CoStar Group, the commercial real estate heavyweight that is making waves in residential spaces, announced in an earnings call July 23 that revenue for the quarter ended June 30, 2024 was $678 million, up 12% over revenue of $606 million for the quarter ended June 30, 2023. Net income was $19 million in the second quarter of 2024, down from $101 million in Q2 2023.
While the company boasts more than a dozen businesses and brands under its umbrella, the focus continues to be its residential portal, Homes.com, as CoStar pushes forward with a massive marketing campaign and internal push for dominance in the so-called “portal wars”—an effort that appears to be paying off.
“Homes.com net new bookings (new member contracts) through June reached over $55 million, a significant milestone as it took Apartments.com two years to achieve those results,” said Andy Florance, CoStar founder and CEO, in a statement. “Our Homes.com Network had 148 million monthly average unique visitors in the second quarter, according to Google Analytics, maintaining our position as one of the top two most heavily trafficked residential property marketplaces in the U.S. Our unaided brand awareness continues to climb, and reached 27% in June 2024 as a result of our aggressive brand marketing campaign.
“Winning new listings is a primary objective for real estate agents,” he continued. “We believe the evidence is overwhelming that our product is enabling agents to achieve that core goal. We believe that the potential (return on investment) for member agents is phenomenal.”
Other company segments also fared well.
“Our $2 billion run rate businesses continue to deliver double-digit revenue growth, with Apartments.com growing at 18% and CoStar at 10% over the second quarter of last year. Our commercial information and marketplace businesses continue to perform, and delivered 41% profit margins in the second quarter of 2024,” Florance said.
Amidst the fierce competition, both legal and business-wise, it didn’t take long for Florance to stress why the numbers for Homes.com are superior in every way to those of Realtor.com, while also sending a shot across the bow of residential real estate portal leader Zillow.
“According to Google Analytics, the 148 million average monthly unique visitors for the second quarter was an increase of 73% over the same quarter last year,” he said. “Our Homes.com site alone delivered 99 million average monthly unique visitors for the quarter, an increase of 197%.
“We believe that a complete site-centric census-style tool like Google Analytics is more accurate than user-centric panel estimate counts generated by firms such as Comscore or Semrush. I believe tools like Google Analytics are like an election result, whereas a tool like Semrush or Comscore is more like an election poll.
“Our traffic is fast approaching Zillow’s first quarter report traffic, and the Homes Network now has solidly led Realtor.com’s reported first quarter 72 million average monthly unique visitors and Redfin’s reported first quarter 49 million monthly unique visitors.”
“This quarter’s results demonstrate the strength of our core commercial business and the continued progress of our Homes.com strategy,” added Chris Lown, CFO of CoStar. The company now expects revenue in the range of $2.735 billion to $2.745 billion for the full year of 2024, representing revenue growth of approximately 12% year-over-year at the midpoint of the range. The company expects revenue for the third quarter of 2024 in the range of $692 million to $697 million, representing revenue growth of approximately 11% year-over-year at the midpoint of the range.”
Finally, Florance shared some more qualitative background on his residential portal business—how he has traveled to different areas to meet with agents and the general public to gauge their thoughts on the Homes.com website.
“Over the past month or so, I attended focus groups with agents and consumers in Atlanta, Chicago, Irvine and Nashville,” he said. “Our growth and unaided awareness was clear. Agents reiterated that they prefer our business model of ‘your listing, your lead.’ The moderator asked them to spend a few minutes using the Homes.com site, and the response was fantastic.
“The overwhelming majority of participants said that Homes.com is the better home-search site than competing sites. Common themes were that the site is clean, it’s beautiful and has more information than other sites, and participants like that. The listing agent is clearly visible, is not obscured, and a listing agent who knows the most about the property can be readily reached to ask quick and simple questions.”
