form. 10 Q included under the heading risk.

Speaker Change: Factors and those filings as well as other filings with the SEC. Available on the sec's website, all forward-looking statements are based on the information available to co-star on the date of this call.

Richard Simonelli: Reconciliation to the most directly comparable GAAP measures of any non-GAAP financial measure discussed on this call are shown in detail in our press release issued today, along with the definitions for these terms. The press release is available on our website, located at CoStarGroup.com, under our Press Room.

Speaker Change: So star seems no obligation to update these statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Richard Simonelli: Please refer to today's press release on how to access the replay of this call.

Richard Simonelli: Remember, one question during the Q&A session, so make it a good one.

Andy Florence: And now, with that, I'd like to turn the call over to our founder and CEO, Andy Florence. Andy? Well, I'd have to say between the operator and Rich, you guys have set a very high bar for radio personality voices. I'm going to try to live up to that.

Speaker Change: Caller shown in detail in our press release issued today, along with a definitions for these terms. Press release is available on our website located at co-star group.com and our Press Room. Please refer to today's press release and how to access the replay of this call. Remember 1 question during the Q&A session to make it a good 1.

Speaker Change: And now with that, I'd like to turn the call over to our founder and CEO. Andy Florance. Andy

Well, I'd have to say between the operator and Rich you guys have set a very high bar for radio personality voices. So,

Andy Florence: Thank you for joining CoStar Group's earnings call for the second quarter of 2025. I am very pleased to report another exceptional quarter. CoStar Group achieved revenue of $781 million, a strong 15% increase compared to last year. This marks our 57th quarter, consecutive quarter, of double-digit revenue growth. Adjusted EBITDA rose significantly to $85 million, representing an impressive 108% increase compared to Q2 of 2024. Both revenue and adjusted EBITDA exceeded consensus estimates and were above the high end of our guidance range. Our commercial information and marketplace businesses also delivered an outstanding profit margin of 43% this quarter.

Andy Florance: I'm gonna try to live up to that. Um, thank you for joining co-star groups earnings call for the second quarter of 2025.

Speaker Change: I am very pleased to report. Another exceptional quarter, co-star achieved, co-star group achieved revenue of 781 million a strong, 15% increase compared to last year.

Speaker Change: this marks our 57th quarter consecutive quarter of double digit Revenue growth,

Adjusted IBA Rose, significantly to 85 million representing an impressive, 108% increase compared to Q2 of 2024.

Speaker Change: Both revenue and adjusted evidence, exceeded consensus estimates, and we're above the high end of our guidance range.

Speaker Change: Our commercial rule is information and Marketplace businesses. Also delivered an outstanding profit margin of 43% this quarter.

Andy Florence: Net new bookings totaled $93 million, a remarkable 65% increase over the previous quarter. This sets a new record as the highest quarterly net new bookings in CoStar Group's history. We're seeing strong performance across all our business segments driven by strategic investments and expanding our sales force and innovative product development. Throughout 2025, we're growing our core sales team by 20% and tripling our homes.com sales force from 230 representatives at the end of 2024 to about 750 by the end of 2025. All this to capture additional growth opportunity. Apartments.com had another excellent quarter with revenue up 11% from Q2 2024, reaching $292 million.

Speaker Change: Net, new bookings totaled, 93 million, a remarkable 65% increase over the previous quarter.

Speaker Change: This sets a new record as the highest quarterly. Net new bookings in CoStar group's history.

Speaker Change: We're seeing strong performance across all our business, segments driven by strategic Investments, and expanding our sales force and Innovative product development. Throughout 2025, we're growing our core sales team by 20% and tripling, our home stocks.com Salesforce.

Speaker Change: From 230 Representatives at the end of 2024 to about 750 by the end of 2025, all this to capture additional growth opportunities.

Andy Florence: Our sales team achieved $45 million in net new bookings, the fourth highest quarter ever, representing a 20% increase year-over-year. Apartments.com is approaching an annual revenue run rate of $1.2 billion and maintains a very strong EBITDA margin. I did have a percentage in there, but Chris had me take it out. During the second quarter, our sales team had over 171,000 quality interactions with clients and prospects, maintaining an outstanding net promoter score of 94%. These interactions resulted in a 99% monthly renewal rate. The addition of 3,263 new rooftops for nearly 83,000 multifamily communities advertising on our platform.

Speaker Change: Apartments.com had another excellent quarter with Revenue up, 11% from Q2 2024 reaching 292 million our sales, team achieved 45 million in net. New bookings. It's the fourth highest quarter ever representing a 20% increase year-over-year,

Speaker Change: Apartments.com is approaching an annual revenue, run rate of 1.2 billion and maintains a very strong IBA margin.

Speaker Change: I did have a percentage in there but Chris had me take it out.

during the second quarter, our sales team had over 171,000 quality interactions with clients and Prospects maintaining an outstanding net promoter score of 94%

Speaker Change: These interactions resulted in a 99% monthly renewal rate.

Speaker Change: The addition of 3,263, new rooftops.

Andy Florence: In the first half of 2025, we've already added 7,600 new apartment communities, more than we added throughout all of 2024. And we did it without steep discounting, or paying hundreds of millions of dollars for inorganic revenue, as our main competitor did. To address the multi-billion dollar addressable market in apartments, we're growing our apartments.com sales team to 500 representatives in 2025. So far this year we've added 65 new sales reps with large training classes scheduled for July and August. In Q2, Apartments.com launched a marketing campaign generating over 4.8 billion media impressions. The campaign reached renters across their favorite media channels and targeted landlords with new commercials featuring Brad Bellflower.

Speaker Change: For nearly 83,000, multi-family communities advertising on our platform, in the first half of 2025, we've already added 7,600, new apartment communities, more than we added throughout all of 2024, and we did it without steep discounting or paying hundreds of millions of dollars, uh, for inorganic Revenue as our main competitor did.

Speaker Change: to address the multi-billion dollar addressable Market apartments or growing, our apartments.com sales team to 500 representatives in 2025

Speaker Change: So far this year, we've added 65 new sales, reps with large training classes, scheduled for July and August.

In Q2 apartments.com launched a marketing campaign generating over 4.8 billion media impressions.

Andy Florence: We significantly increased our investment across key media channels, streaming video grew by 25%, paid social by 13%, and digital by 130% compared to Q224. Apartments.com was prominently featured during live sports events including the NFL Draft, College World Series, PGA Tour, NBA, and MLB regular seasons, and across popular programming on Bravo, E!, CBS, Netflix, Paramount Plus, and Hulu. We also made our Canadian broadcast debut during Game 6 of the NHL Playoffs. With the launch of our New York City specific search experience on apartments.com, we ran targeted out-of-home advertising across all five bureaus in New York City and partnered with local influencers.

Speaker Change: The campaign reached renters across their favorite media, channels and targeted landlords with new commercials featuring Brad Bellflower.

We significantly increase our investment, across key media channels, streaming video Group by 25%, paid social by 13% and digital by 130% compared to Q2 24.

Speaker Change: Apartments.com was prominently featured during live sports events, including the NFL draft College, World Series, PGA Tour, NBA, and MLB regular seasons and across popular programming, on Bravo, ecbs Netflix Paramount plus and Hulu.

Speaker Change: We also made our Canadian broadcast to view during Game 6 of the NHL playoffs.

Speaker Change: With the launch of our New York City's specific, search experience and apartments.com we ran targeted out of home advertising across all 5 bureaus. In New York City and partnered with local influencers.

Andy Florence: The Apartments.com network averaged 42 million monthly unique visitors and 234 million network visits during this quarter, according to Google Analytics. The latest ComScore data shows that all of the rental portals traffic declined Q2 25 over Q2 24. But with apartments.com network doing the best with business only down 11%. While Zillow network rental network was down 13%. Apartment Guide was down 21%. And rent.com was down dramatically down 39%. ApartmentGuide.com Market research indicates that our unaided awareness among apartment seekers remain best in class at 68%, significantly higher than all competitors combined, all primary competitors combined. Our closest competitor trails by 30 percentage points and the next closest by 58 points.

Speaker Change: Cam Network average, 42 million, monthly unique visitors, and 234 million Network visits during this quarter, according to Google Analytics.

Speaker Change: The latest cam score data shows that all of the rental portals traffic declined, Q2 uh, 25 of our Q2 24, but with apartments.com network, doing the best with business only down 11% while Zillow. Network rental network was down. 13%, apartment guide was down, 21%, and rent.com was down, dramatically down 39%,

Speaker Change: Market Research indicates that our unnamed awareness among Apartment Seekers remain best-in-class, 68% significantly, higher than all competitors. Combined all primary competitors combined.

Andy Florence: Realtor.com's unaided awareness for apartments stood at only 4% in June. Bartmans.com continues to deliver more leads and nearly twice as many leases as our two closest competitors combined according to Entrata data. We believe the Apartments.com network holds the industry's most comprehensive inventory with a record 2.2 million rental availabilities in June of 2025. To further enhance exposure, we also feature Apartments.com listings on the Homes.com rental area where traffic increased 26% year over year due to Homes.com's robust marketing efforts. Canadianapartments.com also continues to perform well, with visits up 31% and leads up 62% year over year. Since Q2 last year, we've grown our Canadian business by 300%, ending June with over 1,500 paying property.

Speaker Change: Our closest competitor Trails by 30% points, and the next closest by 58 points.

Speaker Change: realtor.com unaided awareness for apartments, stood, at only 4% in June,

Speaker Change: Apartments.com continues to deliver more leads and nearly twice as many leases as our 2 closest competitors combined, according to Entrada data.

Speaker Change: We believe the apartments.com network holds the industry's most comprehensive inventory with a record. 2.2 million rental availabilities in June of 2025

To further enhance exposure. We also feature apartments.com listings on the homes.com rental area, where traffic increased 26% year-over-year, due to homes.com, robust marketing efforts,

Speaker Change: Canadian apartments.com also continues to perform well with visits up 31% and leads up 62% year-over-year.

Speaker Change: Since Q2 last year we've grown our Canadian business by 300% ending June with over 1,500, paying properties.

Andy Florence: Our presence at this year's National Apartment Association of Partimentalized Convention in Las Vegas was highly successful. We hosted 1,500 clients at our kickoff party featuring Kenny Chesney, attracted 3,100 booth visitors, and generated over 500,000 in monthly net new bookings, translating to 6 million in annualized net new bookings. We showcased our latest AI-powered technology, including Matterport 3D Tours and AI Voice Search, an incredible interactive life-sized apartment exhibit called The Brad. We rolled out our new Matterport Max packages with great success. Clients and prospects who experienced the power of Matterport at our booth were impressed and convinced of its value in accelerating the leasing process.

Speaker Change: Our presence at this year's National Apartment. Association of apartmentalize convention in Las Vegas was highly successful.

Speaker Change: We hosted 1,500 clients that our kickoff Party. Featuring Kenny Chesney attracted, 3,100 Booth visitors and generate over 500,000 in monthly net. New bookings translating to 6 million in annualized. Net new bookings.

We showcased our latest AI powered technology, including matterport, 3D tours, and AI voice search and incredible interactive life-sized apartment exhibit called the Brad. We rolled out our new matterport Max packages with great success.

Clients and Prospects who experienced the power of matterport. Our booth were impressed and convinced of its value in accelerating the leasing process.

Andy Florence: These packages come with a Matterport Pro3 camera and allow clients to create a virtual tour of their units, all their units, common areas, and the entire building. Having a Matterport digital twin is becoming essential. 40% of apartment seekers look for communities in different cities and 41% are willing to rent site unseen if provided high quality imagery. Significantly, 53% they'll say that will stop considering a rental unit without detailed inventory. Consumers love the Matterport experience on Apartments.com. In Q2, they viewed Matterport's 67 million times, up 193% over the same period last year, spending 71% more time on listing detail pages with a Matterport 3D tour.

These packages come with a matterport Pro 3 camera, and I'll allow clients to create a virtual to another units. All their units, common areas and the entire building

Having a matterport digital twin is becoming essential.

Speaker Change: 40% of Apartment Seekers look for communities in different cities and 41% are willing to rent sight. Unseen if provide high quality imagery,

Speaker Change: Significantly 53%, they'll say they will stop considering a rental unit without detailed imagery.

Andy Florence: Listings with a Matterport 3D tour received 23 times more leads than those without.

Speaker Change: Consumers love the matterport experience on apartments.com in Q2, they viewed matter ports. 67 million times up 193% over the same period last year spending 71% more time on listing detail pages with the matterport 3D tour.

Speaker Change: Listings with a matterport 3D tour received 23 times more leads than those without.

Andy Florence: Later this year, apartments.com and homes will introduce an AI powered voice search allowing consumers to find properties by speaking naturally or typing free form phrases. No more filtering required. We've also been working with the largest property management firms in the country to provide greater fee transparency for the market. Last week, in one of the top property managers in the country, we launched disclosure of their one-time and monthly fees associated with renting an apartment, creating complete fee transparencies for consumers on apartments.com.

Speaker Change: Later this year apartments.com and homes will introduce an AI powered voice search allowing consumers to find Properties by speaking naturally or typing free form phrases, no more filtering required.

Speaker Change: We've also been working with the largest Property Management firms in the country to provide greater fee, transparency for the market. Last week, in 1 of the top property managers in the country, we launched disclosure of their 1-time and monthly fees associated. With renting, an apartment creating complete fee, transparency for consumers on apartments.com

Andy Florence: Homes.com delivered a strong second quarter achieving solidly positive sales growth after overcoming Q1 churn from the initial sales last year. Residential annualized net new bookings totaled $12 million for the quarter. Our expanding sales force drove consistent monthly growth, with May sales increasing 5% over April, and June sales increasing 15% over May. Revenue for Q2 grew by 8% compared to Q2 of 2024. We signed 6,300 net new members, representing a 56% increase in membership during the quarter. Our dedicated homes.com sales team significantly increased increased product demos, rising more than sixfold from March last year to June.

Homes.com delivered a strong second quarter achieving solidly positive sales growth after overcoming q1 churn from the initial sales last year.

Speaker Change: Residential annualized, net, new bookings, told 12 million for the quarter. Our expanding sales force, strobe consistent, monthly growth with May sales increasing 5% over April and June sales increasing 15%, over May

Speaker Change: 24, we signed 6,300, net new members. It representing a 56% increase in membership during the quarter.

Andy Florence: Our B2B marketing efforts generated the highest lead volume since launch, with over 3,600 leads to our sales team in June alone, resulting in more than 5,400 product demos with a conversion rate exceeding 50%. The Homes.com network attracted an average of 111 million unique monthly visitors in Q2, according to Google Analytics, putting us well ahead of our third and fourth ranked competitors. Our marketing campaign has successfully boosted unaided awareness and intent among users. Unaid Awareness has grown dramatically from 4% at the launch in 2024 to over 36% today or in Q2. Unaid intent has risen six points since April to reach 25%, signaling a major breakthrough in user engagement.

Speaker Change: Our dedicated homes.com sales team significantly, increased increased product demos Rising more than 6-fold for March last year to June.

Speaker Change: Our B2B marketing efforts generated the highest lead volume since launch with over 3,600 leads to our sales. Team, in June alone, resulting in more than 5,400 product demos with a conversion rate exceeding 50%,

Speaker Change: The homes.com Network attracted, an average of 111, million unique, monthly visitors in Q2 according to Google Analytics.

Speaker Change: Putting us, well, ahead of our third and fourth ranked competitors.

Speaker Change: Our marketing campaign has successfully boosted unaided awareness intent among users.

Speaker Change: On a awareness has grown dramatically from 4% at the launch in 2024 to over 36% today or in Q2.

Speaker Change: Unaided intent has risen 6 points since April to reach 625%, sign signaling, a major breakthrough in user engagement.

Andy Florence: Member agents listings on homes.com achieve 22 times greater reach compared to non members, significantly enhancing consumer engagement. Listings from members received seven times more detailed views, four times more favorites, and six times more shares, resulting in faster sales and higher selling prices. Leveraging these marketing advantages, Homes.com members secure 62% more listings than non-members with an outstanding return on investment, especially given the average new listing commission value of $15,000 against a monthly membership fee under $500. Our growing dedicated sales team is doing an increasingly effective job at educating agents about the value proposition of homes.com. We have observed significant improvement in client satisfaction reflected in rising net promoter scores.

Member agents listings on, homes.com achieved, 22 times greater reach. Compared to non-members significantly. Enhancing consumer engagement,

Speaker Change: Listings for members received 7 times more detailed views 4 times, more favorites and 6 times, more shares resulting in Faster, sales and higher selling prices.

Leveraging, these marketing advantages homes.com members secure 62% more listings than non-members, with an outstanding return on investment. Especially given the average new listing commission value of 15,000 dollars against a monthly membership fee under $500.

Speaker Change: Our growing dedicated sales team is doing an increasingly effective job at educating agents about the value proposition of homes.com.

Andy Florence: Our NPS grew from a modest 3 in Q4 of 2024 to 9 in Q1 of 2025, and then it jumped substantially to 38 in Q2, marking a 340% quarter-over-quarter increase. Additionally, our early cancellation or failed payment rate on 12 month contracts remained well below 1% throughout most of Q2.

Speaker Change: We have observed significant Improvement in client satisfaction reflected in Rising, net promoter scores.

Speaker Change: Our NPS Grew From A Modest 3 in Q4 of 2024, to 9 in q1 of 25, and then it jumps substantially to 38 in Q2 marketing, a 3 marking, a 340% quarter of a quarter increase.

Speaker Change: Additionally, our early cancellation or failed payment rate on 12-month contracts, remained well, below 1% throughout most of Q2.

Andy Florence: The newly launched Boost product has been successful. Boost provides sellers and their agents with a flexible marketing option, allowing single property listings to be boosted on homes.com to benefit from membership level marketing. Since Q2 launch, we've sold 1,270 boosts. Boosted listings reach over 14,000 homebuyers with an average of 32 views per buyer, making boosted listings 25% more likely to go under contract within 10 days. Can't pass that up. Nearly 25% of Boost users have converted to full homes.com memberships. So the Boost program is a great lead pipeline for our Salesforce.

Speaker Change: The newly launched boost product has been successful. Boost provides Sellers and their agents with a flexible marketing option allowing single property listings, uh, to be boosted on homes.com to benefit from membership, level marketing,

Speaker Change: Says, Q2 launch we sold 1,270 boosts.

Boosted listings reach over 14,000 home buyers, with an average of 32 views, per buyer, making boosted listings, 25% more likely to go under contract within 10 days.

Speaker Change: Can't pass that up.

Speaker Change: Nearly 25% of boost users have converted to full homes.com memberships. So the Boost program is a great lead pipeline for our sales force.

Andy Florence: This month, we launched a new advertising campaign for homes.com celebrating our success building an audience of over 100 million monthly unique visitors to the homes.com network. In this spot, Stan Levy and Heidi Gartner draw attention to homes.com's massive audience to reinforce to real estate agents the value of marketing their properties and listings on this valuable to this valuable audience cost effectively on homes.com. The spots also tell home shoppers that 100 million plus people have chosen to use homes.com. So perhaps they should check it out too. We believe that the majority of homebuyers once they try homes.com prefer homes.com.

This month, we launched a new advertising campaign for homes.com celebrating our success building an audience of over 100 million monthly unique visitors, to the homes.com Network.

Speaker Change: in the spot, Stan leaving, Heidi Gardner, draw, attention to homestack comms, massive audience, to reinforce the real estate agents, the value of marketing, their properties and listings on this valuable to this valuable audience, uh, cost-effectively on homes.com

Speaker Change: Spots also, tell home Shoppers that 100 million plus people have chosen to use homes.com so perhaps they should check it out too.

Speaker Change: we believe that the majority of home buyers, once they try homes.com prefer homes.com

Andy Florence: We strategically placed ads across popular networks including CBS, FOX, ESPN, contextually relevant shows such as Girl Meets Farm and American Pickers, and major sporting events like the Stanley Cup Playoffs, NBA Finals, PGA Championship, MLB, and WNBA regular seasons. Additionally, we expanded digital and streaming sponsorships with DraftKings and Roku, and audio and podcasting partnerships with Spotify and Amazon Music, collectively generating over $4 billion targeted paid media impressions.

Speaker Change: Over 4 billion. Targeted paid media impressions.

Andy Florence: We launched a highly customized direct mail member-agent appreciation campaign aimed at nearly 100,000 home sellers represented by Homes.com members. This personalized 20-page brochure, delivered shortly after a listing goes live, highlights the seller's home, their agent, and the marketing advantages provided by Homes.com. The campaign has received extremely positive feedback, reinforcing seller confidence, encouraging agent renewals.

Speaker Change: We launched a highly customized Direct Mail member agent appreciation, campaign aimed at nearly 100,000 home sellers represented by homes.com members.

Speaker Change: This personalized 20 Page, brochure delivered shortly after a listing goes live, highlights. The seller's home their agent and the marketing advantages, provided by homes.com

Andy Florence: I believe that this campaign will further increase our NPS scores.

Speaker Change: The campaign has received extremely positive feedback reinforcing seller confidence, encouraging agent renewals. I believe that this campaign will further increase our NPS scores

Andy Florence: This month, Zillow began questionably leveraging its market power by forcing agents to market listing on its platform within 24 hours of the listing being marketed or risk the listing being permanently banned. This tactic, we believe, raises serious antitrust concerns. Indeed, Compass has already filed a lawsuit against Zillow for such practice. Zillow banned its first listing despite it complying with Bright MLS and NAR regulations. Zillow falsely labeled the property as off-market on their website, misleading buyers. Zillow demands agents' listings immediately to avoid losing the opportunity to divert and sell leads from those listings.

This month, Zillow began questionably leveraging. Its Market Power. By forcing agents to Market listing on its platform. Within 24 hours of the listing, being marketed or risk, the listing, being permanently banned.

Speaker Change: This tactic We Believe raises serious antitrust concerns indeed. Compass has already filed a lawsuit against Zillow for such practices.

Speaker Change: Zillow band its first listing, despite it complying with bright MLS and Nar regulations. Zillow's falsely labeled the property is off-market on their website. Misleading buyers.

Andy Florence: Given recent relaxations and clear cooperation, no commingling rules still appears concerned that agents may opt for more agent friendly platforms like Homes.com, which do not divert lease. By demanding immediate listings and simultaneously offering Zillow exclusive listing, Zillow risks weakening the relative value of the MLSs.

Speaker Change: Zillow demands agents listings, immediately to avoid losing the opportunity to divert and sell leads from those listings.

Speaker Change: given recent relaxations and clear cooperation no co-mingling rules Zillow appears concerned that agents May opt for more agent friendly platforms like homes.com which do not divert leads

Andy Florence: A major brokerage has informed us that Zillow now seeks direct feeds from brokers, bypassing MLSs, suggesting MLSs may soon recognize Zillow as an existentialist threat. for an existential threat, not an existentialist.

Speaker Change: By demanding immediate listings and simultaneously offering Zillow exclusive listing, Zillow risks uh weakening the relative value of the mls's a major brokerage has informed us that Zillow. Now seeks direct feeds from brokers

Speaker Change: Bypassing mls's suggesting mls's May soon recognized Zillow as an existentialist threat.

Speaker Change: Or an existential threat, not an existential list.

Andy Florence: Homes.com is offering free boost to any home for sale that Zillow bans. The first home ban that we're aware of is in Montgomery County, Maryland. And with a Homes.com boost, we've been able to serve it up to buyers 155,000 times in the first 12 days, it was on the market. 205 buyers have favored the listing on Homes.com, and 43 have shared it with a friend or family member. I visited that open house on that listing this weekend to support the agent, and there was good traffic. The agent told me they've already had 30 showing.

Homes.com is offering free boost to any home for sale that Zillow bands.

The first home band that we're aware of is in Montgomery County Maryland and when a homes.com boost we've been able to uh serve it up to buyers 155,000 times in the first 12 days. It was on the market 205 buyers have favored the listing on homes.com and 43 have shared it with a friend or family member

Andy Florence: Homes.com provides a compelling agent friendly alternative to Zillow's aggressive tech. The reason is simple. Homes.com benefits all parties involved, home buyers, sellers and agents, and MLSs. We eliminate friction by providing a professional online presentation of every home and community without distracting ads or spam. And we're connecting buyers honestly, directly with a seller's agent. Member listings and boosts reach more buyers more frequently. Members build their brand by being prominently featured across our site and retarget across thousands of websites.

Speaker Change: I visited that open house on that listing this weekend to support the agent. And there was good traffic. The agent told me they've already had 30 showings.

Homes.com provides a compelling agent. Friendly alternative to zillow's aggressive tactics.

Agents are liking what we are doing. Our Impressions on homes.com social media channels. Targeted agents have increased 1,247 Q2 25 compared to q125. We're seeing considerable social listening growth with our net sentiment score up 58% since last quarter

Speaker Change: from April to June 25th, is increased by 48%, with a 30% growth in positive sentiments

Speaker Change: The reason is simple.

Speaker Change: Homes.com benefits all parties involved. Home, buyers, Sellers and agents and mls's. We eliminate friction by providing a professional online presentation of every Home and Community without distracting ads or spam. And we're connecting buyers honestly directly with a seller's agent.

Speaker Change: Member listings and boosts reach, more buyers more frequently.

Andy Florence: No other U.S. portal offers this level of exposure for agents and listeners.

Members build their brand by being prominently featured across our site and retarget across thousands of websites. No. Other us portal offers this level of exposure for agents and listings.

Andy Florence: In August, we plan to launch a robust new home section on homes.com. This is a vital segment as approximately 60% of homebuyers prefer new construction, according to the National Association of Home Builders.

Speaker Change: in August, we plan to launch a robust, new home section on homes.com

This is a vital segment as approximately 60% of home. Buyers prefer new construction, according to the National Association of homebuilders.

Andy Florence: I'm glad they're at that conference. We have already secured 200 agreements with leading builders, positioning this new feature as a significant future revenue stream, enabling us to capitalize on a substantial market opportunity.

Speaker Change: I'm glad they're that confident. We have already secured 200 agreements with leading Builders positioning. This new feature as a significant future Revenue stream and enabling us to capitalize on a substantial Market opportunity.

Andy Florence: It was another strong quarter for UK residential marketplace on the market. Our inventory continues to grow with over 800,000 listings now on site up 20% year over year and a new record for the business. We're delivering a significant ROI to over 16,300 subscribing customers with leads up 12% in the quarter year over year and total page views on the site up 28% for the same period. We're building an audience of serious property seekers with average time on site per active user up 85% year over year, and lead to visit conversions that we believe are beating Right Moves conversion rate.

Speaker Change: It was another strong quarter for our UK residential Marketplace on the market, our inventory continues to grow with over 800,000 listings. Now, on site up 20% year-over-year and a new record for the business,

Speaker Change: Year-over-year and total page views on the site up 28%, for the same period.

We're building an audience of serious property Seekers with average time on site per active user up 85% year-over-year.

And lead to visit conversions that we believe are beating Right Moves, conversion rate.

Andy Florence: Net new bookings reached a record of 100,000 in June, which was the 14th consecutive month of net new revenue growth equivalent to an impressive $9.4 million of annualized revenue. We're continuing to develop the product using the homes.com playbook as we further differentiate from our competitors.

Speaker Change: Net, new bookings reached. Uh, a record of 100,000 in June, which was the 14th consecutive month of net. New Revenue, growth equivalent to an impressive 9.4 million of annualized Revenue.

Speaker Change: We're continuing to develop the product using the homes.com Playbook, as we further differentiate from our competitors.

Andy Florence: We are in the final stages of acquiring Domain Holdings, one of Australia's two largest real estate portals and among the top 10 real estate marketplaces globally. We anticipate the transaction will close in the third quarter of this year, and we're very excited about combining CoStar's capabilities with Domain.

Speaker Change: We are in the final stages of acquiring domain Holdings, 1 of Australia's 2 largest real estate portals, and among the top 10 real estate marketplaces globally.

Speaker Change: we anticipate the transaction will close in the third quarter of this year and we're very excited about combining co-stars capabilities with domain

Andy Florence: Recently, a new dynamic has emerged in the Australian market. The country's antitrust regulator, the ACCC, has announced an investigation into REA Group, which is Domain's primary competitor. In July, numerous real estate agents in Australia reported that REA Group increased their monthly subscription fees by up to 78 percent, likely prompting that investigation. We believe the situation creates an excellent opportunity for Domain to position itself as the more reasonable and stable service provider. Our CoStar product achieved $271 million in revenue in Q2'25. Revenue growth accelerated sequentially from Q1, increasing 7% year-over-year in Q2. Net new bookings from our CoStar product accelerated from last quarter as we achieved our highest quarter of CoStar net new bookings since Q3'23.

Speaker Change: Recently, a new Dynamic has emerged in the Australian Market, the country's antitrust regulator the a Triple C has announced an investigation into Rea Group which is domain's primary competitor.

Speaker Change: In July numerous real estate agents in Australia. Reported that Rea group increased their monthly subscription fees by up to 78% likely prompting that investigation

Speaker Change: We believe the situation creates an excellent opportunity for TMA for domain to position itself as the more reasonable and stable service provider.

Speaker Change: It's worth knowing that Rea group in Australia and realtor.com in the US share common ownership under News Corp in the Murdoch family. Media reports speculate that realtor.com CEO might return to Australia to replace ra group's currency. Yeah, if that were to occur, it would mean 2, disability changes. In our favor in 1 move.

Speaker Change: Our co-star product achieved 271 million in Revenue, in Q2, 255 Revenue, growth accelerates, sequentially from q1 increasing 7% year-over-year in Q2.

Andy Florence: SDR had its best quarter for net new bookings, up 24% year-over-year as compared to Q2'24. For more information visit www.costar.com This is the third consecutive quarter of increasing net new bookings for CoStar as we generate strong sales with banks, institutional investors and owners. I'm happy to see net new bookings for brokers trending upward each quarter this year. We remain on track to increase the CoStar product sales force by 20% in 2025, reaching a total of 400 sales representatives to position us to capture the substantial and growing total addressable market there. Our lender sales continue to exhibit strong growth as our expanded sales team meets the increasing demand for our product.

That new bookings from our co-star product accelerated from last quarter. As we achieved our highest quarter of co-star. Net new booking since Q3 2023.

Speaker Change: Str had its best quarter for net. New bookings up 24% year-over-year as compared to Q2 24.

Speaker Change: This is the third consecutive quarter of increasing net, new bookings for co-star. As we generate strong sales with banks, institutional, investors and owners.

Speaker Change: I'm happy to see net, new bookings, for Brokers trending upward each quarter this year.

Speaker Change: We remain on track to increase the co-star product sales force by 20% in 2025, reaching a total of 400 sales representatives to position us to capture the substantial and growing total addressable Market there.

Andy Florence: With over 400 clients and revenue approaching $100 million, we've established a strong foundation pretty quickly that we'll continue to build on as we roll out additional capabilities and expand our sales force to target the larger $1 billion TAM in the lender space. Our quarterly CoStar renewal rate increased to 93%. Our net promoter score for the US sales team reached an outstanding 70%. That was a major first for us and been a solid progression for a couple of years there. Our Canadian teams NPS grew to 63%, again, an all time high for both teams. In addition, gross productivity per rep has improved in each of the last six months.

Speaker Change: Our lender sales continued to exhibit. Strong growth is our expanded sales. Team meets the increasing demand for our product with over 400 clients and revenue approaching a 100 million, we've established a strong Foundation. Pretty quickly that will continue to build on as we roll out additional capabilities and expand our sales force to Target the larger 1 billion dollar Tam in the lender space,

Speaker Change: Our quarterly co-star renewal rate increased to 93% our net promoter score for the Us sales team, reaching out standing 70%. That was a major first for us and been a solid progression for a couple of years there. Our Canadian teams NPS grew to 63% again, an all-time high for both teams.

Andy Florence: The number of subscribers for CoStar grew to 275,000, up 19% year-over-year, driven predominantly by the ongoing migration of SDR users into CoStar and the addition of new SDR subscribers to the CoStar platform.

Speaker Change: In addition, gross productivity per rep has improved in each of the last 6 months.

The number of subscribers for co-star grew to 275,000 up. 19% year-over-year driven predominantly by the ongoing migration of Str users into co-star and the addition of new Str subscribers to the co-star platform,

Andy Florence: I'm very pleased with our continued growth in a challenging market. The CRE market continues to face difficulties, particularly in the office segment, with persistently high vacancy rates, though moderating and slightly worsening negative net absorption rates. We're seeing a sharp decline in new deliveries, which should help stabilize the office market in the near future. Transaction volumes have maintained a positive seasonal trend with Q2 up 43% year-over-year. The increase in deal flow was consistent across the five main property types, with office transaction volumes spiking 71%, retail increasing 46%, multifamily rising 42%, industrial growing 29%, and hospitality up 18% for the same period.

Speaker Change: I'm very pleased with our continued growth. In a challenging Market. The CRA Market continues to face difficulties particularly in the office segment with persistently High. Vacancy rates though moderating and slightly worsening negative. Net absorption rates. We're seeing a sharp decline in new deliveries, which should help stabilize the office Market in the near future.

Speaker Change: Transaction volumes have maintained a positive seasonal Trend with Q2 up 43% year-over-year.

Speaker Change: transaction volume spiking 71% retail, increasing 46%

Speaker Change: Multi-family Rising 42% industrial growing 29% and Hospitality up 18% for the same period.

Andy Florence: Our international businesses have achieved four consecutive quarters of all time high net new bookings, with an impressive 90% year over year growth in Q2 25 compared to Q2 24. In the UK, we're solidifying our market leading positioning, leading, boosting our year to date net new bookings by 257% compared to the first half of last year, and accelerating year over year revenue growth to 14% in Q2 25 versus Q2 24. Concurrently, we've streamlined our cost structure, realizing $40 million in cost savings this year, which represents 19% of our 2024 expense base in Europe.

Speaker Change: Our International businesses have achieved 4 consecutive quarters of all-time high net. New bookings with an impressive. 90% year-over-year growth in Q2 25 compared to Q2 24.

In the UK worse solidifying our market-leading positioning leading uh boosting our year-to-date. Net new bookings by 257% compared to the first half of last year and accelerating year-over-year Revenue growth to 14% in Q2 25 versus Q2 24.

Speaker Change: Concurrently we've streamlined, our cost structure realizing 40 million in cost savings this year. Which represents 19% of our 2024 expense space in Europe.

Andy Florence: Our European sales initiatives are led by Alexa Maria Rathborn Barker, who was recently promoted to lead the CoStar business in Europe. Alexa joined CoStar Group as head of European sales three years ago following a decade-long tenure at Bloomberg, where she held senior leadership roles focused on international growth and led the European analytics team. In her new capacity, Alexa will drive the continued expansion of her UK business and oversee the broader growth of CoStar across Europe. We're positioning our European business to take advantage of the substantial international growth opportunity. In Europe, over 50% of the value of CRE transactions are cross-border, yet there are no comprehensive pan-European CRE solutions.

Speaker Change: Our European sales initiatives are led by Alexa, Maria Roth. Barker

Speaker Change: Who was recently promoted to lead the co-star business in Europe. Alexa joined, co-star group. As head of European sales 3 years ago, following a decades long. A decade long tenure at Bloomberg. Where she held senior leadership roles focused on International growth and led the European analytics team.

Speaker Change: And her new capacity, Alexa will drive the continued expansion of our UK business and oversee, the broader growth of co-star across Europe.

Andy Florence: We have been methodically expanding our European research and marketplace capabilities. We anticipate launching CoStar in France by the end of the year.

Speaker Change: We're positioning our European business to take advantage of the substantial International growth opportunity in Europe over. 50% of the value of CRA transactions are cross-border yet. There are no comprehensive paneuropean CRA Solutions.

Speaker Change: We have been methodically expanding our European research and Marketplace capabilities. We anticipate launching co-star in France by the end of the year.

Andy Florence: LubeNet delivered an outstanding performance in the second quarter, it generated more net new business in the first half of 2025 than the entirety of 2024. Net new bookings in the first half of 2025 surged by 345% compared to the same period last year. Consequently, revenue growth accelerated sequentially from Q1 and increased by 8% year-over-year. We expect LoopNet's revenue growth to exceed 10% in the second half of 2025, moving to double-digit growth. Despite ongoing challenges and volatility in the commercial real estate market, we've implemented significant changes to unlock LoopNet's full potential. As previously discussed, our focus on selling LoopNet packages that enable advertisers to promote their entire portfolio rather than a selected few properties.

Speaker Change: Loubet delivered an outstanding performance in the second quarter. It generated more net new business in the first half of 2025 than the entirety of 2024 that new bookings in the first half of 2025, surged by 345% compared to the same period last year.

Speaker Change: Uh, consequently Revenue growth, accelerate accelerated sequentially from q1 increased by 8% year-over-year. We expect Loop Nets Revenue growth to exceed 10% in the second half of 2025 moving to double digit growth.

Speaker Change: Despite ongoing challenges and volatility in the commercial real estate market. We've implemented significant changes to unlock Loop Net's. Full potential

Andy Florence: This approach delivers a high return on investment for our clients, increases listing coverage on LoopNet, and enhances both the consumer and customer experience. Furthermore, the rollout of asset-based pricing continues to yield positive outcomes. With each passing month, our service is increasingly priced relative to the value we deliver to clients, resulting in year over year increase in monetization per list. LoopNet is the world's most active commercial real estate marketplace. Tenants and investors begin their search online and LoopNet is their preferred destination. Properties listed on LoopNet sell and lease faster. For instance, one of the largest global brokerage firms and longtime client of CoStar recently significantly increased their investment in LoopNet marketing after we quantitatively demonstrated that listings on LoopNet were 60 percent more likely to close in a given time period than those not listed on the platform.

Speaker Change: As previously, discussed our focus on selling loopnet packages, that enable advertisers to promote their entire portfolio, rather than a Selected Few properties. This approach delivers a high return on investment for our clients increases listing coverage on loopnet and enhances. Both the consumer and customer experience. Furthermore, the rollout of asset best pricing continues to yield positive outcomes.

Speaker Change: With each passing month, our service is increasingly priced relative to the value. We deliver to clients resulting in year-over-year, increase in monetization per listing.

Speaker Change: Lumina is the world's most active commercial, real estate Marketplace tenants and investors begin their search online and Lupin has their preferred destination.

Speaker Change: Properties listed on loopnet sell and Lease faster. For instance, 1 of the largest global brokerage terms in longtime client of co-star recently significantly increased their investment in loopnet marketing. After we quantitatively demonstrated that listings on loopnet, were 60% more likely to close in a given time period than those not listed on the platform.

Andy Florence: We built the largest audience of commercial real estate shoppers globally with hundreds of thousands of properties available for sale and lease. In 2024, $120 billion worth of transactions occurred on LoopNet, where tenants or buyers viewed listings on our site before pursuing the deals they ultimately closed. Our effort to expand LubeNet's global footprint are progressing well. We launched LubeNet in Spain and we expect to launch LubeNet France in Q4. This will bring our total listings across Europe to over 100,000, with significant potential for further expansion as we address the evident market need for a pan-European and global commercial real estate marketplace.

Speaker Change: we built the largest audience of commercial, real estate Shoppers globally with hundreds of thousands of properties available for sale and Lease

Speaker Change: In 2024. 120 billion worth of transactions occurred on loopnet where tenants or buyers viewed the listings on our site before pursuing the deals, they ultimately closed.

Speaker Change: Our effort to expand loopnet Global footprint are progressing. Well, we launched loopnet in Spain and we expect to launch Luben France and Q4.

Andy Florence: With the expected close on the domain acquisition in Q3 2025, Australia will soon become part of the LoopNet network.

Speaker Change: This will bring our total listings to cross Europe, to over 100,000, with significant potential, for further expansion, as we address. The evident Market need for a pan European and global commercial real estate Marketplace.

Andy Florence: That'll be a good day.

Speaker Change: Will soon become part of the loopnet network.

Speaker Change: That'll be a good day.

Andy Florence: Land.com achieved the highest quarter of net new bookings since Q3 2022. This was a result of improved segmentation and servicing of clients. Clients elected to migrate their marketing exposure from the lower and middle advertising plans to the highest plan. Signature ads increased by 49%.

Speaker Change: Land.com achieved the highest quarter of net new booking since Q3 2022. This was a result of improved segmentation servicing of clients.

Speaker Change: Clients elected to my migrate, their marketing exposure from the lower and middle advertising plans to the highest plan.

Andy Florence: Land professionals will benefit from a tremendous increase in reach and value because of the promotion of land's paid listings on homes.com and the integration of our recently acquired acre value.

Speaker Change: Signature adds increased by 49%.

Speaker Change: Land professionals will benefit from a tremendous increase in reach and value because of the promotion of lands paid listings on homes.com. And the integration of our recently, acquired acre value,

Andy Florence: CoStar Real Estate Management continues to grow revenue and drive centers between visual lease and real estate manager. Subscription revenue grew 9% in Q2 25 compared to Q2 24.

Speaker Change: co-star, Real Estate Management continues to grow our revenue and drive centers between visual lease and real estate manager.

Andy Florence: I recently had the opportunity to spend some time in Atlanta working with the product teams and integration of CoStar between Visual Lease and Real Estate Manager along with Matterport and LoopNet. I'm confident this will be an amazing solution for anyone that leases commercial space.

Speaker Change: Subscription Revenue grew 9% in Q2 25, compared to Q2 24.

I recently had the opportunity to spend some time in Atlanta working with the product teams and integration of co-star uh uh

Speaker Change: Between visual lease and, uh, uh, real estate manager, along with matterport and loopnet. I'm confident, this will be amazing solution for anyone that leases commercial space.

Andy Florence: Business by sale revenue reached $8.8 million in the second quarter, a 9% increase year over year. Business for sale net new bookings increased 200% from Q2 2024, driven by strong growth in both business owner and broker subscription. Subscription revenue from Business Buy Sell Edge, which offers entrepreneurs advanced tools and marketing insights, grew 50% year over year. Buyer demand continued to strengthen with lead volume increasing 23% Q2 year over year. Business owners are increasingly turning to BizBuySell for valuation estimates, educational content, and other resources. Over 25,000 new business owners registered on BizBuySell during the quarter, with 5,000 creating detailed business profiles that shared location, industry, revenue, and profit.

Speaker Change: Is Buy sell Revenue reached 8.8 million in the second quarter, a 9% increase year-over-year.

Speaker Change: For sale, net new bookings, increased 200% from Q2 2024 driven by strong growth in both business owner and broker subscriptions.

Speaker Change: Subscription revenue from business Buy sell Edge, which offers entrepreneurs Advanced tools and marketing insights grew 50% year-over-year.

Speaker Change: By our demand continued to strengthen with lead, volume increasing 23% Q2 year-over-year.

Andy Florence: Importantly, thousands of these owners also turned to Biz by CellageCore to connect with our network of business brokers subscribers for expert guidance and listing representation. In Q2, brokers reported 2,342 sold business transactions on the platform, totaling nearly $2 billion in enterprise value. Brokers are rapidly adopting our recently released deal accelerator feature, which streamlines dealmaking by automating buyer qualification and information sharing processes, helping brokers close more deals and earn higher commission.

Speaker Change: To business by sell for evaluation estimates, educational content and other resources, over 25,000 new business, owners registered on bizbuysell during the quarter. With 5,000, creating detailed business growth files that that shared location, industry, revenue and profit,

Speaker Change: Importantly, thousands of these owners also turned to Biz, Buy sell each quarter to connect with our network of business, brokers subscribers, for expert, guidance, and listing representation.

Speaker Change: In Q2 Brokers reported 2,342 sold business transactions on the platform. Totaling nearly 2 billion in Enterprise Value.

Speaker Change: Brokers are rapidly. Adopting our recently released deal accelerator feature, which streamlines deal making by automating buyer, qualification and information sharing processes helping Brokers close more deals and earn higher commissions.

Andy Florence: Finally, turn to Matterport, saving the best for last. Matterport is clearly the world's leading provider of digital twin solutions technology. Primary competition comes from the hundreds of billions of traditional two-dimensional images used to market real estate and manage facilities. However, these 2D photos fall significantly short of Matterport's immersive capabilities, which intuitively transport transport remote viewers into a space, provide an experience second only to physically being there, hence porting Matter. While Matterport offers an exceptional product, the business has not yet achieved profitability, and its growth rate has slowed.

Speaker Change: Finally turn to matterport uh, saving the best for last.

Speaker Change: Matterport is clearly the world's leading provider of digital twin Solutions, technology.

Speaker Change: Its primary competition comes from the hundreds of billions of traditional 2-dimensional images used to Market, real estate and manage facilities.

However these 2D photos fall significantly short of matter ports immersive capabilities which intuitively transport transport remote viewers into a space providing experience second only to physically being there hence porting matter.

Andy Florence: We strongly believe that integrating Matterport with CoStar Group will help the company thrive, accelerate growth, and achieve strong profit margins. An integrated Matterport solution will significantly enhance the value of CoStar's marketplaces and information platforms. Currently, Matterport has a very small sales force, I believe fewer than 30 quota carrying salespeople globally, not quite one per major country, which means many of Matterport's most promising revenue opportunities have never been contacted by a Matterport salesperson. That will change. We plan to significantly expand Matterport's sales force and market its integrated solutions through the thousands of CoStar sales representatives at Homes.com, LoopNet, Domain, Real Estate Manager, Land, Apartments.com, and other platforms. Historically, Matterport has operated as a product led company with strong business consumer focus, which resulted in less emphasis on sales efforts or field sales efforts, and less focus on its most powerful technology, the Matterport 3 camera.

Speaker Change: Well, matterport offers an exceptional product. The business has not yet achieved profitability and its growth rate has slowed. We strongly believe that integrating matterport with co-star group will help the company Thrive accelerate growth and Achieve strong profit margins in integrated matterport solution will significantly, enhance the value of co-stars marketplaces and information platforms.

Speaker Change: Currently a matterport, has a very small sales force. I believe fewer than 30 quota carrying salespeople globally. Not quite 1 per major country.

Which means many of matter port's most promising Revenue opportunities have never been contacted by a matterport sales person that will change. We plan to significantly expand matterport Salesforce and in Market, its Integrated Solutions through the thousands of co-star sales, representatives at homes.com loopnet domain, real estate manager, land apartments.com, and other platforms.

Andy Florence: We intend to shift Matterport towards a business to business or B2B approach. The Matterport Pro 3 camera delivers a superior capture experience, and a very superior display experience compared to mobile device Customers using the pro three camera have an 85% renewal rate for our SAS services, while those using an Android phone only have a 40% renewal rate. We plan to invest time and capital in developing even more advanced cameras, appropriately named the Matterport Pro 4. and the Pro4 Ultra expects to be revealed one day. We will work to make our highest-end cameras more price-accessible to the hundreds of thousands of potential users around the world.

Speaker Change: The historically, matterport, has operated as a product-led company with strong business consumer Focus, which resulted in less emphasis on sales efforts or field sales efforts, and less focus on its most powerful technology. The matterport 3 camera.

Speaker Change: We intend to shift matterport towards a business to business or B2B approach the matterport. Pro 3 camera, delivers a superior capture experience and a very Superior display experience compared to mobile devices.

Speaker Change: 3 camera have an 85% renewal rate for our SAS services.

Speaker Change: While those using an Android phone only have a 40% renewal rate.

Speaker Change: We plan plan to invest time and capital in even more advanced cameras.

Speaker Change: Uh, appropriately named the matterport Pro 4.

And uh, the Pro 4 ultra expects to be revealed 1 day.

Speaker Change: We will work to maintain our highest end cameras more make our highest end cameras more price accessible to the hundreds of thousands of potential users around the world.

Andy Florence: Right now, the first Matterport taken with a Pro3 effectively costs a photographer $6,500. The first picture costs you $6,500. The second costs $3. The third, the fourth, the fifth, each costs $3. As a result, many potential users never get to the second Matterport or the first Matterport.

Andy Florence: This is easy enough to profitably change and solve. We're integrating Matterport's amazing capabilities more deeply into all of our portals and information solutions. I think that in combination, we can bring properties to life like never before. We're relaunching the Matterport brand, adding the signature CoStar Group star wheel logo to the front of the Matterport name, and we're going to co-brand Matterport with our portal brands appropriately to the property type. While we invest in profitable growth initiatives at Matterport, we have a sharp eye on getting to profitability so that we ultimately are positioned to achieve our goal of digitizing the world's real estate.

Right now, the first matter Port taken with a Pro 3, effectively costs, a photographer 6,500. The first picture cost you 6,500, the second cost $3 the third, the fourth, the fifth each cost $3 as a result, many potential users, never get to the second matter for the first matterport.

Speaker Change: this is easy enough to profitably change and solve for

Speaker Change: We're integrating matter. Port's amazing capabilities more deeply into all of our portals and Information Solutions. I think that in combination we can bring properties to life like never before.

Speaker Change: We're relaunching, the matterport brand, adding the signature co-star group, star Wheel logo to the front of the matterport name. And we're going to co-brand matterport with our portal Brands, uh, appropriately to the property types.

Andy Florence: Yesterday, we began winding down operations of Matterport's photography business VHT. Matterport acquired VHT in June of 2022, but has not realized its strategic potential. VHT primarily operates as a loss-making real estate photography service, largely focused on the Chicago market. Approximately 75% of VHT's photography services do not include a Matterport tour, and none of their contractors are using the high-quality Pro3 camera. VHT generated roughly $14 million in annual revenue, but incurred losses exceeding $10 million.

Speaker Change: While we invest in profitable growth initiatives at matterport. We have a sharp eye on getting to profitability so that we all ultimately are positioned to achieve our goal of digitizing the world's real estate.

Speaker Change: Yesterday we began winding down operations of matterport photography, business vht.

Speaker Change: Matterport acquired vht in June of 2022 but is not realized its strategic potential.

Speaker Change: Vht primarily operates as a loss-making real estate photography, service largely focused on the Chicago Market approximately 75% of vhts Photography services. Do not include a matterport tour.

And none of their contractors are using the high-quality Pro 3 camera.

Andy Florence: It's a non-strategic asset, so we're going to reallocate resources to more productive areas.

Speaker Change: The HT generated roughly 14 million in annual revenue, but incurred losses exceeding, 10 million.

Speaker Change: It's a non-strategic asset. So we're going to reallocate resources to more productive areas.

Andy Florence: In conclusion, I'm thrilled with our strong financial results and CoStar record annualized net new bookings quarter of 93 million, a remarkable 65% increase over the prior quarter. Again, $93 million in net new bookings in the quarter.

Speaker Change: In conclusion, I'm thrilled with our strong financial results. In co-star record annualized, net, new bookings quarter of 93 million. A remarkable 65% increase over the prior quarter.

Andy Florence: With a $100 billion total addressable market in the world's largest asset class, we remain committed to our mission of digitizing global real estate.

Speaker Change: Again, 93 million in net, new bookings in the quarter.

Chris Lown: At this point, I will finally turn the call over to our CFO, Chris. Thank you, Andy. Good evening. I'm happy to report that CoStar has now reached its 57th consecutive quarter of double digit revenue growth coming in at 15%. We also achieved a commercial information and marketplace brands margin of 43% in the second quarter. As a reminder, this margin excludes homes.com on the market and the recently acquired Matterport. Net new bookings for the second quarter were a record $93 million, representing a 65% sequential increase from the first quarter and a 38% increase year-over-year. Apartments.com, CoStar, and LoopNet all contributed strong bookings growth as our growing dedicated sales forces are delivering.

With a 100 billion total addressable Market in the world's largest asset class, we remain committed to our mission of digitizing global real estate.

Speaker Change: At this point, I will finally turn the call over to our CFO Chris loan.

Thank you, Andy. Good evening. I'm happy to report that co-stars. Now, reached its 57th consecutive quarter of double digit Revenue, growth coming in at 15%.

Speaker Change: we also achieved a commercial information and Marketplace Brands margin of 43% in the second quarter as a reminder, this margin excludes homes.com on the market and the recently acquired matterport

Speaker Change: Net new bookings for the second. Quarter were a record, 93 million representing a 65% sequential increase from the first quarter on a 38% increase year-over-year.

Speaker Change: and lugnet all contributed strong bookings growth as our growing dedicated sales forces are delivering

Chris Lown: Revenue for the second quarter was $781 million, exceeding the high end of guidance. Matterport revenue was $44 million in the second quarter, beating our guidance estimate and contributing to our performance in the second quarter. Second quarter adjusted EBITDA came in at $85 million, an 11% margin, also exceeding the high end of our guidance range. The outperformance in Adjusted EBITDA was a result of timing of investment spend and our revenue beat this quarter. CoStar revenue grew 7% in the second quarter, ahead of guidance. Sales rep productivity has steadily improved over the past six quarters, and second quarter productivity was the highest since Q3 2023.

Speaker Change: Revenue for the second quarter was 781 million exceeding, the high end of guidance.

Speaker Change: Matterport Revenue was 44 million in the second quarter, beating our guidance estimate and contributing to our outperformance in the second quarter.

Speaker Change: Second quarter adjusted ebit da came in at 85 million and 11 margin.

Speaker Change: Also, exceeding, the high end of our guidance range.

Speaker Change: The outperformance and adjusted ebit da was a result of timing of investment spend and our Revenue, beat this quarter.

Speaker Change: Co-star, Revenue grew 7% in the second quarter ahead of guidance.

Sales rep productivity has steadily improved over the past 6 quarters and second quarter of productivity was the highest since Q3 2023.

Chris Lown: The strong second quarter performance, combined with internal leading indicators, compels us to increase our full-year revenue growth guidance to 7%. We expect growth in the third quarter to also be 7%. Residential revenue was $28 million in the second quarter. We expect third quarter residential revenue to increase three to $4 million sequentially. And we now expect residential revenue growth of over 20% in 2025. Apartments.com's second quarter revenue growth came in at 11% year-over-year, ahead of the 10% guidance we provided last quarter. Sales Rep productivity improved to its highest level in two years, an impressive feat considering we are also at our highest number of sales reps.

Speaker Change: The strong second quarter performance combined with internal leading indicators compels us to increase our full year Revenue growth guidance to 7%.

Speaker Change: We expect growth in the set in the third quarter to also be 7%.

Speaker Change: Residential Revenue was 28 million in the second quarter.

We expect third quarter, residential Revenue to increase 3 to 4 million sequentially.

Speaker Change: In 2025.

Speaker Change: Apartments that comes second quarter Revenue. Growth came in at 11% year-over-year,

Speaker Change: As.

Chris Lown: Our first half of 2025 results are broadly in line with expectations. And we remain on track to achieve the 11 to 12% full year revenue growth guidance we provided last quarter. Third quarter revenue growth is also expected to be 11 to 12 percent. LoopNet revenue grew 8% in the second quarter, one percentage point higher than last quarter's guidance. LoopNet's dedicated sales force continues to perform. In fact, the sales team delivered LoopNet's highest first half net new bookings ever. The shift in sales strategy to focus on selling broad subscription packages and utilize asset-based pricing has been working well, and we anticipate the benefits of this strategic shift to continue.

Speaker Change: Sales rep productivity improved to its highest level. In 2 years, an impressive feat. Considering we are also at our highest number of sales reps.

Speaker Change: Our first half of 2025 results are broadly in line with expectations and we remain on track to retrieve the to achieve the 11 to 12% full year Revenue growth guidance. We provide last quarter.

Speaker Change: Third quarter Revenue, growth is also expected to be 11 to 12%.

Speaker Change: Loopnet Revenue. Grew 8% in the second quarter 1 percentage Point higher than last quarter's guidance.

Speaker Change: Loop Nets dedicated sales force continues to perform.

Speaker Change: In fact, the sales team delivered Loop Net's. Highest first half net new bookings ever.

The shift in sales strategy to focus on selling broad subscription packages and utilize asset based pricing has been working. Well,

Speaker Change: And we anticipate the benefits of the Strategic shift to continue.

Chris Lown: This first half performance and strong momentum gives us the confidence to increase our 2025 revenue growth expectations to eight to nine percent. Third quarter revenue growth is now expected to be between 10 and 11 percent. Revenue from information services was $39 million in the second quarter. We are updating our guidance for information services revenue growth to 16 to 18 percent and expect third quarter revenue growth of approximately 20 percent. Other revenue was $75 million in the second quarter, with Matterport contributing $44 million. For the third quarter, we expect other revenue of approximately $75 million, including approximately $40 million from Matterport.

Speaker Change: this first half performance, and strong momentum, gives us the confidence to increase our 2025 Revenue growth, expectations to 8 to 9

Speaker Change: Third quarter Revenue, growth is now expected to be between 10 and 11%.

Revenue from Information Services. Was 39 million in the second quarter.

Speaker Change: We are updating our guidance for Information Services. Revenue growth to 16 to 18 percentage.

Other Revenue was 75 million in the second quarter with matterport contributing 44 million.

Speaker Change: For the third quarter, we expect other revenue of a bucks from 75 million.

Speaker Change: Including approximately 40 million from adapt port.

Chris Lown: Through our integration and streamlining efforts, we are discontinuing certain non-core Matterport revenue that did not positively contribute to earnings, which is why we are expecting Q3 revenue to be below the level realized in Q2. The impact from the discontinued revenue to our full year outlook is around $10 million. As such, we are revising the top end of our revenue guidance and now expect other revenue between $270 and $275 million. Adjusted EBITDA for the second quarter was $85 million at an 11% margin, meaningfully above the high end of our $50 to $60 million second quarter guidance.

Speaker Change: Through our integration and streamlining efforts, we are discontinuing certain non-core matterport Revenue that did not positively contribute to earnings which is why we are expecting Q3 Revenue to be below the level of realizing Q2.

Speaker Change: The impact from the discontinued Revenue to our full year outlook is around 10 million.

Speaker Change: As such we are revising, the top end of our Revenue guidance and now expect other revenue between 270 and 275 million.

Speaker Change: Adjusted ebit off for the second, quarter was 85 million at an 11% margin.

Meaningfully, the high end of our 50 to 60 million second quarter guidance.

Chris Lown: A favorable performance relates to higher than projected revenue, lower than anticipated professional services costs, and timing of certain growth initiatives. We have made great progress on bolstering our sales force, which has reached 1800 reps at quarter end. This is an increase of more than 400 salespeople since the beginning of the year and a 43% increase in reps year over year. While sales headcount has reached the most at homes.com, has increased the most at homes.com, we are delivering sales rep growth in all our major brands. Our contract renewal rate was 89% for the second quarter, with the renewal rate for customers who have been subscribers for five years or longer at 95%.

A favorable performance relates to higher than projected Revenue.

Speaker Change: Lower than anticipated Professional Services costs and timing of certain growth initiatives.

Speaker Change: We have made great progress on bolstering our sales force which has reached 1800 reps at quarter end.

Speaker Change: This is an increase of more than 400 salespeople since the beginning of the year and a 43% increase in reps year-over-year.

Speaker Change: While sales, while sales headcount has reached the most at home.com, as increase the most at homes.com, we are delivering sales rep growth in all our major brands.

Speaker Change: Our contract renewal rate was 89% for the second quarter.

Speaker Change: with the renewal rate, for customers who have been subscribers for 5 years, or longer at 95%,

Chris Lown: Subscription revenue on annual contracts was 78% for the second quarter. Matterport's inclusion decreased this metric by two percentage points. On June 30th, our June 30th balance sheet includes $3.7 billion in cash, which are a net interest income of $33 million in the second quarter, a 3.5% rate of return. We repurchased 585,000 shares in the second quarter for $45 million, bringing our year-to-date totals to 825,000 shares repurchased for $64 million. In 2025, we anticipate repurchasing at least $150 million of the $500 million share repurchase authorized.

Speaker Change: Subscription revenue on annual contracts was 78% for the second quarter.

Speaker Change: Matterport inclusion. Decreased this metric by 2 percentage points.

Speaker Change: On June 30th, our June 30th balance sheet includes 3.7 billion dollars in cash which are in net interest income of 33 million in the second quarter, a 3.5% rate of return.

We were purchased 585,000 shares in the second quarter for 45 million.

Speaker Change: Bringing our year-to-date totals to 825,000, shares. We purchased for 64 million.

Speaker Change: In 2025, we anticipate repurchasing at least 150 million of the 500 million share repurchase authorized.

Chris Lown: On May 9th, we formally agreed to purchase Domain Group for $4.43 Australian dollars per share. As mentioned last quarter, we already acquired a 16.9% ownership in Domain. We expect to pay an incremental 2.3 billion Australian dollars to acquire the remaining shares when the transaction closes. In anticipation of the deal closing, we entered into a forward swap of USD to AUD to mitigate foreign currency risk while the deal is pending. We expect the total remaining equity purchase price to be around $1.5 billion. Based on our outperformance in the second quarter, we are increasing the midpoint of our 2025 revenue guidance.

Speaker Change: On May 9th. We formally agreed to purchase domain group, for 4.43 Australian dollars per share.

Speaker Change: As mentioned last quarter, we already acquired a 16.9% ownership in domain.

Speaker Change: We expect to pay an incremental 2.3 billion Australian dollars to acquire the remaining shares when the transaction closes.

Speaker Change: In anticipation of the deal closing, we entered into a Ford swap of USD to AUD to mitigate foreign currency risk. While the deal is pending

We expect the total remaining Equity purchase price to be around, 1.5 billion dollars.

Chris Lown: We are now providing a range of $3.135 to $3.155 billion, implying an annual growth rate of 15%. Our guidance does not contemplate the expected closing of the domain group acquisition in the third quarter. The company expects third quarter revenue of $800 million to $805 million, representing 16% year-over-year growth at the midpoint of the range. We are also increasing our Just City Bida'a guidance for the year with revised guidance of $370 million to $390 million. Our revised adjusted EBITDA guidance reflects our second quarter beat versus guidance and incorporates the timing of the growth initiative spend getting pushed to the back half of the year.

Speaker Change: Based on our outperformance. In the second quarter, we are increasing the midpoint of our 2025 Revenue guidance. We are now providing a range of 3.135 to 3.155 billion dollars, implying an annual growth rate of 15%.

Speaker Change: Does not contemplate. The expected closing of the domain group acquisition in the third quarter.

Speaker Change: The company expects third quarter revenue of 800 million to 805 million representing 16% year-over-year. Growth at the midpoint of the range.

we are also in our adjust City bed, dog, guidance for the year with revised guidance of 370 million to 390 million,

Speaker Change: A revised adjusted ebit, dog guidance reflects. Our second quarter beat versus guidance and incorporates the timing of the growth initiative. Spend getting pushed to the back half of the year.

Chris Lown: For the third quarter of 2025, adjusted EBITDA is expected to be in a range of $75 million to $85 million.

Operator: And with that, I'll now turn the call back over to our call operator to open the line for questions. Certainly, and as a reminder, ladies and gentlemen, please limit yourself to one question.

Speaker Change: For the third quarter of 2025 adjusted, I was expected to be in a range of 75 million to 85 million.

Speaker Change: And with that, I'll now turn the call back over to our call, Operator to open the line for questions.

Ryan Tomasello: Our first question comes from the line. of Brian Tomasello from KBW. Your question, please. Hi everyone, thanks for taking the question. Wanted to touch on Apartments.com. Regarding the competitive dynamics in the space, can you say whether or not you've observed any signs of wallet share loss, either directly through properties being moved off the platform or indirectly, winning less share of budget growth? And given Zillow's rental package, I believe, is priced below Apartments.com, have you seen any pressure on your ability to take price in that business or drive upgrades from that customer base? Thanks.

Speaker Change: Certainly. And as a reminder, ladies and Gentlemen, please limit yourself to 1 question. Our first question comes from the line.

Of Brian. Tomasello from kvew. Your question, please.

Speaker Change: Everyone thanks for taking the question. Um,

Speaker Change: wanted to touch on apartment.com regarding the competitive Dynamics in the space.

Can you say whether or not you've observed any signs of Wallace share loss? Uh, there are directly

Speaker Change: through properties being moved off the platform or or indirectly, um, winning less share of budget growth and given

Speaker Change: Zillow's rental package I believe is priced below. Apartments.com have you seen any pressure on your ability to take price in that business or drive upgrades from that customer base? Thanks.

Andy Florence: Thank you for the question. We have not seen any loss of share or ability to really capture price value at apartments.com. I think we're conflating two different things here. Obviously, the product is extremely strong with very high NPS, renewal rates, growing bookings, robust sales bookings, growing ASP. And that's being conflated a little bit with looking at a lot of purchasing clients by our competitor paying top dollar to buy share from Redfin and from Realtor that's relatively low quality advertisers coming in the ASP on those properties is dramatically below the ASP on apartments.com so I would say we feel that we're in a very strong competitive position and nothing's changed.

Speaker Change: Uh, thank you for the question. Uh, we have not seen, uh, any loss of share or ability to really

Speaker Change: Uh, capture price value, uh, apartments.com. Um, I think we're conflating 2 different things here. Obviously, the product is extremely strong with very high, uh, NPS renewal rates, uh, growing bookings, robust sales, bookings, uh, growing, uh, ASP and, uh, that's being conflated, uh, a little bit with looking at a lot of, uh,

Speaker Change: Uh, purchasing clients by our competitor. Uh, paying top dollar to buy share from, uh Redfin. And from realtor, uh, that's relatively low quality advertisers coming in, uh, the ASP on those. Um,

Uh, properties is dramatically below the ASP on apartments.com. So I would say

Speaker Change: uh, we feel that we're in a very strong competitive position and nothing's changing.

Speaker Change: Got to add 1 other 2, other points 1. Uh the Greenfield Tam in this industry is still massive. And so this concept of wallet share taking wallet share really isn't applicable here given how large the Tamar were both competing and there's massive Tam and the second thing and I think Andy says this the best is we sell leases. We don't sell leads. And that's why we have the product we have, and the results we have. And so I just, I think you always need to keep those 2 things in mind.

Unknown Executive: Thank you.

Stephen Sheldon: And our next question comes from the line of Stephen Sheldon from William Blair. Your question, please. Hey, thanks. Just on homes.com. Great to hear about the Yes, scores. So curious. What do you think is driving that improvement? that are breadth of leads, higher lead quality, especially if I think you're starting to screen some of the inbounds, other value levers like including Matterport membership, etc. So what's driving that?

Thank you. And our next question comes from the line of Steven Shelton from William. Blair your question, please?

Steven Shelton: Hey thanks. Uh, just on homes.com great to hear about the improving NPS scores. So curious, you know,

Andy Florence: And where do you think there's still significant work to do to improve the ROI of a Homestock Sure. So I think it's important to keep all this stuff in context and in perspective. This is a brand new product. We're pretty much rounding the first year and some number of months on the product. We believe we're launching a vastly superior product offering to anything else offered in the United States, and we are inspired by some very successful and profitable business outside the United States and other countries. So, we're building up a sales force, these folks are doing a great job, they are relatively rookies, they're in their first year of sales for many of them, and you're just seeing quarter-to-quarter, month-to-month improvements in MPS and in bookings.

Steven Shelton: What do you think is driving that Improvement? You know, is it is a better breath of leads, higher lead quality especially if I think you're starting to screen some of the inbounds other value levers like including matterport membership Etc. So so what's driving that and where do you think there's still significant work to do to improve the ROI of a homes.com membership?

Steven Shelton: Sure, so, uh, I think it's important to keep all this stuff in context. And in perspective, this is a brand new product. Uh, we're pretty much, uh, rounding, uh, the first year and some number of months on the product. We are, uh, we believe we're launching a vastly superior product offering to anything else offered the United States, and we are inspired by some very successful and profitable business outside the United States and other countries.

Andy Florence: So, largely, the challenge is just sort of communicating accurately to clients the value propositions and how to utilize the product most effectively. It's a compelling offering for these folks, and it's just a learning curve. So, winning 60% plus more listings because you have a better marketing solution for homes for sale is a no-brainer, and we're seeing people begin to appreciate the value of marketing real estate on the internet. Again, real estate, there hasn't been any major player offering marketing real estate, residential real estate, on the internet as a value proposition. So, it's having, being the leader in that space, beating any competitor in providing that service, total revenue achieved is new and gaining traction.

Steven Shelton: Listings, because you have a better marketing solution, uh, for homes, for sale is a no-brainer and we're seeing people begin to appreciate the value of marketing real estate on the internet. Again, real estate, uh, has there hasn't been any major player offering marketing real estate, uh, residential real estate on the internet as a value proposition.

Andy Florence: We are seeing huge take-up of the Matterport offering, or the combined Matterport, and as we look forward, I think that that product and similar products that we develop will be differentiators in providing marketing solutions for real estate on the internet.

Andy Florence: I hope that I hope that answers the question. And I'd also say you see CoStar crossing through 70%. You see apartments in the mid low 90s. That takes years to build that MPS higher and higher and higher and get that 99% renewal rate, but we're on the track. We're focused on it and the years do go by and we will win. Thank you.

Steven Shelton: So it's uh having been the leader in that space uh beating any competitor and providing that service. Uh a total revenue achieved is a new and and gaining traction we are seeing huge take up of the matterport offering or the combined matterport and as we look forward. Uh I think that uh that product and similar products that we develop will be differentiators in uh providing Marketing Solutions for real estate on the internet.

Steven Shelton: I hope that I hope that answers the question and and I'd also say you see co-star Crossing through 70%, you see Apartments uh in the uh mid low 90s. Um that takes years to build that MPS Higher and Higher and Higher and get that 99% renewal rate. But we're on the track, we're focused on it and the years do go by and we will win

Peter Christiansen: And our next question comes from the line of Pete Christiansen from Citi. Your question, please. Thank you. Good evening. Really nice results here, guys. Thank you. I really appreciate that.

Speaker Change: Thank you. And our next question comes from the line of Pete. Christensen from City your question, please?

Unknown Executive: I was hoping you'd talk a little bit about pricing. I mean, you mentioned multifamily ASPs, I guess, are positive there. And obviously, the the AOM based pricing and route net is starting to really hit its stride. But I'm just curious about maybe other parts of the business suite. And then the new homes model, just if you can elaborate on that. Thank you.

Thank you. Good evening. Uh really nice results here guys. Thank you. We really appreciate that.

Pete Christensen: You talk a little bit about pricing. I mean, you you mentioned multi family.

Andy Florence: Sure. So I'll defer on CoStar to Chris if he's got any information. I have no information that ASP on CoStar is changing in one way or another. I believe we're in the same place. I would actually say that our lender ASP would be dramatically higher than our standard broker owner ASP. But on the home side, we continue to optimize to the member's portfolio. And we are seeing pricing coming in for a very small player at a couple hundred dollars a month. We're also seeing for larger players, deals come in at $7,500 a month or $8,000 a month.

A positive there and obviously the the aom based pricing and Lieutenant is starting to to really hit its stride but I'm just curious about maybe other parts of the business Suite. Um, and then, uh, the new homes model just to be, can elaborate on that. Thank you.

Andy Florence: We're very comfortable at this low penetration rate, playing a little bit more to penetration than to maximizing ASP. So if you're introducing a new product, you want to play the penetration game initially, you have the rest of eternity to play the ASP game. So we're comfortable with where it's going, and we're thinking we're getting good results.

Speaker Change: Sure. So uh I'll defer on co-star to Chris if he's got any information, I have no information. That ASP on co-star is changing in 1 way or another. I believe we're in the same place. I would actually say that our lender ASP would be dramatically higher, uh, than uh, than our standard broker, uh, on our ASP. Um, but on the home side, uh, we continue to optimize to uh, the members portfolio and we are uh uh we are seeing pricing coming in at, you know, for a very small player and a couple hundred dollars a month. And we're also seeing for larger players deals come in at 7,500 dollars a month or 8 thousand dollars a month.

We're very comfortable at this low penetration rate, playing a little bit more to penetration than to maximizing ASP. So, if you're introducing a new product, you want to play the penetration game initially, you have the rest of Eternity to play the ASP game.

Um, so we're comfortable where, where it's going and uh we're thinking we're getting good result there.

Unknown Executive: Thank you.

Curtis Nagel: And our next question comes from the line of Curtis Nagel from B of A. Your question, please. Great, thanks very much for taking the question. Maybe just wanted to contextualize the new member growth, it goes up 61% for Homes.com, 6300. What do they compare to 1Q? And then, you know, in terms of what's factoring in the guidance for the rest of the year? You know, what are you factoring for that new member growth within that guidance?

Speaker Change: Thank you. And our next question comes from the line of Curtis Nagel from

Speaker Change: BFA your question, please.

Unknown Executive: Yeah, we haven't provided that detail from a member perspective, that level of detail other than the guidance we provided in my earnings comments.

Speaker Change: Have a great. Thanks very much for taking the question. Um maybe just wanted to contextualize the new member growth. Uh he goes up 61% for homes.com cc300. Um let me compare it to 1 q and then you know in terms of what factors in the guidance for the rest of the year. Uh, you know, what are you factoring for uh that new net net new member of growth uh within that guidance.

Yeah, we have them provided that uh detail from a I'm a member of perspective on that level of detail other than the guidance we provided in in my earnings comments.

Unknown Executive: Okay, can I take a shot another question? Definitely do. Okay. All right.

Chris Lown: Well, we'll do a moment. Yeah, Chris, maybe just in terms of the even a guide for the third quarter, right? I think there's a bit of time and shifts, but anything else kind of going on there in terms of rate going down just a little bit versus last year? Is it just timing? Yeah, because if you actually look at the second quarter beat in the third quarter, and you take sort of take the those two together, you'll see the beat the organic actual beat in there. But you also see the timing shift that kind of amounts for the Delta, if you look at consensus, third quarter versus the second quarter beat.

Okay, can I take a shot of another question then definitely if you do freebie? Okay. All right. Well, we'll do them all good. Um, yeah. Uh, Chris maybe just in terms of, uh, the even a guide for the third quarter, right? I think there's a bit of time in shift, but anything else kind of going on there in terms of, um, you know, rate going down, just a little bit versus uh, versus last year? Is it just timing? Yeah, because if you actually look at the second quarter beat and the third,

Chris Lown: So it really is primarily timing. And the beats the benefit on the upside, but then the majority of it is timing.

Speaker Change: Quarter and you tell you sort of take the those 2 together, you'll see the be the organic actual bead in there. But you'll see the timing shift that kind of amounts for the Delta if you look at consensus uh third quarter versus the second quarter beat. So it really is primarily timing and the beats the benefit on the upside but then the majority of it is timing.

Unknown Executive: Thank you.

Alexei Gogolev: And our next question comes from the line of Alexei Gogolev from J.P. Morgan. Your question, please.

Speaker Change: Question comes from the line of Alexey gov from JP Morgan your question, please.

Andy Florence: Hello, everyone, and congrats with great results. Congrats again, I wanted to double check. Is there any seasonality in the commercial booking, excluding apartments.com? Just wondering if it's normal for that portion of the bookings to be broadly unchanged quarter on quarter.

Hello everyone and uh, congrats with great results. Uh, and the

Uh, um, is there any seasonality in the commercial booking? Excluding apartments.com just wondering if it's normal for that. Portion of the bookings to be broadly and changed quarter on quarter.

Chris Lown: The answer is no. Obviously, in the broader commercial margin that we provide, apartments usually has a very strong second quarter. CoStar historically has a stronger fourth quarter. You know, it sort of all moves out. I think there is a margin improvement, but there's rounding. It gives you that 43% number.

The answer is no. I obviously in the in the broader commercial margin that we we provide Apartments usually has a very strong second quarter co-star. Historically has a stronger fourth quarter. You know, it's sort of all moves out. I think there's there is a margin Improvement but there's rounding it gives you the 43% number.

Chris Lown: Chris, I was talking more about bookings. Oh, I'm sorry. I apologize. So bookings- Bookings and CoStar is pretty stable through the year. Sometimes you get a little bit of a lift in the fourth quarter. Yeah, and apartments always has a strong second quarter, which we've talked about historically. And I think through time, homes will probably have a strong second quarter too. Yeah, and LoopNet is clearly on a path to see organic growth, which would have a lack of seasonality given the change in business model. LoopNet used to have a strong negative seasonality in the fourth quarter, which we've now eliminated.

Correct. I was I was talking more about bookings. Oh, I'm sorry, I I apologize.

Speaker Change: So bookings bookings and co-stars is pretty stable through the year. Sometimes you get a little bit of a lift in the fourth quarter. Yeah. And apartments always has a strong second quarter, uh, which we've talked about on uh historically and I Think Through Time homes will probably have a strong second quarter too. Yeah. And loopnet is clearly on a path to the organic growth.

Speaker Change: Which would be have, have a lack of seasonality. Given the change in business model, uh, L used to have a strong negative seasonality in the fourth quarter, which we've now eliminated,

Unknown Executive: Thank you.

George Tong: And our next question comes from the line of George Tong from Goldman Sachs. Your question, please. Hi, thanks. Good afternoon. Andy, in homes.com, you mentioned playing more to penetration than maximizing price. Can you remind us how the average price for new memberships changed during the quarter? And how you're thinking about the broader pricing strategy going forward?

Speaker Change: Thank you. And our next question comes from the line of George Tom from Goldman Sachs your question, please.

Andy Florence: Is there a strategy to price based on tiers or just pricing based on agent performance, listing volumes, etc.? So we're very mindful that every single subscription sold has a very high gross margin. We're looking at our direct costs, our Matterport costs, all that, and we want to have a very high direct margin. We want to drive participation and referrals. So as NPSs go up, we want to sell profitable business that drives margin. Again, we're at a very low penetration point with a new product area. The pricing is based on, we've done some shifting, like we used to charge agents based on some of their buyer agency work.

George Tom: Hi, thanks. Good afternoon. Andy in homes.com you mentioned playing more to penetration than maximizing price. Can you remind us how the average price for a new membership's change during the quarter and how you're thinking about the broader pricing strategy going forward? Um, is your strategy to price based on peers or adjust pricing. Based on agent performance listing volumes Etc.

So we're very mindful that every single subscription sold has a very high gross margin. Uh we're looking at um our direct costs, our matterport costs all that and we want to have a very high direct margin. We want to drive participation and referrals. So as NPS is go up, um we want to sell profitable business that drives margin. Again, we're at a very low penetration point with a new product area

Andy Florence: We've shifted that away, and we more focus on the pricing model being on the listing side of the business and the value of the assets, the volume of the assets, the size of the team. And then we've begun to put a bit of a factor in there for their rental portfolios, because with the homes.com rental listing syndicating over to apartments.com, that creates a lot of value for them on the rental listing side. So it's a constantly changing mix, and I anticipate best practice will keep shifting it and playing with it every quarter. But thematically, we want to have profitable penetration growth on a unit basis.

Um, the pricing is based on, uh, we've done. Some shifting like we used to charge agents, uh, um, based on some of their buyer agency work. We've shifted that away and we more focus on the pricing model being on the listing side of the business, and the value of the assets, the volume of the assets, the size of the team, and then we

Andy Florence: And again, if you look at like a loop net where you might be in the 60-some percent penetration or at the institutional end of apartments, you might be at that 60 percent penetration. We're down in the low, low, low penetration cycle for homes.com. So we don't want to we want to focus on growing share profitably on a unit basis, knowing that you have a lot of time to capture more value. And, and also remember that folks who are successful in the model we're adopting, or the one we're selling in the United States was around marketing the real estate.

George Tom: We've begun to put a bit of a factor in their for their rental portfolios because uh with the homes.com rental listing syndicating over to apartments.com, that creates a lot of value for them on the rental listing side. So it's a, it's a constantly changing mix and I anticipate best practice will keep shifting and playing with it every quarter. Uh, but, you know, uh, with a thematically, uh, we want to have profitable penetration growth, you know, on a on a unit basis. And again, uh, you know, if you look at like a loop net, where you might be in the 60s, some percent penetration, or at the institutional end of apartment? You might be at that 60%, penetration, we're down the low, low low low, uh, penetration cycle for homes.com so we don't want to

We want to focus on growing share profitably uh on a on a unit basis uh knowing that you have a lot of time to capture more value.

George Tom: And, and also remember that.

Andy Florence: Again, we're the only platform that's really in the United States that's really focused on marketing real estate. The folks that do this kind of platform and what we do currently at apartments.com in the United States and LoopNet in the United States, you begin by selling a product which is around participation. So it's the you sell first the entry level listing just a silver ad like a baseline promotion ad. Through time, you can do something called depth advertising or signature advertising, but it's something that evolves through time.

Folks who are successful in the model were adopting or the 1 we're selling in the United States, which is around marketing, the real estate again. We're the only platform that's really in the United States. It's really focused on marketing. Real estate, the folks that do this kind of platform. And and what we do currently at apartments.com in the United States and Loop in the United States.

You Begin by selling a product, which is around participation. So it's the you sell. First the entry-level listing, just a silver. Add like a baseline, uh, uh, promotion. Add

Andy Florence: And if I look at like, you know, an REA group in Australia, I would imagine that 80% of their revenue comes from depth advertising, but that's a lever you pull in intermediate out years.

Through time, you can do something called depth advertising or signature advertising, but something that evolves through time. And if I look at like, you know, an Rea group in Australia, I would imagine that 80% of their revenue comes from depth advertising but that's a lever you pull uh in intermediate out years.

Jeff Mueller: Thank you. And our next question comes from the line of Jeff Mueller from Baird. Your question, please. Yeah, thank you. The 750 homes.com headcount figure I can hear it. Is that a change? I thought you were talking 500 to 600.

George Tom: It's on the line of Jeff, Mueller, from beard your question, please.

Andy Florence: And how are you thinking about I guess the serviceable addressable market in terms of agent headcount that you're you're going after at this point? Thank you. Sure. Yes, I am reining in Andy Stearns, who has built quite an effective machine down there in Richmond, Virginia. So it has been inching up, we're going to hold it there at that number, we may take some of those resources and use them for selling Matterport. Again, there's Matterport has had a relatively small sales force.

Thank you. The 750 homes.com headcount figure in the year. Is that a change? I thought you were talking 500 to

600 and how are you thinking about? I guess the serviceable addressable market in terms of agent headcount that you're you're going after at this point. Thank you.

George Tom: Sure. Um,

Speaker Change: Yes, I am. Uh, uh reigning in Andy Stearns who has built quite an effective machine down there in Richmond, Virginia. Um, so it has been inching up, we're going to hold it there at that. Number we may take some of those resources and use them for selling matterport. Again, there's a matterport has had a uh,

Andy Florence: And the second part of the question was So, I'm sorry, the addressable market there. So, the addressable market is just massive, right? So, you have 1.5 million agents there that you can sell to. In reality, you probably have 500 to 750,000 who are really viable candidates. And you have, you need to look at these folks, these 700,000 some prospects, not as a one-time sale. You're not just selling them something on day one and then never talking to them again. You want to sell them something and develop a relationship with them. You want to communicate with them about the value they are receiving from their membership, continue to educate them on the value they're receiving, keeping in mind that in models around the world and in commercial estate in the United States, these client relationships grow and you are able to sell them more and more products and services.

George Tom: Relatively small sales force.

Um,

George Tom: and the second part of the question was

George Tom: Uh, so the, I'm sorry, the addressable Market there, so the, um, the address of a market is just massive, right? So you have, uh, 1.5 million agents there that you can sell to, in reality. Uh, you probably have 500 to 750,000 who are really viable candidates and you have, uh, you, you need to look at these folks, these, um, 700,000, some prospects, uh, not as a 1-time sale, you're not just selling them something on day, 1, and then never talking to them again, you want to sell them something, and

George Tom: Develop a relationship with them. You want to communicate, uh, with them about the value. They are receiving from their membership, uh, continue to educate them on the value of the receiving.

Andy Florence: So, if you get to 750 salespeople, you're talking about roughly 1,000 clients or prospects per salesperson, which is a pretty aggressive load. I mean, it's one of the beauties of this space is that it is a huge market opportunity. One of the beauties of our business model is that unlike our competitors that can only really sell to 5% of the market, our business model can sell to 60, 70, 80% of the market, which is why we love it and why investors should too.

George Tom: Keeping in mind that, uh, in models around the world and in commercial state in the United States, uh, these client relationships grow and you are able to sell them more and more products and services. So, uh, if you get to, 750 salespeople, you're talking about uh, roughly uh, 1,000 clients or prospects for salesperson, which is a pretty aggressive load. I mean, it's 1 of the beauties of this space is that it is a huge Market opportunity. 1 of the beauties of our business model is that unlike our competitors that can only really sell to 5% of the market. Our business model can sell to 60 70 80% of the market, which is why we love it and why investors should too

Unknown Executive: Thank you.

Andy Florence: This does conclude the question and answer session of today's program. I'd like to hand the program back to Andy Florence for any further remarks.

Speaker Change: thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Andy Florance for any further remarks.

Andy Florence: Thank you everyone for joining us for the second quarter earnings call. Sorry if I'm a little too enthusiastic, but for good reason. And we look forward to updating you on the progress in the business in the next earnings call.

Operator: Thank you very much for joining us. Thank you ladies and gentlemen for your participation in today's conference.

Andy Florance: Thank you everyone for joining us for the second quarter earnings call. Uh sorry if I'm a little too enthusiastic. Uh but uh uh for good reason um and we look forward to updating you on the progress in the business in the next uh earnings call. Uh thank you very much for joining us.

Operator: This does conclude the program. You may now disconnect. Good day.

Speaker Change: Thank you, ladies and gentlemen for your participation. In today's conference, this does conclude the program. You may now disconnect good day.