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What changed in CoStar Group's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CoStar Group's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+283 added−274 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-22)

Top changes in CoStar Group's 2023 10-K

283 paragraphs added · 274 removed · 205 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

46 edited+5 added−7 removed114 unchanged
Biggest changeOur core services are delivered from multiple data centers and cloud-based computing platforms to support uninterrupted service for our customers and are continually monitored to ensure fast and reliable customer access, to protect against unauthorized intrusions and to detect vulnerabilities. 16 Our comprehensive data protection policy provides for use of secure networks, strong passwords and dual factor authentication systems, encrypted data fields, end-to-end encryption, endpoint detection and response systems and services, security information and event management systems, off-site storage, cloud services, end user and developer security training, multilayered anti-phishing malware and spam protections and other protective measures in an effort to ensure the availability and security of all core systems.
Biggest changeOur comprehensive data protection policy provides for use of secure networks, strong passwords and dual factor authentication systems, encrypted data fields, end-to-end encryption, endpoint detection and response systems and services, security information and event management systems, off-site storage, cloud services, end user and developer security training, multilayered anti-phishing malware and spam protections and other protective measures in an effort to ensure the availability and security of all core systems. 16 Competition The market for information, analytics and online marketplaces generally is competitive and extremely dynamic.
Our principal information, analytics and online marketplace services are described in the following paragraphs: CoStar CoStar is our subscription-based integrated platform for commercial real estate intelligence, which includes information about office, industrial, retail, multifamily, hospitality and student housing properties, properties for sale, comparable sales, 10 tenants, space available for lease, industry professionals and their business relationships, industry news and market status and provides lease analysis, risk management, and hospitality benchmarking capabilities.
Our principal information, analytics and online marketplace services are described in the following paragraphs: 10 CoStar CoStar is our subscription-based integrated platform for commercial real estate intelligence, which includes information about office, industrial, retail, multifamily, hospitality and student housing properties, properties for sale, comparable sales, tenants, space available for lease, industry professionals and their business relationships, industry news and market status and provides lease analysis, risk management, and hospitality benchmarking capabilities.
We compete directly and indirectly for customers with the following categories of companies: • Online marketing services, internet listing services, mobile software applications or data exchanges targeted to commercial real estate brokers, buyers and sellers of commercial real estate properties, insurance companies, mortgage brokers and lenders, such as Reed Business Information Limited and its Estates Gazette and Radius Data Exchange products, SquareFoot, officespace.com, Brevitas, Catylist & Commercial Exchange (part of Moody's), Altus Group & Commercial Property Search (part of Reonomy), Digsy, Quantum Listing, RealNex MarketPlace, Rofo, CIMLS, CompStak, Rightmove, Yardi (CommercialEdge), CREXi, TotalCommercial.com, DebtX, Real Capital Markets, VTS, TenantBase and Spacelist; • Publishers and distributors of information, analytics and marketing services, including regional providers and national print publications, such as CBRE Economic Advisors, Marshall & Swift, REIS Network (part of Moody's), Real Capital Analytics, Real Capital Markets, Reonomy, Yardi Matrix, RealPage and its Axiometrics business, Altus Insight and Altus RealNet (Canada); • Search engines, internet listing services and mobile software applications featuring apartments for rent, such as Google, Bing, Facebook Marketplace, ApartmentGuide.com, Rent.com, Rentals.com, Zillow Rentals, Trulia Rentals, StreetEasy, HotPads.com, MyNewPlace.com, Zumper, Craigslist, ApartmentList.com, Move.com, Realtor.com, RentCafe.com, RentHop, RentBerry, ApartmentRatings, Nooklyn, Home Finder and Rentable; • Search engines, internet listing services and mobile software applications featuring homes for sale, such as Google, Bing, Facebook Marketplace, Zillow, Trulia, Redfin, Realtor.com, Move.com, Craigslist, RealtyTrac, MLS.com, Home Finder, For Sale by Owner and Auction.com, as well as agent marketing platforms and workflow providers; • Hospitality benchmarking and analytics services, such as Lodging Econometrics, Kalibri Labs, Amadeus, HotStats, Shiji Group (SnapShot) and Benchmarking Alliance, Lodging Analytics Research & Consulting (LARC); • Online and mobile software application providers in the residential real estate industry, including Zillow, Redfin, Realtor.com and Rocket Mortgage, as well as agent marketing platforms and workflow providers; 17 • In the commercial real estate market, locally controlled real estate boards, exchanges or associations sponsoring commercial property listing services and the companies with whom they partner, such as Catylist, the National Association of Realtors, CCIM Institute, Society of Industrial and Office Realtors, the Commercial Association of Realtors Data Services and AIR CRE; • Real estate portfolio management software solutions, such as Cougar Software, MRI Software, Altus, RealPage, AppFolio and SiteCompli; • Real estate lease management and administration software solutions, such as Accruent, Tririga, Manhattan Software, Tango Analytics, Lease Accelerator, Visual Lease, Sequnetra, Lease Harbor and AMT Direct; • Commercial real estate auction platforms such as CREXi, Marketplace, by RealINSIGHT and RCM Lightbox; • In-house research departments operated by commercial real estate brokers; and • Public record providers.
We compete directly and indirectly for customers with the following categories of companies: • Online marketing services, internet listing services, mobile software applications or data exchanges targeted to commercial real estate brokers, buyers and sellers of commercial real estate properties, insurance companies, mortgage brokers and lenders, such as Reed Business Information Limited and its Estates Gazette and Radius Data Exchange products, SquareFoot, officespace.com, Brevitas, Catylist & Commercial Exchange (part of Moody's), Altus Group & Commercial Property Search (part of Reonomy), Digsy, Quantum Listing, RealNex MarketPlace, Rofo, CIMLS, CompStak, Rightmove, Yardi (CommercialEdge), CREXi, TotalCommercial.com, DebtX, Real Capital Markets, VTS, TenantBase and Spacelist; • Publishers and distributors of information, analytics and marketing services, including regional providers and national print publications, such as CBRE Economic Advisors, Marshall & Swift, REIS Network (part of Moody's), Real Capital Analytics, Real Capital Markets, Reonomy, Yardi Matrix, RealPage and its Axiometrics business, Altus Insight and Altus RealNet (Canada); • Search engines, internet listing services and mobile software applications featuring apartments for rent, such as Google, Bing, Facebook Marketplace, ApartmentGuide.com, Rent.com, Rentals.com, Zillow Rentals, Trulia Rentals, StreetEasy, HotPads.com, MyNewPlace.com, Zumper, Craigslist, ApartmentList.com, Move.com, Realtor.com, RentCafe.com, RentHop, RentBerry, ApartmentRatings, Nooklyn, Home Finder and Rentable; • Search engines, internet listing services and mobile software applications featuring homes for sale, such as Google, Bing, Facebook Marketplace, Zillow, Trulia, Redfin, Realtor.com, Move.com, Craigslist, RealtyTrac, MLS.com, Home Finder, For Sale by Owner, Auction.com, Rightmove and Zoopla, as well as agent marketing platforms and workflow providers; • Hospitality benchmarking and analytics services, such as Lodging Econometrics, Kalibri Labs, Amadeus, HotStats, Shiji Group (SnapShot), Benchmarking Alliance and Lodging Analytics Research & Consulting (LARC); • Online and mobile software application providers in the residential real estate industry, including Zillow, Redfin, Realtor.com and Rocket Mortgage, as well as agent marketing platforms and workflow providers; • In the commercial real estate market, locally controlled real estate boards, exchanges or associations sponsoring commercial property listing services and the companies with whom they partner, such as Catylist, the National Association of Realtors, CCIM Institute, Society of Industrial and Office Realtors, the Commercial Association of Realtors Data Services and AIR CRE; • Real estate portfolio management software solutions, such as Cougar Software, MRI Software, Altus, RealPage, AppFolio and SiteCompli; 17 • Real estate lease management and administration software solutions, such as Accruent, Tririga, Manhattan Software, Tango Analytics, Lease Accelerator, Visual Lease, Sequnetra, Lease Harbor and AMT Direct; • Commercial real estate auction platforms such as CREXi, Marketplace, by RealINSIGHT and RCM Lightbox; • In-house research departments operated by commercial real estate brokers; and • Public record providers.
The Apartments.com network consists of numerous other apartment marketing sites, including: • ApartmentFinder TM provides lead generation, advertising and internet marketing solutions to property managers and owners through its main site, ApartmentFinder.com. • ForRent.com ® provides digital advertising through a network of four multifamily websites, which includes ForRent.com, AFTER55.com ® , CorporateHousing.com TM and ForRentUniversity.com ® . • ApartmentHomeLiving.com TM provides renters with another national online apartment rental resource that showcases apartments for rent with official prices, pictures, floor plans and detailed information on each apartment. • Apartamentos.com TM provides Spanish speaking renters with an online apartment rentals resource offered exclusively in Spanish, with the same primary features found on Apartments.com. • WestsideRentals.com ® specializes in Southern California real estate rentals. 12 • Off Campus Partners provides student housing marketplace content and technology to U.S. universities, simplifying the off-campus housing search process for universities, property managers and students.
The Apartments.com Network consists of numerous other apartment marketing sites, including: • ApartmentFinder provides lead generation, advertising and internet marketing solutions to property managers and owners through its main site, ApartmentFinder.com. • ForRent.com provides digital advertising through a network of four multifamily websites, which includes ForRent.com, AFTER55.com, CorporateHousing.com and ForRentUniversity.com. • ApartmentHomeLiving.com provides renters with another national online apartment rental resource that showcases apartments for rent with official prices, pictures, floor plans and detailed information on each apartment. • Apartamentos.com TM provides Spanish speaking renters with an online apartment rentals resource offered exclusively in Spanish, with the same primary features found on Apartments.com. • WestsideRentals.com specializes in Southern California real estate rentals. • Off Campus Partners provides student housing marketplace content and technology to U.S. universities, simplifying the off-campus housing search process for universities, property managers and students.
To help renters find the information that meets their needs, our sites also offer innovative search tools such as the Polygon TM Search tool, which allow renters to specifically define the area in which they want to find an apartment and Plan Commute tools, which allow renters to search property listings that meet their transportation needs.
To help renters find the information that meets their needs, our sites also offer innovative search tools such as the Polygon Search tool, which allow renters to specifically define the area in which they want to find an apartment and Plan Commute tools, which allow renters to search property listings that meet their transportation needs.
We expect to continue our software development efforts to improve existing services, introduce new services, integrate and cross-sell services and expand and develop supporting technologies for our research, sales and marketing organizations. We reevaluate our priorities on a regular basis and may reevaluate our priorities as economic conditions continue to evolve.
We expect to continue our software development efforts to improve existing services, introduce new services, integrate and cross-sell services and expand and develop supporting technologies for 15 our research, sales and marketing organizations. We reevaluate our priorities on a regular basis and may reevaluate our priorities as economic conditions continue to evolve.
Our comprehensive set of health and wellness benefits are affordable, high quality and valuable to employees and their families. Employees have multiple choices for health plans, access to vision and 19 dental benefits and may participate in our employee wellness program as well as our employee assistance program.
Our comprehensive set of health and wellness benefits are affordable, high quality and valuable to employees and their families. Employees have multiple choices for health plans, access to vision and dental benefits and may participate in our employee wellness program as well as our employee assistance program.
Our network of apartment marketing sites provides a comprehensive selection of rentals, information on actual availabilities and rents and in-depth data on neighborhoods, including restaurants, nightlife, history, schools and other facts important to renters.
Our network of apartment marketing sites provides a comprehensive selection of rentals, information on actual availabilities and rents and in-depth data on neighborhoods, including restaurants, nightlife, history, schools and other 12 facts important to renters.
We own U.S. federally registered trademarks for our brands and services including CoStar ® , CoStar Property ® , CoStar COMPS ® , CoStar Lease Analysis ® , LoopNet ® , Showcase.com ® , CityFeet.com ® , Apartments.com ® , Land.com ® , Ten-X ® , Homesnap ® and Homes.com ® , among many others.
We own U.S. federally registered trademarks for our brands and services including CoStar ® , CoStar Property ® , CoStar COMPS ® , CoStar Lease Analysis ® , LoopNet ® , Showcase.com ® , CityFeet.com ® , Apartments.com ® , Homes.com ®, Land.com ® , and Ten-X ® , among many others.
Our drone operators in the U.K. and Canada are certified and trained to Civil Aviation Authority and Transport Canada, with a permission for commercial operations pending, respectively.
Our drone operators in the U.K. and Canada are certified and trained to Civil Aviation Authority and Transport Canada standards, respectively, with a permission for commercial operations pending.
We also offer complementary services to the rental industry, including the ability for renters to apply for rentals online and for landlords to receive applications, screen tenants and process rental payments and lease renewals. LoopNet LoopNet is the flagship brand in our network of commercial real estate marketing sites, which also includes CityFeet.com ® and Showcase.com ® .
We also offer complementary services to the rental industry, including the ability for renters to apply for rentals online and for landlords to receive applications, screen tenants and process rental payments and lease renewals. LoopNet LoopNet is the flagship brand in our network of commercial real estate marketing sites, which also includes LoopNet.co.uk, CityFeet.com and Showcase.com.
LoopNet offers unique, subscription-based advertising solutions for different segments within the industry and delivers value across its constituent networks. The LoopNet network leverages CoStar Group’s commercial real estate database to provide in-depth and accurate information across all commercial property types, including office, industrial, retail, multifamily, specialty, health-care, hospitality, sports and entertainment, land and residential.
LoopNet offers unique, subscription-based advertising solutions for different segments within the industry and delivers value across its constituent networks. The LoopNet network leverages CoStar Group’s commercial real estate database to provide in-depth and accurate information across all commercial property types, including office, industrial, retail, multifamily, specialty, healthcare, hospitality, sports and entertainment, land and residential.
Information about our revenues, long-lived assets and total assets derived from and located in foreign countries is included in Notes 2, 3 and 14 of the Notes to the Consolidated Financial Statements included in this Report.
Information about our revenues, long-lived assets and total assets derived from and located in foreign countries is included in Notes 2, 3 and 14 of the Notes to the Consolidated Financial Statements included in Part IV of this Report.
In 2022, we successfully implemented a number of important sales initiatives focused on selling our products to brokers, property owners and lenders in the U.S. This focus will continue in 2023.
In 2023, we successfully implemented a number of important sales initiatives focused on selling our products to brokers, property owners and lenders in the U.S. This focus will continue in 2024.
We are leveraging our capabilities developed from our extensive commercial real estate research efforts to produce original, media rich content of neighborhoods, schools, parks and condominium buildings' amenities and common areas for our residential products using professional photographers and fleets of drones to conduct aerial research of residential real estate. Data and Image Providers.
We are leveraging our capabilities developed from our extensive commercial real estate research efforts to produce original, media rich content of neighborhoods, schools, parks and condominium buildings' amenities and common areas for our residential products using professional photographers and a fleet of drones to conduct aerial research of residential real estate. Data and Image Providers.
Clients We draw clients from across the real estate and related business community, including real estate brokers, agents, owners, developers, landlords, property managers, financial institutions, retailers, vendors, appraisers, investment banks, government agencies and other parties involved in real estate. For the years ended December 31, 2022, 2021 and 2020, no single client accounted for more than 5% of our revenues.
Clients We draw clients from across the real estate and related business community, including real estate brokers, agents, owners, developers, landlords, property managers, financial institutions, retailers, vendors, appraisers, investment banks, government agencies and other parties involved in real estate. For both the years ended December 31, 2023 and 2022, no single client accounted for more than 5% of our revenues.
Our human resources and recruiting team works in partnership with business leaders, using a robust process to attract a diverse slate of candidates to fill vacancies and contribute to our growth, including our Careers page on our corporate website, employee referral program, social media and digital platforms, direct outreach, partnerships with commercial real estate industry groups and universities and specific partnerships and programs.
Our human resources and recruiting teams work in partnership with business leaders, using a robust process to attract a diverse slate of candidates to fill vacancies and contribute to our growth, including our Careers page on our corporate website, employee referral program, social media and digital platforms, direct outreach, partnerships with commercial real estate industry groups and universities and specific partnerships and programs.
BizBuySell is the flagship brand in our network of marketplaces for operating businesses and franchises for-sale, which also includes BizQuest and FindaFranchise . Business sellers pay a fee to list their operating businesses for-sale, and interested buyers can search the respective sites' listings for free.
Sellers pay a fee to list their land for-sale, and interested buyers can search the respective sites' listings. BizBuySell is the flagship brand in our network of marketplaces for operating businesses and franchises for-sale, which also includes BizQuest and FindaFranchise .
The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. 20
The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. 19
We acquired Homes.com, BureauxLocaux and Business Immo in May 2021, October 2021 and April 2022, respectively. We continue to integrate our recent acquisitions and the services they offer into our CoStar network.
We acquired Homes.com, BureauxLocaux, Business Immo and OnTheMarket in May 2021, October 2021, April 2022 and December 2023, respectively. We continue to integrate our recent acquisitions and the services they offer into our CoStar network.
U.S.-based employees represent approximately 89% of the overall employee population, followed by 9% in European, Asia-Pacific and Latin American countries and 2% in Canadian provinces. None of our employees are represented by a labor union. We have experienced no work stoppages.
U.S.-based employees represent approximately 86% of the overall employee population, followed by 12% in European, Asia-Pacific and Latin American countries and 2% in Canadian provinces. None of our employees are represented by a labor union. We have experienced no work stoppages.
See Notes 5 and 9 of the Notes to the Consolidated Financial Statements for further discussion of these acquisitions. 15 Development, Investments and Expansion We plan to continue to invest in our business and our services, evaluate strategic growth opportunities and pursue our key priorities as described below in Item 7.
See Notes 5 and 9 of the Notes to the Consolidated Financial Statements, included in Part IV of this Report, for further discussion of these acquisitions. Development, Investments and Expansion We plan to continue to invest in our business and our services, evaluate strategic growth opportunities and pursue our key priorities as described below in Item 7.
Revenues, EBITDA and total assets and liabilities for each of our segments are set forth in Notes 3 and 14 of the Notes to the Consolidated Financial Statements. Information about risks associated with our foreign operations is included in “Item 1A. Risk Factors” and “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in this Report.
Revenues, EBITDA and total assets and liabilities for each of our segments are set forth in Notes 3 and 14 of the Notes to the Consolidated Financial Statements, included in Part IV of this Report. Information about risks associated with our foreign operations is included in “Item 1A. Risk Factors” and “Item 7A.
We regard the rights protected by our patents as valuable to our business, but do not believe that our business is materially dependent on any single patent or portfolio of patents as a whole. Human Capital Resources As of January 31, 2023, we employed 5,653 employees.
We regard the rights protected by our patents as valuable to our business, but do not believe that our business is materially dependent on any single patent or portfolio of patents as a whole. 18 Human Capital Resources As of January 31, 2024, we employed 6,152 employees.
Proprietary Rights To protect our proprietary rights in our methodologies, database, software, trademarks and other intellectual property, we depend upon a combination of: • Trade secret, misappropriation, unfair competition, copyright, trademark, computer fraud, database protection and other laws; • Registration of copyrights and trademarks; • Nondisclosure, and other contractual provisions with employees and consultants; • License agreements with customers; • Patent protection; and • Technical measures. 18 We seek to protect our software’s source code, our database and our photography as trade secrets and under copyright law.
Proprietary Rights To protect our proprietary rights in our methodologies, database, software, trademarks and other intellectual property, we depend upon a combination of: • Trade secret, misappropriation, unfair competition, copyright, trademark, computer fraud, database protection and other laws; • Registration of copyrights and trademarks; • Nondisclosure, and other contractual provisions with employees and consultants; • License agreements with customers; • Patent protection; and • Technical measures.
These marketplaces provide listings of commercial properties for rent and for sale ranging from traditional offices, serviced offices, co-working spaces, hot-desks, retail locations, industrial units, leisure, hotels and warehousing. Residential The acquisitions of Homes.com and Homesnap enabled us to expand our offerings to the residential for sale market. Homes.com is a homes for sale listings site.
These marketplaces provide listings of commercial properties for rent and for sale ranging from traditional offices, serviced offices, co-working spaces, hot-desks, retail locations, industrial units, leisure, hotels and warehousing. Residential Our Homes.com Network and the acquisition of OnTheMarket have enabled us to expand our offerings to the residential for sale market.
CoStar’s Comprehensive Database We have spent more than 35 years building and acquiring databases of commercial real estate information, which includes information on properties, leasing, sales, comparable sales, tenants and demand statistics, as well as digital images, drone videos and 3-D tours.
Quantitative and Qualitative Disclosures about Market Risk” in this Report. CoStar’s Comprehensive Database We have spent more than 35 years building and acquiring databases of commercial real estate information, which includes information on properties, leasing, sales, comparable sales, tenants and demand statistics, as well as digital images, drone videos and 3-D tours.
Our service offerings span all commercial property types, including office, retail, industrial, multifamily, commercial land, mixed-use and hospitality. With our acquisitions of Homesnap and Homes.com, we also offer online platforms that manage workflow and marketing for residential real estate agents and brokers and provide a portal for homebuyers to view residential property listings.
Our service offerings span all commercial property types, including office, retail, industrial, multifamily, land, mixed-use and hospitality. Through our Homes.com Network and our acquisition of OnTheMarket, we also offer online platforms that manage workflow and marketing for residential real estate agents and brokers and provide portals for homebuyers to view residential property listings.
There is a strong need for an efficient marketplace, where real estate professionals can exchange information, evaluate opportunities using standardized data and interpretive analyses and interact with each other on a continuous basis. 7 A large number of parties involved in commercial and residential real estate and the related business community make use of the services we provide in order to obtain information they need to conduct their businesses, including: • Sales and leasing brokers • Government agencies • Property owners • Mortgage-backed security issuers • Property managers • Appraisers • Design and construction professionals • Pension fund managers • Real estate developers • Reporters • Real estate investment trust managers • Tenant vendors • Investment and commercial bankers • Building services vendors • Mortgage bankers • Communications providers • Mortgage brokers • Insurance companies’ managers • Retailers • Institutional advisors • Hospitality owners • Investors and asset managers • Real estate agents The commercial real estate and related business community historically operated in an inefficient marketplace because of the fragmented approach to gathering and exchanging information within the marketplace.
A large number of parties involved in commercial and residential real estate and the related business community make use of the services we provide in order to obtain information they need to conduct their businesses, including: 7 • Sales and leasing brokers • Government agencies • Property owners • Mortgage-backed security issuers • Property managers • Appraisers • Design and construction professionals • Pension fund managers • Real estate developers • Reporters • Real estate investment trust managers • Tenant vendors • Investment and commercial bankers • Building services vendors • Mortgage bankers • Communications providers • Mortgage brokers • Insurance companies’ managers • Retailers • Institutional advisors • Hospitality owners • Investors and asset managers • Real estate agents The commercial real estate and related business community historically operated in an inefficient marketplace because of the fragmented approach to gathering and exchanging information within the marketplace.
We have established an internal antipiracy team that uses fraud-detection technology to continually monitor use of our services to detect and prevent unauthorized access, and we actively prosecute individuals and firms that engage in this unlawful activity.
Our services also include technical measures designed to detect, discourage and prevent unauthorized access to and/or copying of our intellectual property. We have established an internal antipiracy team that uses fraud-detection technology to continually monitor use of our services to detect and prevent unauthorized access, and we actively prosecute individuals and firms that engage in this unlawful activity.
Our residential websites include homebuyer-focused features like the ability to filter search results according to various criteria (e.g., home features, view and lot type), review rankings of nearby schools and tools to educate consumers on the home buying process.
We believe that consumers expect accurate, actionable and comprehensive homes-for-sale information on a platform that allows collaboration between homebuyers and agents. Our residential websites include homebuyer-focused features like the ability to filter search results according to various criteria (e.g., home features, view and lot type), review rankings of nearby schools and tools to educate consumers on the home buying process.
We have developed and we expect to continue to develop additional services leveraging our database to meet the needs of our existing customers as well as potential new categories of customers.
Over time, we have enhanced and expanded, and we expect to continue to enhance and expand, our existing information, analytics and online marketplace services. We have developed and we expect to continue to develop additional services leveraging our database to meet the needs of our existing customers as well as potentially new categories of customers.
Our services are accessible via the internet and through our mobile applications. Our services are primarily derived from a database of building-specific information and offer customers specialized tools for accessing, analyzing and using our information. Over time, we have enhanced and expanded, and we expect to continue to enhance and expand, our existing information, analytics and online marketplace services.
Land.com and BizBuySell. Our services are accessible via the internet and through our mobile applications. Our services are primarily derived from a database of building-specific information and offer customers specialized tools for accessing, analyzing and using our information.
Reports are provided on a monthly, weekly or daily basis, and provide insights about key metrics such as occupancy, ADR and RevPAR. STAR Reports are only available to industry participants who provide us with data. These participants are typically hotel brands, third-party management companies and owners.
These confidential data reports enable customers to understand their market position based on trends and indices. Reports are provided on a monthly, weekly or daily basis, and provide insights about key metrics such as occupancy, ADR and RevPAR. Benchmarking results are only available to industry participants who provide us with data.
Although copyright registration is not a prerequisite for copyright protection, we have filed for copyright registration for many of our databases, photographs, software and other materials. Under current U.S. copyright law, the arrangement and selection of data may be protected, but the actual data itself may not be. Certain U.K. database protection laws provide additional protections for our U.K. databases.
Under current U.S. copyright law, the arrangement and selection of data may be protected, but the actual data itself may not be. Certain U.K. database protection laws provide additional protections for our U.K. databases. We license our services under license agreements that grant our clients non-exclusive, non-transferable rights.
Land.com is the flagship brand in our network of marketplaces for rural lands for-sale sites, which also includes LandsofAmerica TM , LandAndFarm TM and LandWatch ® . Sellers pay a fee to list their land for-sale, and interested buyers can search the respective sites' listings.
Buyers can search for properties that meet their investment goals and are given access to market analysis and due diligence documents. Land.com is the flagship brand in our network of marketplaces for rural lands for-sale sites, which also includes LandsofAmerica TM , LandAndFarm TM and LandWatch ® .
Users can search for property attributes and sale transaction, loan, lien and tax assessment information. Information in this module is sourced from numerous counties and jurisdictions that provide this data for ownership, title and property tax assessment purposes. • Lender provides lenders the tools to manage their loan portfolio and risk.
Users can search for property attributes and sales transaction, loan, lien and tax assessment information. Information in this module is sourced from numerous counties and jurisdictions that provide this data for ownership, title and property tax assessment purposes. • Benchmarking provides hospitality benchmarking, measuring a hotel’s performance against a self-selected aggregated competitive set.
Because of the importance commercial real estate professionals place on our data and our prominent position in the industry, many of these professionals routinely take the initiative and to proactively report available space and transactions through our online tool, which we refer to as our Marketing Center, or directly to our researchers. 9 Our field research efforts include physical inspections of properties in order to research new availabilities, find additional property inventory, identify new construction, collect tenant information, verify existing information, photograph properties and create high quality videos of interior spaces (including walk-through videos and 3-D virtual tours), amenities and exterior features of properties.
Our field research efforts include physical inspections of properties in order to research new availabilities, find additional property inventory, identify new construction, collect tenant information, verify existing information, photograph properties and create high quality videos of interior spaces (including walk-through videos and 3-D virtual tours), amenities and exterior features of properties.
The BizBuySell, BizQuest and FindaFranchise Franchise Directories allow interested business buyers to search hundreds of franchise opportunities, and franchisors can list their availabilities in the directory on a cost per lead basis. We also provide other services that complement those offered by our primary brands.
Business sellers pay a fee to list their operating businesses for-sale, and interested buyers can search the respective sites' listings for free. The BizBuySell, BizQuest and FindaFranchise Franchise Directories allow interested business buyers to search hundreds of franchise opportunities, and franchisors can list their availabilities in the directory on a cost per lead basis.
Finally, one of the most important and effective quality control measures we rely on is feedback provided by the commercial real estate professionals using our data every day.
Finally, one of the most important and effective quality control measures we rely on is feedback provided by the commercial real estate professionals using our data every day. Services Our portfolio of information, analytics and online marketplaces is branded and marketed to our customers and marketplace end users under the primary brands of CoStar, LoopNet, Apartments.com, Homes.com, OnTheMarket,Ten-X, STR.
The platform allows brokers and sellers to onboard assets, evaluate the results of complimentary marketing campaigns and follow up on pre-qualified leads. Buyers can search for properties that meet their investment goals and are given access to market analysis and due diligence documents.
Our platform provides brokers, sellers, and buyers access to data-driven technology and marketing tools to expand market visibility and decrease time to close. The platform allows brokers and sellers to onboard assets, evaluate the results of complimentary marketing campaigns and follow up on pre-qualified leads.
We also attempt to protect our proprietary databases, our trade secrets and our proprietary information through confidentiality and agreements with our employees and consultants. Our services also include technical measures designed to detect, discourage and prevent unauthorized access to and/or copying of our intellectual property.
These agreements restrict the disclosure and use of our information and prohibit the unauthorized reproduction or transfer of any of our proprietary information, methodologies or analytics. We also attempt to protect our proprietary databases, our trade secrets and our proprietary information through confidentiality and agreements with our employees and consultants.
Homesnap is an online and mobile software platform that provides residential real estate professionals subscription-based access to applications that manage residential real estate agent workflow and marketing campaigns delivered on third-party platforms.
Homes.com is a homes for sale listings site that combines our proprietary research with listing information to allow homebuyers an informative and collaborative experience finding homes for sale or lease. Homes.com provides residential real estate professionals subscription-based access to applications that manage residential real estate agent workflow and receives transaction-based revenue for marketing campaigns delivered on third-party platforms.
Clients of CoStar Risk Analytics solutions include many of the largest banks, life insurance companies, asset managers, hedge funds, government agencies and regulators. • STAR TM Reports provide hospitality benchmarking, measuring a hotel’s performance against a self-selected aggregated competitive set. These confidential data reports enable customers to understand their market position based on trends and indices.
Clients of CoStar Risk Analytics solutions include many of the largest banks, life insurance companies, asset managers, hedge funds, government agencies and regulators.
Our information technology professionals maintain the servers and network components necessary to support our services and research systems.
Our information technology professionals maintain the servers and network components necessary to support our services and research systems. Our core services are delivered from multiple data centers and cloud-based computing platforms to support uninterrupted service for our customers and are continually monitored to ensure fast and reliable customer access, to protect against unauthorized intrusions and to detect vulnerabilities.
Market research (including historical and forecast conditions) and applied analytics are instrumental to the success of industry participants.
Market research (including historical and forecast conditions) and applied analytics are instrumental to the success of industry participants. There is a strong need for an efficient marketplace, where real estate professionals can exchange information, evaluate opportunities using standardized data and interpretive analyses and interact with each other on a continuous basis.
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We believe that consumers expect accurate, actionable and comprehensive homes for sale information on a platform that allows collaboration between homebuyers and agents.
Added
Because of the importance commercial real estate professionals place on our data and our prominent position in the industry, 9 many of these professionals routinely take the initiative and proactively report available space and transactions through our online tool, which we refer to as our Marketing Center, or directly to our researchers.
Removed
Services Our portfolio of information, analytics and online marketplaces is branded and marketed to our customers and marketplace end users under the primary brands of CoStar ® , STR ® , Apartments.com TM , LoopNet ® , Homes.com ® , Homesnap ® , Ten-X ® , BizBuySell ® and Land.com TM .
Added
These participants are typically hotel brands, third-party management companies and owners. • Lender provides lenders the tools to manage their loan portfolio and risk.
Removed
We offer ad hoc reports with a customizable data set providing aggregated hotel performance data for a bespoke set of hotels or standardized industry segments (e.g. market or submarket).
Added
In February 2024, we began selling memberships that allow agents to connect with prospective homebuyers sourced from the agent's own listings. OnTheMarket is a property portal in the U.K. which primarily offers subscriptions-based advertising services to agents. 13 Other Marketplaces Ten-X operates an online auction platform for commercial real estate.
Removed
Homesnap also provides a custom version of its platform, branded as Citysnap™, specifically for the five boroughs of New York City in conjunction with the Real Estate Board of New York's Residential Listing Service. Our residential team is creating new and improved tools to help agents promote their residential listings, connect with buyers and sellers and streamline their daily workflow.
Added
We also provide other services that complement those offered by our primary brands.
Removed
Homesnap also receives transaction-based revenue for short-term advertising delivered on third-party platforms. 13 Other Marketplaces Ten-X operates an online auction platform for commercial real estate. Our platform provides brokers, sellers, and buyers access to data-driven technology and marketing tools to expand market visibility and decrease time to close.
Added
We seek to protect our software’s source code, our database and our photography as trade secrets and under copyright law. Although copyright registration is not a prerequisite for copyright protection, we have filed for copyright registration for many of our databases, photographs, software and other materials.
Removed
Competition The market for information, analytics and online marketplaces generally is competitive and extremely dynamic.
Removed
We license our services under license agreements that grant our clients non-exclusive, non-transferable rights. These agreements restrict the disclosure and use of our information and prohibit the unauthorized reproduction or transfer of any of our proprietary information, methodologies or analytics.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

72 edited+41 added−29 removed141 unchanged
Biggest changeFor example, to generate brand awareness and site traffic for our marketplaces, we have and will continue to invest significant resources in multi-channel marketing campaigns. If these marketing campaigns do not increase brand awareness, site traffic and/or revenues, the cost of these campaigns could have an adverse effect on our financial results.
Biggest changeIf these development efforts and marketing campaigns do not increase brand awareness, site traffic, subscriptions for marketplaces services and/or revenues, the cost of these campaigns could have an adverse effect on our financial results. In addition, as we integrate acquired businesses, we continue to assess which services we believe will best meet the needs of our customers.
Problems faced or caused by our information technology service providers, including content distribution service providers, private network providers, internet providers and third-party web-hosting providers, or with the systems by which they allocate capacity among their customers (as applicable), could adversely affect the experience of our users.
Problems faced or caused by our information technology service providers, including content distribution network providers, private network providers, internet service providers and third-party web-hosting providers, or with the systems by which they allocate capacity among their customers (as applicable), could adversely affect the experience of our users.
Internet search engine providers could form partnerships or enter into other business relationships with our competitors resulting in competitors’ sites 23 receiving higher search result rankings. Internet search engines are increasingly placing alternative search features (such as featured snippets, local map results and other immersive experiences) on the search engine results page above or more prominently than search engine results.
Internet search engine providers could form partnerships or enter into other business relationships with our competitors resulting in competitors’ sites receiving higher search result rankings. Internet search engines are increasingly placing alternative search features (such as featured snippets, local map results and other immersive experiences) on the search engine results page above or more prominently than search engine results.
These covenants restrict our ability and the ability of our domestic subsidiaries to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) merge or consolidate with another person, and (v) sell, assign, lease or otherwise dispose of all or substantially all of our assets.
These covenants restrict our ability and the ability of our domestic subsidiaries to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) 30 merge or consolidate with another person, and (v) sell, assign, lease or otherwise dispose of all or substantially all of our assets.
Longer-term physical impacts may also result 28 in changing consumer preferences, which may adversely impact demand for certain of our products. Transition impacts of climate change may subject us to increased regulations, reporting requirements (such as the SEC’s proposed climate change disclosure rule), standards, or expectations regarding the environmental impacts of our business.
Longer-term physical impacts may also result in changing consumer preferences, which may adversely impact demand for certain of our products. Transition impacts of climate change may subject us to increased regulations, reporting requirements (such as the SEC’s proposed climate change disclosure rule), standards, or expectations regarding the environmental impacts of our business.
Our competitors may be able to undertake more effective 21 marketing campaigns, obtain more data, adopt more aggressive pricing policies, make more attractive offers to potential employees, subscribers, advertisers, distribution partners and content providers or may be able to respond more quickly to new or emerging technologies or changes in user requirements.
Our competitors may be able to undertake more effective marketing campaigns, obtain more data, adopt more aggressive pricing policies, make more attractive offers to potential employees, subscribers, advertisers, distribution partners and content providers or may be able to respond more quickly to new or emerging technologies or changes in user requirements.
Disruptions in, technical problems with, or reductions in ability to access our services for any reason could damage our users’ businesses, harm our reputation, result in additional costs or reduce demand for our information, analytics and online marketplace services, any of which could harm our business, results of operations and financial condition.
Disruptions in, technical problems with, or reductions in ability to access our services for any reason could damage our users’ businesses, harm our reputation, result in additional costs or reduce 25 demand for our information, analytics and online marketplace services, any of which could harm our business, results of operations and financial condition.
In addition, the impacts of climate change on the global economy and our industry are rapidly evolving. Physical impacts of climate change (including, but not limited to, floods, droughts, more frequent and/or intense storms, and wildfires) may disrupt our operations, as well as the operations of our suppliers and customers.
In addition, the impacts of climate change on the global economy and our industry are rapidly evolving. Physical impacts of climate change (including, but not limited to, floods, droughts, more frequent and/or intense storms, and wildfires) may 27 disrupt our operations, as well as the operations of our suppliers and customers.
For example, when a user enters in a search query for an apartment building name or address into an internet search engine, the internet search engine’s ranking of our Apartments.com webpages will determine how prominently such webpages are displayed on the search engine results page.
For example, when a user enters in a search query for an apartment building name or address into an internet search engine, the internet search engine’s ranking of our Apartments.com or Homes.com webpages will determine how prominently such webpages are displayed on the search engine results page.
Further, significant foreign exchange rate fluctuations resulting in a decline in the respective local currency may 30 decrease the value of our foreign assets, as well as decrease our revenues and earnings from our foreign subsidiaries, which would reduce our profitability and adversely affect our financial position.
Further, significant foreign exchange rate fluctuations resulting in a decline in the respective local currency may decrease the value of our foreign assets, as well as decrease our revenues and earnings from our foreign subsidiaries, which would reduce our profitability and adversely affect our financial position.
Compliance with any of the foregoing laws and regulations can be costly, can delay or impede the development of new products, and may require us to change the way we operate. 32 The interpretation and application of many privacy and data protection laws are uncertain.
Compliance with any of the foregoing laws and regulations can be costly, can delay or impede the development of new products, and may require us to change the way we operate. The interpretation and application of many privacy and data protection laws are uncertain.
Our efforts to prevent, detect and respond to data security incidents, may not be effective due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
Our efforts to prevent, detect and respond to data 24 security incidents, may not be effective due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. Item 1B. Unresolved Staff Comments None.
There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. Item 1B. Unresolved Staff Comments None. 32
Competitors may introduce different solutions that attract users away from our services or provide solutions similar to ours that have the advantage of better branding or marketing resources.
Competitors may introduce different solutions that attract users away from our services or provide solutions similar to ours that 20 have the advantage of better branding or marketing resources.
Risks related to our indebtedness We have a significant amount of indebtedness, which could decrease our flexibility and adversely affect our business, financial condition and results of operations. As of December 31, 2022, we had $1 billion of Senior Notes outstanding and an additional approximately $750 million available to be drawn under the 2020 Credit Agreement.
Risks related to our indebtedness We have a significant amount of indebtedness, which could decrease our flexibility and adversely affect our business, financial condition and results of operations. As of December 31, 2023, we had $1 billion of Senior Notes outstanding and an additional approximately $750 million available to be drawn under the 2020 Credit Agreement.
We compete against many other real estate information, analytics and marketing service providers for business. If clients cancel services or decide not to renew their subscription agreements and we do not sell new services to our existing clients or attract new clients, then our renewal rate, net new sales and revenues may decline or fail to meet expectations.
We compete against many other real estate information, analytics and marketing service providers for business. If clients cancel services or decide not to renew their subscription agreements and we do not sell new services to our existing clients or attract new clients, then our renewal rate, net new bookings and revenues may decline or fail to meet expectations.
The laws of certain countries do not protect proprietary rights to the same extent as the laws of the U.S. and, therefore, in certain jurisdictions, we may be unable to protect our intellectual property and our proprietary technology 29 adequately against unauthorized third-party copying or use, which could harm our competitive position.
The laws of certain countries do not protect proprietary rights to the same extent as the laws of the U.S. and, therefore, in certain jurisdictions, we may be unable to protect our intellectual property and our proprietary technology 28 adequately against unauthorized third-party copying or use, which could harm our competitive position.
A depressed real estate market has a negative 22 impact on our core customer base, which could decrease demand for our information, analytics and online marketplaces. Also, companies in this industry may consolidate, often in order to reduce expenses.
A depressed real estate market has a negative impact on our core customer base, which could decrease demand for 21 our information, analytics and online marketplaces. Also, companies in this industry may consolidate, often in order to reduce expenses.
Our business and results of operations may be, and our financial condition may be, impacted by the COVID-19 pandemic and its effects on the global economy, the real estate industry, and our customers,, and such impact could be materially adverse and continue for an unknown period of time.
Our business and results of operations may be, and our financial condition may be, impacted by the lasting effects of the COVID-19 pandemic on the global economy, the real estate industry, and our customers and such impact could be materially adverse and continue for an unknown period of time.
In addition, the software, internal applications and systems underlying our services are complex and may not be error-free. We may encounter technical problems when we attempt to enhance our software, internal applications and systems. Our users rely on our services for the conduct of their own businesses.
In addition, the software, internal applications and systems underlying our services are complex and may not be error-free. We may encounter technical problems when we attempt to enhance our software, internal applications and systems. Our users rely on our services to conduct their own businesses.
Global economic uncertainties or downturns could adversely affect our business and results of operations, including financial and credit market fluctuations, changes in economic policy, increased inflation and responsive actions, rising interest rates, labor shortages, supply chain disruptions, trade uncertainty, political unrest, geographical instability or other impacts from the macroeconomic environment.
Global economic uncertainties or downturns could adversely affect our business and results of operations, including financial and credit market fluctuations, changes in economic policy, increased inflation and responsive actions, rising interest rates or a period of elevated interest rates, labor shortages, supply chain disruptions, trade uncertainty, political unrest, geographical instability or other impacts from the macroeconomic environment.
Our international operations and expansion subject us to additional business risks, including: currency exchange rate fluctuations; difficulty in adapting to the differing business practices and laws in foreign countries, including differing laws regarding privacy and data protection; difficulty in managing foreign operations; limited protection for intellectual property rights in some countries; difficulty in collecting accounts receivable and longer collection periods; costs of enforcing contractual obligations; impact of recessions in economies outside the U.S.; geopolitical instability, terrorism and war, including the conflict between Ukraine and Russia; and potentially adverse tax consequences.
Our international operations and expansion subject us to additional business risks, including: currency exchange rate fluctuations; difficulty in adapting to the differing business practices and laws in foreign countries, including differing laws regarding privacy and data protection; difficulty in managing foreign operations; limited protection for intellectual property rights in some countries; difficulty in collecting accounts receivable and longer collection periods; costs of enforcing contractual obligations; impact of recessions in economies outside the U.S.; geopolitical instability, terrorism and war; and potentially adverse tax consequences.
In December 2021, we announced our plans to expand our research and technology center in Richmond, Virginia. These plans will require significant capital expenditures over the next several years and our business plans may change. Future changes in growth or fluctuations in cash flow may also negatively impact our ability to finance this project.
In December 2021, we announced our plans to expand our research and technology center in Richmond, Virginia. These plans have required and will continue to require significant capital expenditures over the next several years and our business plans may change. Future changes in growth or fluctuations in cash flow may also negatively impact our ability to finance this project.
These laws and regulations are evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations. For example, the GDPR introduced new data protection requirements in the EU and imposes substantial fines for breaches of the data protection rules.
These laws and regulations are evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations. For example, the GDPR creates data protection requirements in the EU and UK and imposes substantial fines for breaches of the data protection rules.
To increase our revenue growth, we continue to invest in our business, including internal investments in product and content development to expand the breadth and depth of services we provide to our customers and external investments in sales and marketing to generate brand awareness.
To increase our revenue growth, we continue to invest significantly in our business, including internal investments in product and content development to expand the breadth and depth of services we provide to our customers and external investments in sales and marketing to generate brand awareness and traffic to our websites.
We expect that unauthorized parties will continue to attempt to gain access to or disrupt our IT systems or facilities through various means, including hacking into IT Systems or facilities or those of our customers or vendors, or attempting to fraudulently induce (for example, through spear phishing attacks or social engineering) our employees, customers, vendors or other users of IT Systems into disclosing user names, passwords, or other sensitive information, which may in turn be used to access our IT Systems.
We expect that unauthorized parties will continue to attempt to gain access to or disrupt our IT systems or facilities through various means, including hacking into IT Systems or facilities or those of our customers or vendors, malware (including ransomware) or attempting to fraudulently induce (for example, through spear phishing attacks or social engineering) our employees, customers, vendors or other users of IT Systems into disclosing access credentials or other sensitive information, which may in turn be used to access our IT Systems.
The real estate market may be adversely impacted by many different factors, including lower than expected job growth or job losses resulting in reduced real estate demand; reduced real estate demand due to continued remote work policies; rising interest rates and slowing transaction volumes due to the impact of the COVID-19 pandemic or other macroeconomic events that negatively impact investment returns; excessive speculative new construction in localized markets resulting in increased vacancy rates and diminished rent growth; unanticipated disasters; and other adverse events such as decreased growth in the working age population resulting in reduced demand for all types of real estate.
The real estate market may be adversely impacted by many different factors, including lower than expected job growth or job losses resulting in reduced real estate demand; reduced real estate demand due to continued remote work policies or a period of elevated interest rates; rising interest rates, inflation, slowing transaction volumes and other macroeconomic trends that negatively impact investment returns; excessive speculative new construction in localized markets resulting in increased vacancy rates and diminished rent growth; unanticipated disasters or global health events; and other adverse events such as decreased growth in the working age population resulting in reduced demand for all types of real estate.
Our operating margins may experience downward pressure in the short term as a result of these investments. Furthermore, our investments may not produce the expected results. If we are unable to successfully execute our investment strategy, we may experience decreases in our revenues or revenue growth rate and operating margins.
Our operating margins may experience downward pressure in the short term as a result of these investments. Furthermore, our investments may not produce the expected results. If we are unable to successfully execute our investment strategy, we may experience decreases in our revenues or revenue growth rate and operating margins. Introducing new products may be difficult and expensive.
Further, with respect to the Apartments.com network of rental websites, our ability to attract and retain advertisers also depends on the current apartment rental market and apartment vacancy rates. If vacancy rates are too high or too low, advertisers may not need to utilize our marketplace services.
Further, with respect to the Apartments.com Network and LoopNet Networks, our ability to attract and retain advertisers also depends on the current apartment rental market and apartment vacancy rates and commercial rental market and vacancy rates, respectively. If vacancy rates are too high or too low, advertisers may not need to utilize our marketplace services.
Similarly, we are regularly exposed to vulnerabilities in widely deployed third-party software that we use in the ordinary course of business, such as the recently identified Log4J vulnerability. While this vulnerability did not have a material adverse effect on our operations, it and similar incidents require us to devote time and resources to remediation on a regular basis.
We are regularly exposed to vulnerabilities in widely deployed third-party software that we use in the ordinary course of business, such as the Log4J vulnerability. While these vulnerabilities did not have a material adverse effect on our operations, they and similar incidents require us to devote time and resources to monitoring and remediation on a regular basis.
Significant break-up fees incurred in the future may adversely affect our results of operation and financial condition. As a result of our acquisitions, we had approximately $2.6 billion of goodwill and intangibles as of December 31, 2022. Future acquisitions may increase this amount.
Significant break-up fees incurred in the future may adversely affect our results of operations and financial condition. As a result of our acquisitions, we had approximately $2.7 billion of goodwill and intangibles as of December 31, 2023. Future acquisitions may increase this amount.
An increasing number of organizations, including large merchants, businesses, technology companies and financial institutions, as well as government institutions, have disclosed security incidents, disruptions to, and breaches of their or third-party providers’ IT Systems, some of which have involved sophisticated and highly targeted attacks, including on websites, mobile applications and infrastructure.
An increasing number of organizations, including large merchants, businesses, technology companies and financial institutions, as well as government institutions, have disclosed security incidents, disruptions to, and breaches of their or third-party providers’ IT Systems, some of which have involved sophisticated and highly targeted attacks, including on websites, mobile applications and infrastructure, following a trend of cyberattacks increasing in frequency and magnitude on a global basis.
We currently plan to finance construction with cash on hand. Use of cash on hand to finance construction would reduce the amount of cash available for other corporate uses and could also reduce our ability to meet our scheduled debt service obligations or to meet the covenants required to borrow additional funds under our 2020 Credit Agreement.
Use of cash on hand to finance construction has and will continue to reduce the amount of cash available for other corporate uses and could also reduce our ability to meet our scheduled debt service obligations or to meet the covenants required to borrow additional funds under our 2020 Credit Agreement.
The COVID-19 pandemic has created significant economic volatility, uncertainty and disruption around the world, including in the real estate industry. The demand for office space could decrease significantly as businesses implement hybrid or all work-from-home arrangements in response to employee desire for more flexibility, which may lead to a downturn in the commercial real estate market.
The COVID-19 pandemic created significant economic volatility, uncertainty and disruption around the world, including in the real estate industry. 26 The demand for office space decreased during and following the COVID-19 pandemic as businesses implemented hybrid or all work-from-home arrangements in response to employee desire for more flexibility, which may lead to a downturn in the commercial real estate market.
In the past three years, we have not experienced a materially disruptive information security breach, but any actual or perceived 25 breaches of our security could result in any or all of the following, among other things, any of which could adversely affect our business and results of operations: • Interrupt our operations; • Result in our systems or services being unavailable; • Result in improper disclosures of data; • Result in improper payments; • Materially harm our reputation and brands; • Result in significant regulatory scrutiny and legal and financial exposure; • Cause us to incur significant remediation and compliance costs; • Lead to loss of customer confidence in, or decreased use of, our products and services; • Divert the attention of management from the operation of our business; and • Result in significant contractual penalties or other payments as a result of third-party losses or claims.
In the past three years, we have not experienced a material cybersecurity incident, but any actual or perceived cybersecurity incidents or breaches of our security could result in any or all of the following, among other things, any of which could adversely affect our business and results of operations: • Interrupt our operations; • Result in our systems or services being unavailable; • Result in improper disclosures of data; • Result in improper payments; • Materially harm our reputation and brands; • Result in significant regulatory scrutiny, enforcement actions, legal proceedings and claims (including class action lawsuits) and other legal and financial exposure; • Cause us to incur significant remediation, system restoration, incident response and compliance costs; • Lead to loss of customer confidence in, or decreased use of, our products and services; • Divert the attention of management from the operation of our business; and • Result in significant contractual penalties or other payments as a result of third-party losses or claims.
The coverage under our insurance policies for cybersecurity and related issues may not be adequate to reimburse us for losses caused by cyberattacks or other security incidents.
The coverage under our insurance policies for cybersecurity and related issues may not be adequate to reimburse us for losses caused by cyberattacks or other security incidents or be available on economically reasonable terms or at all.
Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, security breaches, computer viruses, telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins, earthquakes and similar events. These risks may be increased with respect to operations housed at facilities we do not own or control.
We do not own or control the operation of certain of these facilities. Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, security breaches, computer viruses, telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins, earthquakes and similar events.
There can be no assurance that our future cash flows will be sufficient to make payments of interest or principal on the Senior Notes or any amounts due and payable under the 2020 Credit Agreement.
Borrowings under the 2020 Credit Agreement bear interest at varying rates and expose us to interest rate risk. There can be no assurance that our future cash flows will be sufficient to make payments of interest or principal on the Senior Notes or any amounts due and payable under the 2020 Credit Agreement.
The measures we use to attract and retain key personnel may not be enough to attract and retain the personnel we need or to offset the impact on our business of the loss of the services of Mr. Florance or other key officers or employees. Our internal and external investments may place downward pressure on our operating margins.
The measures we use to attract and retain key personnel may not be enough to attract and retain the personnel we need or to offset the impact on our business of the loss of the services of Mr. Florance or other key officers or employees. If Mr.
If we or any one or more of these service providers fail to maintain adequate systems for authorization and processing credit card payments, it could cause one or more of the major credit card companies to disallow our continued use of their payment products.
If we or any one or more of these service providers fail to maintain adequate systems to authorize and process credit card transactions, one or more of the major credit card companies could disallow our continued use of their payment products.
Any errors, defects, disruptions or other performance problems with our services could harm our reputation, business, results of operations and financial condition. We are planning to undertake a large infrastructure project to build out our campus in Richmond, Virginia, the costs of which could impact our financial condition and results of operations.
Any errors, defects, disruptions or other performance problems with our services could harm our reputation, business, results of operations and financial condition. The significant costs associated with undertaking a large infrastructure project to build out our campus in Richmond, Virginia, have impacted and will continue to impact our financial condition and results of operations.
Our marketplace businesses, including LoopNet, the Apartments.com network of rental websites, our residential brands including Homes.com and Homesnap and the Land.com Network, depend on advertising revenues generated primarily through sales to persons in the real estate industry, including property managers and owners and other advertisers.
Our marketplace businesses, including the LoopNet Network, the Apartments.com Network, our Homes.com and OnTheMarket residential marketplaces, CoStar Showcase and the Land.com Network, depend on advertising revenues generated primarily through sales to persons in the real estate industry, including broker, agents, property managers and owners, real estate agents, and other advertisers.
We own and manage some IT Systems but also rely on third-party service providers and vendors for a range of products and services, including cloud products/services, that are critical to internal and/or external customer-facing operations. In the course of our business, we and certain of our third-party providers collect, use, transmit and disclose Confidential Information.
We own and manage some IT Systems but also rely on third-party service providers and vendors for a range of products and services, including cloud products/services, that are critical to internal and/or external customer-facing operations.
We have experienced and expect to continue to experience in the future, cyberattacks as well as breaches of our security measures due to human error, malfeasance, system errors or vulnerabilities or other irregularities.
We have experienced and expect to continue to experience in the future, cyberattacks as well as breaches of our security measures due to human error, malfeasance, system errors or vulnerabilities or other irregularities. In the past, one of our vendors providing IT infrastructure management software was compromised by cyberattacks.
Despite these measures and similar measures implemented by many third-party providers, our IT Systems, or those of third parties on which we rely, may be disrupted or damaged and our Confidential Information may be compromised, corrupted, lost or stolen.
Our IT Systems, or those of third parties on which we rely, may be disrupted or damaged and our Confidential Information may be compromised, corrupted, lost or stolen.
The occurrence of any of the foregoing events could result in damage to our systems and hardware or could cause them to fail completely, and our insurance may not cover such events or may be insufficient to compensate us for losses that may occur. 26 A failure of our systems at any site could result in reduced functionality for our users, and a total failure of our systems could cause our mobile applications or websites to be inaccessible.
The occurrence of any of the foregoing events could result in damage to our systems and hardware or could cause them to fail completely, and our insurance may not cover such events or may be insufficient to compensate us for losses that may occur.
The extent and duration of any future continued weakening of the economy is unknown, and there can be no assurance that any of the governmental or private sector initiatives designed to strengthen the economy will be successful or available to us and our customers and, if successful, when the benefits will be seen.
The extent and duration of any future weakening of the economy or future downturns in the commercial real estate market as a lasting result of the COVID-19 pandemic is unknown, and there can be no assurance that any of the governmental or private sector initiatives designed to strengthen the economy will be successful or available to us and our customers and, if successful, when the benefits will be seen.
Awareness and differentiation of our brands are important for attracting and expanding the number of users of, and subscribers to, our online marketplaces, such as LoopNet, the Apartments.com network of rental websites, our Homes.com and Homesnap residential marketplaces, CoStar Showcase and the Land.com Network.
We rely heavily on our brands, which we believe are key assets of our company. Awareness and differentiation of our brands are important for attracting and expanding the number of users of, and subscribers to, our online marketplaces, such as the LoopNet Network, the Apartments.com Network, our Homes.com and OnTheMarket residential marketplaces, the Land.com Network and our CoStar Showcase.
We are also likely to incur severance costs and other integration costs post-acquisition. Costs in connection with acquisitions and integrations may be higher than expected and could adversely affect our financial condition, results of operation or prospects of the combined business.
Costs in connection with acquisitions and integrations may be higher than expected and could adversely affect our financial condition, results of operations or prospects of the combined business.
We depend on processing vendors to complete credit and debit card transactions and ACH payments, both for payments made to us directly for our services and for payments made by renters to landlords using our online leasing services.
We depend on processing vendors to process a significant number of credit and debit card transactions and ACH payments, for payments made to us directly for our services, by renters to landlords using our online leasing services, or by real estate agents to purchase our Homes.com services.
Third parties may misappropriate our data through website scraping, robots or other means and aggregate and display this data on their websites. In addition, “copycat” websites may misappropriate data on our website and attempt to imitate our brands or the functionality of our website.
In addition, “copycat” websites may misappropriate data on our website and attempt to imitate our brands or the functionality of our website.
Increases in our operating expenses could negatively impact our operating results if we are unable to generate more revenues through increased sales of subscriptions to our marketplace products. If real estate professionals or other advertisers reduce or cancel their advertising spending with us and we are unable to attract new advertisers, our operating results would be harmed.
If real estate professionals or other advertisers reduce or cancel their advertising spending with us and we are unable to attract new advertisers, our operating results would be harmed.
As stated above, our business relies on IT Systems and involves the generation, collection, storage, processing and transmission of Confidential Information, including personal information and proprietary business information. We own and manage IT Systems but also rely on third-party managed IT Systems and a broad array of third-party products and services to support our business operations.
We own and manage IT Systems but also rely on third-party managed IT Systems and a broad array of third-party products and services to support our business operations.
For example, we may be unable to fully integrate Homesnap, Homes.com, BureauxLocaux and Business Immo with CoStar Group when and as expected. 24 We were previously subject to a consent order agreed to among the FTC staff, CoStar Group and LoopNet on April 17, 2012 in connection with the LoopNet merger.
We were previously subject to a consent order agreed to among the FTC staff, CoStar Group and LoopNet on April 17, 2012 in connection with the LoopNet merger.
We are likely to incur costs in connection with proposed acquisitions, but may ultimately be unable or unwilling to consummate any particular proposed transaction for various reasons. For example, in 2021, the FTC withheld approval for our proposed acquisition of RentPath, the purchase agreement was subsequently terminated and we incurred a termination fee of $52 million.
For example, in 2021, the FTC withheld approval for our proposed acquisition of RentPath, the purchase agreement was subsequently terminated and we incurred a termination fee of $52 million. 23 We are also likely to incur severance costs and other integration costs post-acquisition.
The techniques used to obtain unauthorized, improper or illegal access to a target’s systems, data or customers’ data, disable or degrade services, or sabotage systems are constantly evolving and have become increasingly complex and sophisticated, may be difficult to detect quickly and often are not recognized or detected until after they have been launched against a target.
The tools and techniques (including artificial intelligence) used to obtain unauthorized, improper or illegal access to a target’s systems, data or customers’ data, disable or degrade services, or sabotage systems are constantly evolving and have become increasingly complex and sophisticated.
Google, Bing, DuckDuckGo and other internet search engines drive traffic to our websites, including CoStar.com, the Apartments.com network of rental websites, the LoopNet.com network of commercial real estate websites, Ten-X.com, our Homes.com and Homesnap residential marketplaces, the BizBuySell.com network of business for-sale websites and the Land.com Network.
Our ability to generate revenues from our marketplace business depends, in part, on our ability to 22 attract users to our websites. Google, Bing, DuckDuckGo and other internet search engines drive traffic to our websites, including CoStar.com, the LoopNet Network, the Apartments.com Network, our Homes.com and OnTheMarket residential marketplaces, the Land.com Network, Ten-X.com and BizBuySell.
We may not successfully integrate acquired businesses or assets and may not achieve anticipated benefits of an acquisition, including expected synergies.
We may not successfully integrate acquired businesses or assets and may not achieve anticipated benefits of an acquisition, including expected synergies. For example, we may be unable to fully integrate BureauxLocaux, Business Immo and OnTheMarket with CoStar Group when and as expected.
There are also federal laws covering our activities that are a source of potential liability for our business, including the CAN-SPAM Act, the TCPA, and the FCRA. In particular, any claims that we have violated the TCPA could be costly to litigate and could expose us to substantial statutory damages or settlement costs.
In particular, any claims that we have violated the TCPA could be costly to litigate and could expose us to substantial statutory damages or settlement costs.
In response to concerns over inflation, the U.S. Federal Reserve raised interest rates in each quarter of 2022 and the first quarter of 2023, and has signaled that it expects additional interest rate increases, which could negatively impact the real estate market.
In response to concerns over inflation, the U.S. Federal Reserve raised interest rates in each quarter of 2022 and the first, second and third quarters 2023.
Similar laws have been proposed, and likely will continue to be proposed, in other states and at the federal level, and if passed, may have potentially conflicting requirements that would make compliance challenging.
Other state privacy laws apply to operations, and similar laws have been proposed, and likely will continue to be proposed, in other states and at the federal level, and if passed, may have potentially conflicting requirements that would make compliance challenging. 31 In addition to risks we face under applicable privacy laws, we are subject to evolving consumer protection and marketing laws and increased litigation and government enforcement by the Federal Trade Commission and state Attorneys General.
We generally see higher sales of Apartments.com listing services during the peak summer rental season and higher CoStar sales towards the end of the year; however, sales fluctuate from year-to-year and may fluctuate more widely when there are changes in general economic conditions or the industry, such as changes resulting from the COVID-19 pandemic and due to other macroeconomic factors.
For example, we generally see higher sales of Apartments.com listing services during the peak summer rental season and higher CoStar sales towards the end of the year; however, sales fluctuate from year-to-year and may fluctuate more widely when there are changes in general economic conditions or the industry.The timing of widely observed holidays and vacation periods, particularly slowdowns during the end-of-year holiday period, and availability of real estate agents and related service providers during these periods, could significantly affect our quarterly operating results during that period.
The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation. Many states have adopted, or are considering enacting, similar laws. For example, the CPRA went into effect in January 2023 (with a lookback period until January 2022).
The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.
Further, we may not be able to recover any or all damages suffered as a result of such security breach or other security incident from such third-party providers. Notwithstanding our efforts, there can be no assurance that vulnerabilities in widely deployed software will not materially harm our business.
In addition, any cyberattacks or data security breaches affecting companies that we acquire our customers or vendors (including data center and cloud computing providers) could have similar negative effects on our business. Further, we may not be able to recover any or all damages suffered as a result of such security breach or other security incident from such third-party providers.
We may be unable to increase awareness of our brands, including CoStar, LoopNet, Apartments.com, BizBuySell, Land.com, STR, Ten-X, Homes.com and Homesnap, which could adversely affect our business. We rely heavily on our brands, which we believe are key assets of our company.
Extrapolations annualizing initial sales results may differ materially from actual results realized in future periods and may not take into account other future market conditions that may negatively affect those results. We may be unable to increase awareness of our brands, including CoStar, LoopNet, Apartments.com, Homes.com Land.com, BizBuySell, STR, Ten-X, and OnTheMarket, which could adversely affect our business.
Numerous and evolving cybersecurity threats, including advanced and persisting cyberattacks, phishing and social engineering schemes, could compromise the confidentiality, availability and integrity of the data such as Confidential Information and our IT systems.
Numerous and evolving cybersecurity threats, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as advanced cyberattacks, phishing, social engineering schemes, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware, could compromise the confidentiality, availability and integrity of Confidential Information and our IT systems.
Further, the COVID-19 pandemic may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks. We are subject to a number of risks related to acceptance of credit cards and debit cards and facilitation of other customer payments.
We are subject to a number of risks related to acceptance of credit cards and debit cards and facilitation of other customer payments.
The GDPR increased our responsibility and liability in relation to personal data that we process. The CCPA expands the rights of California residents to access and require deletion of their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used.
The GDPR increased our responsibility and liability in relation to personal data that we process. The CCPA, among other things, provides the rights to California residents related to their personal information, places limitations on data uses and creates new audit requirements for higher risk data.
As a result, our business, results of operations and financial condition could be adversely affected. Our marketing expenses may increase in connection with our efforts to maintain or increase traffic to our websites.
As a result, our business, results of operations and financial condition could be adversely affected. Increases in our operating expenses could negatively impact our operating results if we are unable to generate more revenues through increased sales of subscriptions to our marketplace products.
Risks related to our international operations International operations expose us to additional business risks, which may reduce our profitability.
The loss or degradation of this listings data could materially and adversely affect traffic to our websites and mobile applications, which could severely harm our business, results of operations and financial condition. Risks related to our international operations International operations expose us to additional business risks, which may reduce our profitability.
The majority of the communications, network and computer hardware used to operate our mobile applications and websites are located at facilities in Virginia and California. We do not own or control the operation of certain of these facilities.
Given this, any significant disruption of or interference with AWS or ACC, whether temporary, regular, or prolonged, would negatively impact our operations and our business. We also maintain communications, network and computer hardware used to operate some of our mobile applications and websites at facilities in Virginia and California.
In addition to risks we face under privacy laws, we are subject to evolving consumer protection and marketing laws and increased litigation and government enforcement by the Federal Trade Commission and state Attorneys General. These agencies are aggressively interpreting and enforcing federal and state consumer protection laws in relation to very broad sales and marketing and advertising contexts.
These agencies are aggressively interpreting and enforcing federal and state consumer protection laws in relation to very broad sales and marketing and advertising contexts. There are also federal laws covering our activities that are a source of potential liability for our business, including the CAN-SPAM Act, the TCPA, and the FCRA.
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In addition, as we integrate acquired businesses, we continue to assess which services we believe will best meet the needs of our customers.
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For example, we have and will continue to invest significantly in developing our marketplaces and content and, to generate brand awareness and site traffic, we have and will continue to invest significant resources in multi-channel marketing campaigns for select marketplaces.
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In addition, we generally incur greater marketing expenses during the second quarter, which coincides with the peak season for apartment rentals. The timing of widely observed holidays and vacation periods, particularly slowdowns during the end-of-year holiday period, and availability of real estate agents and related service providers during these periods, could significantly affect our quarterly operating results during that period.
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Florance were to become unavailable for any reason, there could be a material adverse impact on our operations. The loss of other key personnel, including members of management as well as key technology, product development, and marketing personnel, could also disrupt our operations and have an adverse effect on our business.
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Our ability to generate revenues from our marketplace business depends, in part, on our ability to attract users to our websites.
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Our internal and external investments may place downward pressure on our operating margins.
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We have expended resources to implement and maintain security measures designed to protect IT Systems and Confidential Information, including engaging a third-party vendor to conduct an annual audit of our information security systems in accordance with NIST CSF benchmarks.
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If we are unable to do so successfully, our brands may be adversely affected, and we may not be able to maintain or grow our current revenue and profit levels. In February 2024 we launched our Homes.com monetization strategy. We have incurred, and expect to continue to incur, significant costs to develop and market Homes.com.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur staff in Richmond, Virginia occupy an owned building located at 501 S 5th Street, where we occupy 276,695 square feet and lease out 33,912 square feet to another tenant through March of 2023; an owned building located at 901 Semmes Avenue, where we own and occupy 117,448 square feet; and leased space at 951 E Byrd St where we occupy 97,171 square feet.
Biggest changeOur staff in Richmond, Virginia occupy an owned building located at 501 S 5th Street, where we occupy approximately 310,000 square feet, an owned building located at 901 Semmes Avenue, where we own and occupy approximately 117,000 square feet; and leased space at 951 E Byrd St., where we occupy approximately 97,000 square feet.
Additionally, we lease office space in a variety of other metropolitan areas. These locations include, among others, the following: Hendersonville, Tennessee; Norfolk, Virginia; Boston, Massachusetts; New York, New York; San Francisco, California; and Los Angeles, California. 33 We believe these facilities are suitable and appropriately support our business needs.
Additionally, we lease office space in a variety of other metropolitan areas. These locations include, among others, the following: Hendersonville, Tennessee; Norfolk, Virginia; Boston, Massachusetts; New York, New York; San Francisco, California; and Los Angeles, California. We believe these facilities are suitable and appropriately support our business needs.
Item 2. Properties Our headquarters is located at 1331 L Street, NW, in downtown Washington, DC, where we occupy approximately 169,093 square feet of office space, with a lease that expires on May 31, 2025 (with two five-year renewal options). Our headquarters is used primarily by our North America operating segment.
Item 2. Properties Our headquarters is located at 1331 L Street, NW, in downtown Washington, DC, where we occupy approximately 169,000 square feet of office space, with a lease that expires on May 31, 2025 (with two five-year renewal options). Our headquarters is used primarily by our North America operating segment.
Our principal facility in the U.K. is located in London, where we occupy 23,064 square feet of office space. Our lease for this facility has a term ending August 31, 2025. This facility is used by our International operating segment.
Our principal facility in the U.K. is located in London, where we occupy 42,000 square feet of office space. Our lease for this facility has a term ending August 31, 2025. This facility is used by our International operating segment, including our recent acquisition, OnTheMarket.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNone of these share purchases were part of a publicly announced program to purchase common stock of the Company. 35 Stock Price Performance Graph The stock performance graph below shows how an initial investment of $100 in our common stock would have compared to: • An equal investment in the S&P 500 Index; and • An equal investment in the S&P 500 Internet Services & Infrastructure Index.
Biggest changeStock Price Performance Graph The stock performance graph below shows how an initial investment of $100 in our common stock would have compared to: • An equal investment in the S&P 500 Index; and • An equal investment in the S&P 500 Internet Services & Infrastructure Index.
We do not anticipate paying any dividends on our common stock during the foreseeable future, but intend to retain any earnings for future growth of our business. Recent Issues of Unregistered Securities. We did not issue any unregistered securities during the year ended December 31, 2022. Issuer Purchases of Equity Securities.
We do not anticipate paying any dividends on our common stock during the foreseeable future, but intend to retain any earnings for future growth of our business. Recent Issues of Unregistered Securities. We did not issue any unregistered securities during the year ended December 31, 2023. Issuer Purchases of Equity Securities.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market under the symbol “CSGP.” As of January 31, 2023, there were 1,731 holders of record of our common stock. Dividend Policy. We have never declared or paid any dividends on our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market under the symbol “CSGP.” As of January 31, 2024, there were 1,654 holders of record of our common stock. Dividend Policy. We have never declared or paid any dividends on our common stock.
The following table is a summary of our repurchases of common stock for the quarter ended December 31, 2022: ISSUER PURCHASES OF EQUITY SECURITIES Month, 2022 Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 through 31 13,854 $ 70.67 — — November 1 through 30 17,151 82.68 — — December 1 through 31 4,026 81.26 — — Total 35,031 $ 77.77 — — _____________________ (1) The number of shares purchased consists of shares of common stock tendered by employees to the Company to satisfy the employees' minimum tax withholding obligations arising as a result of vesting of restricted stock grants under the Company’s 2016 Stock Incentive Plan, as amended, which shares were purchased by the Company based on their fair market value on the trading day immediately preceding the vesting date.
The following table is a summary of our repurchases of common stock for the quarter ended December 31, 2023: ISSUER PURCHASES OF EQUITY SECURITIES 2023 Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 through 31 12,677 $ 76.89 — — November 1 through 30 14,445 73.48 — — December 1 through 31 8,252 88.25 — — Total 35,374 $ 78.15 — — ___________________ (1) The number of shares purchased consists of shares of common stock tendered by employees to the Company to satisfy the employees' minimum tax withholding obligations arising as a result of vesting of restricted stock grants under the Company’s 2016 Stock Incentive Plan, as amended, which shares were purchased by the Company based on their fair market value on the trading day immediately preceding the vesting date.
The comparison covers the period beginning December 31, 2017 and ending on December 31, 2022, and assumes the reinvestment of any dividends. Note that this performance is historical and is not necessarily indicative of future price performance.
The comparison covers the period beginning December 31, 2018 and ending on December 31, 2023, and assumes the reinvestment of any dividends.
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Company / Index 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 CoStar Group, Inc. $ 100.00 $ 113.60 $ 201.48 $ 311.26 $ 266.14 $ 260.25 S&P 500 Index 100.00 95.62 125.72 148.85 191.58 156.88 S&P 500 Internet Services & Infrastructure Index 100.00 91.54 123.09 142.89 163.81 126.13 36 Item 6. Reserved 37
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None of these share purchases were part of a publicly announced program to purchase common stock of the Company.
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Note that this performance is historical and is not necessarily indicative of future price performance. 35 Company / Index 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 CoStar Group, Inc. $ 100.00 $ 177.36 $ 273.99 $ 234.27 $ 229.09 $ 259.06 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 S&P 500 Internet Services & Infrastructure Index 100.00 134.46 156.09 178.95 137.79 160.76 36 Item 6.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeBusiness" in this Report. 44 Comparison of Year Ended December 31, 2022 and Year Ended December 31, 2021 The following table provides a comparison of our selected consolidated results of operations for the years ended December 31, 2022 and 2021 (in thousands): 2022 2021 Increase (Decrease) Increase (Decrease) Revenues: CoStar $ 836,980 $ 722,821 $ 114,159 16% Information services 157,382 141,655 15,727 11 Multifamily 745,388 678,680 66,708 10 LoopNet 230,941 207,511 23,430 11 Residential 73,747 74,583 (836) (1) Other Marketplaces 137,961 118,885 19,076 16 Total revenues 2,182,399 1,944,135 238,264 12 Cost of revenues 414,008 357,241 56,767 16 Gross profit 1,768,391 1,586,894 181,497 11 Operating expenses: Selling and marketing (excluding customer base amortization) 684,222 622,007 62,215 10 Software development 220,923 201,022 19,901 10 General and administrative 338,737 256,711 82,026 32 Customer base amortization 73,560 74,817 (1,257) (2) Total operating expenses 1,317,442 1,154,557 162,885 14 Income from operations 450,949 432,337 18,612 4 Interest income (expense), net 32,125 (31,621) (63,746) NM Other income, net 3,383 3,252 131 4 Income before income taxes 486,457 403,968 82,489 20 Income tax expense 117,004 111,404 5,600 5 Net income $ 369,453 $ 292,564 $ 76,889 26% __________________________ NM - Not meaningful Revenues .
Biggest changeSee Note 14 of the Notes to Consolidated Financial Statements included in Part IV of this Report for the reconciliation of our net income to our EBITDA. 43 Consolidated Results of Operations The following table provides our selected consolidated results of operations for the indicated periods (in millions and as a percentage of total revenue): Year Ended December 31, 2023 2022 2021 Revenues $ 2,455.0 100 % $ 2,182.4 100 % $ 1,944.1 100 % Cost of revenues 491.5 20 414.0 19 357.2 18 Gross profit 1,963.5 80 1,768.4 81 1,586.9 82 Operating expenses: Selling and marketing (excluding customer base amortization) 989.9 40 684.2 31 622.0 32 Software development 267.6 11 220.9 10 201.0 10 General and administrative 381.5 16 338.7 16 256.8 13 Customer base amortization 42.2 2 73.6 3 74.8 4 Total operating expenses (1) 1,681.2 68 1,317.4 60 1,154.6 59 Income from operations (1) 282.3 11 451.0 21 432.3 22 Interest income (expense), net 213.6 9 32.1 1 (31.6) (2) Other income, net 5.4 — 3.4 — 3.3 — Income before income taxes (1) 501.3 20 486.5 22 404.0 21 Income tax expense 126.6 5 117.0 5 111.4 6 Net income (1) $ 374.7 15 % $ 369.5 17 % $ 292.6 15 % __________________________ (1) Amounts may not foot due to rounding.
Because we do not acquire businesses on a predictable cycle, we do not consider the amount of acquisition- and integration-related costs to be a representative component of the day-to-day operating performance of our business. • The amount of settlement and impairment costs incurred outside of our ordinary course of business may be useful for investors to consider because they generally represent gains or losses from the settlement of litigation matters, charges 42 related to terminations of contracts or impairments of acquired intangible assets or other long lived assets.
Because we do not acquire businesses on a predictable cycle, we do not consider the amount of acquisition- and integration-related costs to be a representative component of the day-to-day operating performance of our business. • The amount of settlement and impairment costs incurred outside of our ordinary course of business may be useful for investors to consider because they generally represent gains or losses from the settlement of litigation matters, charges related to terminations of contracts or impairments of acquired intangible assets or other long lived assets.
In addition, investors, securities analysts and others have regularly relied on EBITDA and may rely on adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income or non-GAAP net income per diluted share to provide a financial measure by which to compare our operating performance against that of other companies in our industry.
In addition, investors, securities analysts and others have regularly relied on EBITDA and may rely on adjusted EBITDA, adjusted 41 EBITDA margin, non-GAAP net income or non-GAAP net income per diluted share to provide a financial measure by which to compare our operating performance against that of other companies in our industry.
The financial items that have been excluded from our net income to calculate non-GAAP net income and non-GAAP net income per diluted share are amortization of acquired intangible assets and other related costs, stock-based compensation, acquisition- and integration-related costs, restructuring and related costs and settlement and impairment costs incurred outside our ordinary course of business.
The financial items that have been excluded from our net income to calculate non-GAAP net income and non-GAAP net income per diluted share are amortization of acquired intangible assets and other related costs, stock-based compensation, acquisition- and integration-related costs, restructuring and related costs and settlement and impairment costs incurred outside 42 our ordinary course of business.
Management relies on an internal management reporting process that provides revenue and operating segment EBITDA, which is our net income before interest income (expense) and other income (expense), loss on debt extinguishment, income taxes, depreciation and amortization. Management believes that operating segment EBITDA is an appropriate measure for evaluating the operational performance of our operating segments.
Management relies on an internal management reporting process that provides revenue and operating segment EBITDA, which is our net income before interest income or expense, net, other income or expense, net, loss on debt extinguishment, income taxes, depreciation and amortization. Management believes that operating segment EBITDA is an appropriate measure for evaluating the operational performance of our operating segments.
We also believe the non-GAAP measures we disclose are measures of our ongoing operating performance because the isolation of non-cash charges, such as amortization and depreciation, and other items, such as interest (expense) income, other (expense) income, income taxes, stock-based compensation expenses, acquisition- and integration-related costs, restructuring costs, loss on debt extinguishment and settlement and impairment costs incurred outside our ordinary course of business, provides additional information about our cost structure, and, over time, helps track our operating progress.
We also believe the non-GAAP measures we disclose are measures of our ongoing operating performance because the isolation of non-cash charges, such as amortization and depreciation, and other items, such as interest income or expense, net, other income or expense, net, income taxes, stock-based compensation expenses, acquisition- and integration-related costs, restructuring costs, loss on debt extinguishment and settlement and impairment costs incurred outside our ordinary course of business, provides additional information about our cost structure, and, over time, helps track our operating progress.
We believe the disclosure of non-GAAP measures can help investors meaningfully 41 evaluate and compare our performance from quarter-to-quarter and from year-to-year without the impact of these items.
We believe the disclosure of non-GAAP measures can help investors meaningfully evaluate and compare our performance from quarter-to-quarter and from year-to-year without the impact of these items.
Failure to meet these targets, could result in a reduction of the value of the tax incentives and repayment of previous tax reductions. The value of the incentives is dependent on our expected taxable income.
Failure to meet these targets could result in a reduction of the value of the tax incentives and repayment of previous tax reductions. The value of the incentives is dependent on our taxable income.
Development, Investments and Expansion We plan to continue to invest in our business and our services, evaluate strategic growth opportunities and pursue our key priorities as described below.
Development, Investments and Expansion 39 We plan to continue to invest in our business and our services, evaluate strategic growth opportunities and pursue our key priorities as described below.
However, we do not consider the amount of interest (expense) income and other (expense) income to be a representative component of the day-to-day operating performance of our business. • Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business.
However, we do not consider the amount of interest income or expense, net and other income or expense, net to be a representative component of the day-to-day operating performance of our business. • Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business.
We expect the total cost of construction, net of the estimated value of the tax incentives from 2023 to 2032, to be in the range of $450 – $550 million. We have engaged a project manager, architects and a general contractor on terms that generally require payments as services are provided or construction is performed.
We expect the total cost of construction, net of the estimated value of the tax incentives from 2023 to 2032, to be in the range of $450 – $600 million. We have engaged a project manager, architects and a general contractor on terms that generally require payments as services are provided or construction is performed.
Comparison of Business Segment Results for Year Ended December 31, 2022 and Year Ended December 31, 2021 We manage our business geographically in two operating segments, with the primary areas of measurement and decision-making being North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific and Latin America.
Comparison of Business Segment Results for Year Ended December 31, 2023 and Year Ended December 31, 2022 We manage our business geographically in two operating segments, with the primary areas of measurement and decision-making being North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific and Latin America.
We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure. • The amount of interest (expense) income and other (expense) income we generate and incur may be useful for investors to consider and may result in current cash inflows and outflows.
We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure. • The amount of interest income or expense, net and other income or expense, net we generate and incur may be useful for investors to consider and may result in current cash inflows and outflows.
For an in-depth discussion of each of our significant accounting policies, including our critical accounting policies and further information regarding estimates and assumptions involved in their application, see Note 2 of the Notes to the Consolidated Financial Statements included in this Report.
For an in-depth discussion of each of our significant accounting policies, including our critical accounting policies and further information regarding estimates and assumptions involved in their application, see Note 2 of the Notes to the Consolidated Financial Statements included in Part IV of this Report.
There have been no events or changes in circumstances as a result of our qualitative impairment analysis on October 1, 2022, that would indicate that the carrying value of each reporting unit may not be recoverable.
There have been no events or changes in circumstances as a result of our qualitative impairment analysis on October 1, 2023, that would indicate that the carrying value of each reporting unit may not be recoverable.
The non-GAAP financial measures that we may disclose include EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income and non-GAAP net income per diluted share. EBITDA is our net income before interest (expense) income, other (expense) income, loss on debt extinguishment, income taxes, depreciation and amortization.
The non-GAAP financial measures that we may disclose include EBITDA, adjusted EBITDA, adjusted EBITDA margin, 40 non-GAAP net income and non-GAAP net income per diluted share. EBITDA is our net income before interest income or expense, net, other income or expense, net, loss on debt extinguishment, income taxes, depreciation and amortization.
The increase in the percentage of our revenue from subscription-based contracts for contracts with a term of at least one year from 2021 to 2022 was due to increases in sales of longer term advertising products.
The increase in the percentage of our revenue from subscription-based contracts for contracts with a term of at least one year from 2022 to 2023 was due to increases in sales of longer term advertising products.
Net new bookings is considered a key indicator of future subscription revenue growth and is also used as a metric of sales force productivity by us and investors. However, information regarding net new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time.
Net new bookings is considered an operating metric that is an indicator of future subscription revenue growth and is also used as a metric of sales force productivity by us and investors. However, information regarding net new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time.
Our material cash requirements include the following contractual and other obligations. Debt. As of December 31, 2022, we had outstanding an aggregate principal amount of $1.0 billion of Senior Notes due July 15, 2030. Future interest payments associated with the Senior Notes are $224 million, with $28 million payable within 12 months. Leases.
Our material cash requirements include the following contractual and other obligations. Debt. As of December 31, 2023, we had outstanding an aggregate principal amount of $1.0 billion of Senior Notes due July 15, 2030. Future interest payments associated with the Senior Notes are $196.0 million, with $28.0 million payable within 12 months. Leases.
Our contract renewal rate is a quantitative measurement that is typically closely correlated with our reve nue results. As a result, we believe that the rate may be a reliable indicator of short-term and long-term performance absent extraordinary circumstances.
Our contract renewal rate is a quantitative measurement that is typically closely correlated with our revenue results. As a result, we believe that the rate may be a reliable indicator of short-term and long-term performance absent extraordinary circumstances.
Liquidity and Capital Resources We believe the balance of cash and cash equivalents, which was $5.0 billion as of December 31, 2022, along with cash generated by ongoing operations and continued access to capital markets, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.
Liquidity and Capital Resources We believe the balance of cash and cash equivalents, which was $5.2 billion as of December 31, 2023, along with cash generated by ongoing operations and continued access to capital markets, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.
Business" in this Report. Non-GAAP Financial Measures We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. We also disclose and discuss certain non-GAAP financial measures in our public releases, investor conference calls and filings with the SEC.
Non-GAAP Financial Measures We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. We also disclose and discuss certain non-GAAP financial measures in our public releases, investor conference calls and filings with the SEC.
We have lease arrangements for office facilities, data centers and certain vehicles. As of December 31, 2022, we had fixed lease payment obligations of $118 million, with $39 million payable within 12 months. Purchase Obligations.
We have lease arrangements for office facilities, data centers and certain vehicles. As of December 31, 2023, we had fixed lease payment obligations of $110 million, with $39 million payable within 12 months. Purchase Obligations.
Judgments made by management relate to the expected useful lives of long-lived assets and our ability to recover the carrying value of such assets.
Judgments made by management relate to the expected useful lives of intangible assets and our ability to recover the carrying value of such assets.
When we determine that the carrying value of long-lived and identifiable intangible assets may not be recovered based upon the existence of one or more of the above indicators, we test for impairment.
When we determine that the carrying value of intangible assets may not be recovered based upon the existence of one or more of the above indicators, we test for impairment.
Revenue from our subscription-based contracts with a term of at least one year was approximately 80%, 77% and 80% of total revenue for the trailing 12 months ended December 31, 2022, 2021 and 2020, respectively.
Revenue from our subscription-based contracts with a term of at least one year were approximately 82%, 80% and 77% of total revenue for the trailing 12 months ended December 31, 2023, 2022 and 2021, respectively.
To date, we have grown in part by acquiring other companies, and we expect to continue to make acquisitions. 47 Cash and cash equivalents increased to $5.0 billion as of December 31, 2022, compared to cash and cash equivalents of $3.8 billion as of December 31, 2021.
To date, we have grown in part by acquiring other companies, and we expect to continue to make acquisitions. Cash and cash equivalents increased to $5.2 billion as of December 31, 2023, compared to cash and cash equivalents of $5.0 billion as of December 31, 2022.
In 2022 and 2021, we assumed a 26% and 25% tax rate, respectively, which approximated our historical long-term statutory corporate tax rate, excluding the impact of discrete items.
In both 2023 and 2022, we assumed a 26% tax rate, which approximated our historical long-term statutory corporate tax rate, excluding the impact of discrete items.
For a comparison of our business segment results of operations for the fiscal year ended December 31, 2021 to the year ended December 31, 2020, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Report for the year ended December 31, 2021, which was filed with the SEC on February 23, 2022.
For a comparison of our business segment results of operations for the fiscal year ended December 31, 2022 to the year ended December 31, 2021, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 22, 2023.
As of December 31, 2022, we have paid $17 million and we have committed to spend an additional $148 million as further work is performed under these contracts. We plan to amend these contracts to include additional commitments as construction progresses. Total cash expenditures for 2023 are expected to be approximately $200 million.
As of December 31, 2023, we have paid $128 million and we have committed to spend an additional $437 million as further work is performed under these contracts. We plan to amend these contracts to include additional commitments as construction progresses. Total cash expenditures for 2024 are expected to be approximately $385 million.
The services acquired under these agreements primarily relate to web hosting, third-party data or listings and software subscriptions. As of December 31, 2022, we had purchase obligations of $85 million, with $45 million payable within 12 months. Construction Commitments .
The services acquired under these agreements primarily relate to web hosting, sponsorship agreements, third-party data or listings and software subscriptions. As of December 31, 2023, we had purchase obligations of $264 million, with $81 million payable within 12 months. 47 Construction Commitments.
For the trailing 12 months ended December 31, 2022, 2021 and 2020, our contract renewal rates for existing CoStar Group company-wide subscription-based services for contracts with a term of at least one year were approximately 90%, 92% and 89%, respectively; and, therefore, our cancellation rates for those services for the same periods were approximately 10%, 8% and 11%, respectively.
For the trailing 12 months ended December 31, 2023, 2022 and 2021, our contract renewal rates for subscription-based services for contracts with a term of at least one year were approximately 90%, 90% and 92%, respectively; and, therefore, our cancellation rates for those services for the same periods were approximately 10%, 10% and 8%, respectively.
For a comparison of our results of operations for the fiscal year ended December 31, 2021 to the year ended December 31, 2020, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Report for the year ended December 31, 2021, which was filed with the SEC on February 23, 2022.
For a comparison of our results of operations for the fiscal year ended December 31, 2022 to the year ended December 31, 2021, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on the Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 22, 2023.
We do not consider the amount of restructuring related costs to be a representative component of the day-to-day operating performance of our business.
Because we do not carry out restructuring activities on a predictable cycle, we do not consider the amount of restructuring related costs to be a representative component of the day-to-day operating performance of our business.
As of October 1, 2022, we performed an assessment of the relevant qualitative factors for our North America and International reporting units and concluded that it was not more likely than not that the fair value of each reporting unit was less 49 than its respective carrying amounts.
As of October 1, 2023, we assessed the relevant qualitative factors for our North America reporting unit and concluded that it was not more likely than not that the fair value of this reporting unit was less than its respective carrying amounts.
With respect to our accounting policy for long-lived assets, intangible assets and goodwill, we further supplement in Note 2 of the Notes to the Consolidated Financial Statements included in this Report with the following: We assess the impairment of long-lived assets, identifiable intangibles and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
We consider policies relating to the following matters to be critical accounting policies: • Intangible assets and goodwill; • Income taxes; • Revenue recognition; and • Business combinations. 48 With respect to our accounting policy for intangible assets and goodwill, we further supplement in Note 2 of the Notes to the Consolidated Financial Statements included in Part IV of this Report with the following: We assess the impairment of identifiable intangibles and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Any development efforts must comply with our credit facility, which contains restrictive covenants that restrict our operations and use of our cash flow and may prevent us from taking certain actions that we believe could increase our profitability or otherwise enhance our business. 40 For further discussion of our Company, strategy and products, see our business overview set forth in "Item 1.
Any development efforts must comply with our credit facility, which contains restrictive covenants that restrict our operations and use of our cash flow and may prevent us from taking certain actions that we believe could increase our profitability or otherwise enhance our business.
These activities may result in reduced demand for office space and rising interest rates may reduce demand for all types of real estate. If the demand for office space or other real estate decreases significantly, there could be a downturn in the commercial real estate market that may materially adversely affect many of our clients.
If the demand for office space or other real estate decreases significantly, there could be a downturn in the commercial real estate market that may materially adversely affect many of our clients.
The decrease in the percentage of our revenue from subscription-based contracts with a term of at least one year from 2020 to 2021 was primarily due to the acquisitions of companies that contained a higher percentage of transaction-based revenue than our legacy businesses, as well as increases in sales of shorter term advertising products. 39 Impacts of Current Economic Conditions In response to the concerns over inflation risk, the U.S.
The decrease in the percentage of our revenue from subscription-based contracts with a term of at least one year from 2023 to 2022 was primarily due to the acquisitions of companies that contained a higher percentage of transaction-based revenue than our legacy businesses, as well as increases in sales of shorter term advertising products.
Commercial real estate agents, buyers and tenants use the LoopNet network of online marketplace services to search for available property listings that meet their criteria. LoopNet's revenue growth rates slowed in 2022 when compared to 2021 as growth in the average price per listing declined in 2022 when compared to 2021.
Commercial real estate agents, buyers and tenants use the LoopNet network of online marketplace services to search for available property listings that meet their criteria. LoopNet's revenue growth rate for the year ended December 31, 2023 accelerated compared to the year ended December 31, 2022, due to an increase in the average price per listing.
The increase in North America EBITDA was primarily due to an increase in revenue and a decrease in marketing costs, partially offset by increases in general and administrative and personnel costs. International EBITDA decreased to $5 million for the year ended December 31, 2022 from $8 million for the year ended December 31, 2021.
International EBITDA decreased to a loss of $13 million for the year ended December 31, 2023 from $5 million for the year ended December 31, 2022. The decrease was due to increased personnel costs, partially offset by, an increase in revenue.
We plan to expand our Richmond, Virginia campus which is expected to result in a material cash requirement in 2023 and beyond. We broke ground on the expansion in November 2022 and expect construction to be completed in 2025.
We are expanding our Richmond, Virginia campus, which is expected to result in material cash requirements in 2024 and beyond. We broke ground on the expansion in November 2022 and expect construction to be substantially completed in the first half of 2026.
We expect Multifamily's year-over-year revenue growth rate for 2023 to accelerate compared to the revenue growth rate for 2022 due to expected increases in sales levels from bringing additional properties on the network. 38 LoopNet Our LoopNet network of commercial real estate websites offer subscription-based, online marketplace services that enable commercial property owners, landlords and real estate agents working on their behalf to advertise properties for sale or for lease and to submit detailed information about property listings.
LoopNet Our LoopNet network of commercial real estate websites offer subscription-based, online marketplace services that enable commercial property owners, landlords and real estate agents working on their behalf to advertise properties for sale or for lease and to submit detailed information about property listings.
Revenue from our subscription-based contracts was approximately 93%, 93% and 95% of total revenue for the years ended December 31, 2022, 2021 and 2020, respectively. The declines in the percentage of our revenue from subscription-based contracts from 2020 to 2021 was primarily due to the acquisitions of companies that contained a higher percentage of transaction-based revenue than our legacy businesses.
Revenue from our subscription-based contracts were approximately 95%, 93% and 93% of total revenue for the years ended December 31, 2023, 2022 and 2021, respectively. The increase in the percentage of our revenue from subscription-based contracts from 2022 to 2023 was primarily due to the growth in our subscription-based services.
Subscription-based Services The majority of our revenue is generated from service offerings that are distributed to our clients under subscription-based agreements that typically renew automatically and have a term of at least one year. We recognize subscription revenues on a straight-line basis over the life of the contract.
We expect other marketplaces' revenues for the year ending December 31, 2024 to be consistent with the revenues for the year ended December 31, 2023. Subscription-based Services The majority of our revenue is generated from service offerings that are distributed to our clients under subscription-based agreements that typically renew automatically and have a term of at least one year.
We expect to fund the expansion with cash on hand. Our future capital requirements will depend on many factors, including, among others, our operating results, expansion and integration efforts and our level of acquisition activity or other strategic transactions.
These transactions totaled $340.0 million, inclusive of property taxes, titling insurance and other transaction costs and were paid with cash on hand. Our future capital requirements will depend on many factors, including, among others, our operating results, expansion and integration efforts and our level of acquisition activity or other strategic transactions.
As permitted under the Coronavirus Aid, Relief and Economic Security Act, we deferred payroll taxes due in 2020; all amounts deferred were paid during the year ended December 31, 2021. 48 Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported.
Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported.
The increase in cash provided by financing activities was primarily due to $746 million of net proceeds from our September 2022 equity offering.
Net cash used in financing activities for the year ended December 31, 2023 was $3.7 million compared to net cash provided by financing activities of $734.0 million for the year ended December 31, 2022. The change was primarily due to $745.7 million of net proceeds from our September 2022 equity offering.
Customer Base Amortization Expense. Customer base amortization expense decreased to $74 million in 2022, from $75 million in 2021, and decreased as a percentage of revenues at 3% in 2022 from 4% in 2021.
Customer Base Amortization Expense . Customer base amortization expense decreased $31 million, or 42.7%, to $42 million and, as a percentage of revenues, decreased from 3% to 2%.
The decrease in customer base amortization expense was primarily attributable to decreases in amortization expense related to the customer base intangible assets acquired in the acquisitions of ForRent, Ten-X, STR and LoopNet, which had been amortizing on an accelerated basis since their acquisitions, partially offset by an increase of $13 million in amortization expense driven by intangible assets related to a Homesnap product for which we decided to eliminate usage fees related to a specific customer class.
The decrease was primarily attributable to acceleration of amortization of $16 million related to eliminating certain usage fees for agent access to the Homesnap product recorded in 2022, as well as a reduction in amortization expense related to customer base assets acquired in the acquisitions of LoopNet, ForRent and Ten-X, which have been amortizing on an accelerated basis since the respective acquisitions.
We review these estimates and assumptions periodically and reflect the effects of revisions in the period that they are determined to be necessary. We consider policies relating to the following matters to be critical accounting policies: • Long-lived assets, intangible assets and goodwill; • Income taxes; • Revenue recognition; and • Business combinations.
We review these estimates and assumptions periodically and reflect the effects of revisions in the period that they are determined to be necessary.
Net cash used in investing activities for the year ended December 31, 2022 was $69 million compared to $381 million for the year ended December 31, 2021.
The $10.8 million increase was primarily due to higher net income, excluding certain non-cash expenses. Net cash used in investing activities for the year ended December 31, 2023 was $238.6 million compared to $69.1 million for the year ended December 31, 2022.
The increase in cash and cash equivalents for the year ended December 31, 2022 was primarily due to $746 million of net proceeds from our September 2022 equity offering and cash flow from operations of $479 million.
The increase in cash and cash equivalents for the year ended December 31, 2023 was primarily due to cash flow from operations of $489.5 million, partially offset by spending on capital assets Net cash provided by operating activities for the year ended December 31, 2023 was $489.5 million compared to $478.7 million for the year ended December 31, 2022.
For the years ended December 31, 2022, 2021 and 2020, our annualized net new bookings of subscription-based services on all contracts were approximately $305 million, $217 million and $184 million, respectively, calculated based on the annualized amount of change in our sales resulting from all new subscription-based contracts or upgrades on all existing subscription-based contracts, less write-downs and cancellations, for the period reported.
We recognize subscription revenues on a straight-line basis over the life of the contract. For the years ended December 31, 2023, 2022 and 2021, our annualized net new bookings of subscription-based services on all contracts were approximately $286 million, $305 million and $217 million, respectively.
The CoStar revenue increase was due to higher sales volume driven by the impact of annual price increases and customer upgrades on contract renewals, as well as, an increase in subscribers. Multifamily revenues increased $67 million, or 10%, primarily due to increases in pricing on renewals and, to a lesser extent, an increase in properties listed.
International revenues increased $13 million, or 16.9%, to $89 million and primarily included: • an increase in Information services revenues of $6 million, or 18.8%, primarily attributable to an increase in revenues for STR of $4 million and $2 million of revenue related to the Business Immo Acquisition, • an increase in CoStar revenues of $2 million, or 6.5%, due to higher sales volume driven by the impact of annual price increases and customer upgrades on contract renewals, as well as an increase in subscribers, • an increase in LoopNet revenues of $2 million, or 30.6%, due to an increase in the average price for listings and • $2 million of revenue related to the OnTheMarket Acquisition.
General and administrative expenses increased to $339 million in 2022, from $257 million in 2021, and increased as a percentage of revenues to 16% in 2022 from 13% in 2021.
General and administrative expenses increased $43 million, or 12.6%, to $382 million and, as a percentage of revenues, was consistent at 16%.
Interest Income (Expense), net. Interest income, net was $32 million in 2022, as compared to interest expense, net of $32 million in 2021. The increase of $64 million in 2022 was primarily due to an increased rate of return on cash and cash equivalents. Other Income, net.
Interest Income, Net . Interest income, net increased $182 million, or 565.4%, to $214 million due to an increase in interest earned on our cash equivalents. Other Income, Net . Other income, net was insignificant for both the years ended December 31, 2023, and 2022. Income Tax Expense .
The $312 million decrease in cash used in investing activities was primarily due to a decrease in cash paid for acquisitions of $187 million and for purchases of property, equipment and other assets including Richmond assets of $95 million, as well as, an increase in proceeds from sale of property and equipment and other assets of $29 million Net cash provided by financing activities for the year ended December 31, 2022 was $734 million compared to net cash used in financing activities of $16 million for the year ended December 31, 2021.
The change was primarily due to an increase in cash paid for acquisitions of $93.3 million, increased spending for the Richmond campus of $82.3 million, and a decrease in proceeds from sale of property and equipment and other assets of $30.1 million.
Homes.com is a homes for sale listings site. Homesnap is an online and mobile software platform that provides residential real estate professionals access to applications that manage residential real estate agent workflow and marketing campaigns delivered on third-party platforms. Homesnap also receives transaction-based revenue for short-term advertising delivered on third-party platforms. Residential revenue was consistent between 2022 and 2021.
Homes.com provides residential real estate professionals subscription-based access to applications that manage residential real estate agent workflow and receives transaction-based revenue for marketing campaigns delivered on third-party platforms. In February 2024, we began selling subscription memberships to promote the home listing as well as the agent in the sort order.
We expect our investment in these priorities, and the full-year impact realized in 2023 from an increase in our sales force which occurred primarily in the second half of 2022, will increase our selling and marketing expense and reduce our income from operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
We expect our investment in these priorities will increase our research, selling and marketing and facilities expenses, including potential impairments of assets associated with the acquired building. Each of these will reduce our net income and may reduce our cash on hand for the year ending December 31, 2024 compared to the year ended December 31, 2023.
EBITDA is used by management to internally measure operating and management performance and to evaluate the performance of the business. However, this measure should be considered in addition to, not as a substitute for or superior to, income from operations or other measures of financial performance prepared in accordance with GAAP. Segment Revenues .
EBITDA is used by management to internally measure operating and management performance and to evaluate the performance of our business. Segment Revenues .
It is currently unclear how the commercial real estate industry will ultimately be impacted by the COVID-19 pandemic as businesses formulate and execute plans for employees to return to the office, implement hybrid work arrangements – allowing work from the office or home, or switch to all work from home, or by the current economic conditions.
It is currently unclear how the commercial real estate industry will ultimately be impacted by the current economic conditions. Rising interest rates or a period of elevated interest rates may reduce demand for all types of real estate.
Prior period amounts have been adjusted to reflect this presentation. (2) For further discussion of our Company, strategy and products, see our business overview set forth in "Item 1.
For further discussion of our Company, strategy and products, see our business overview set forth in "Item 1. Business" in this Report. Impacts of Current Economic Conditions In response to the concerns over inflation risk, the U.S. Federal Reserve raised interest rates over the past two years.
We expect residential revenue for 2023 to decrease when compared to 2022 due to the discontinuation of certain non-strategic products and services. Other Marketplaces Our other marketplaces include Ten-X, an online auction platform for commercial real estate that was acquired on June 24, 2020.
We expect Residential's revenues for the year ending December 31, 2024 to increase compared to the year ended December 31, 2023 due to the OnTheMarket Acquisition and the launch of our new Homes.com product. Other Marketplaces Our other marketplaces include Ten-X, an online auction platform for commercial real estate and our BizBuySell and Land.com networks.
This network also earns transaction-based revenue primarily from providing online tenant applications, including background and credit checks, and rental payment processing. Multifamily's year-over-year revenue growth rate for 2022 slowed compared to 2021 due to customers selecting lower-priced ad packages in the second half of 2021 while rental vacancy rates declined relative to historical averages reducing demand for top-level packages.
This network also earns transaction-based revenue primarily from providing online tenant applications, including background and credit checks, and rental payment processing.
Information Services' year-over-year revenue growth rate for 2022 accelerated compared to 2021 as a result of increased revenue from CoStar Real Estate Manager services and the results of the Business Immo acquisition. We expect Information Services' revenue growth rate for 2023 to slow compared to the revenue growth rate for 2022 as a result of lower price adjustments.
We expect Information Services' revenue growth rate for the year ending December 31, 2024 to slow compared to the revenue growth rate for the year ended December 31, 2023 as a result of transitioning legacy STR customers to our new CoStar based benchmarking product.
The increase in gross profit was due to higher revenue, partially offset by an increase in cost of revenues of $57 million, or 16%, mostly due to an increase of $28 million related to our investment and further development of our residential marketplaces, including personnel, research equipment, software and equipment, and data and content costs.
Gross Profit and Cost of Revenues. Gross profit increased $195 million, or 11.0%, to $2.0 billion in 2023, and the gross profit percentage decreased from 81% to 80%. The increase in gross profit was due to higher revenues partially offset by an increase in the cost of revenues.
CoStar revenues increased $113 million due to higher sales volume driven by the impact of annual price increases and customer upgrades on contract renewals, as well as an increase in subscribers. 46 Multifamily revenues increased $67 million, primarily due to increases in pricing on renewals and, to a lesser extent, an increase in properties listed.
North America revenues increased $260 million, or 12.3%, to $2.4 billion and included: 46 • an increase in CoStar revenues of $86 million, or 10.7%, due to higher sales volume driven by the impact of annual price increases and customer upgrades on contract renewals, as well as an increase in subscribers, • an increase in Information services revenues of $7 million, or 5.9%, primarily attributable to an increase in revenues for CoStar Real Estate Manager of $5 million and STR of $3 million, • an increase in Multifamily revenues of $169 million, or 22.7%, due to higher sales volume driven by increases in pricing on renewals and an increase in the number of properties listed on our network, • an increase in LoopNet revenues of $32 million, or 14.2%, due to an increase in the average price for listings, • a decrease in Residential revenues of $30 million, or 40.4%, due to the discontinuation of certain products and services that were inconsistent with our long-term business strategy and • a decrease in Other marketplaces revenues of $4 million, or 3.0%, due to the lower property volumes auctioned on Ten-X partially offset by increases in revenue of Land.com..
Removed
CoStar's year-over-year revenue growth rate for 2022 accelerated compared to 2021. The number of subscribers has increased year-over-year and we have also realized the impact of price increases and existing customers upgrading to our global service offering.
Added
CoStar's revenue growth rate for the year ended December 31, 2023 slowed compared to the year ended December 31, 2022.
Removed
We expect CoStar's revenue growth rate for 2023 to slow compared to the revenue growth rate for 2022 as a result of less benefit from customer upgrades as the global product upgrade campaign is substantially complete and lower inflation-based price adjustments.
Added
We expect CoStar's revenue growth rate for the year ending December 31, 2024 to be consistent with the revenue growth rate for the year ended December 31, 2023 primarily due to converting legacy STR customers to our new CoStar based benchmarking product offsetting lower inflation-based price adjustments.
Removed
Quarterly sales of multifamily products increased over 2022 due to new properties being added to the network and the impact of a new pricing strategy implemented to align prices at each product level with the value of the leads delivered.
Added
Information Services revenue growth rate for the year ended December 31, 2023 slowed compared to the year ended December 31, 2022.
Removed
We expect LoopNet's year-over-year revenue growth rate for 2023 to accelerate compared to the revenue growth rate for 2022 due to expected increases in sales levels from increasing the number of listings in the network. Residential The acquisitions of Homes.com and Homesnap enabled us to expand our offerings to the residential for sale market.
Added
Multifamily's revenue growth rate for the year ended December 31, 2023 accelerated compared to the year ended December 31, 2022 as a result of higher sales volumes driven by increases in pricing on renewals and an increase in the number of properties listed on our network.
Removed
Also included is our BizBuySell network, which includes BizQuest ® and FindaFranchise and our Land.com Network of sites. The BizBuySell network provides online marketplaces for businesses and franchises for sale and our Land.com Network provides online marketplaces for rural lands for sale.
Added
We expect Multifamily's revenue growth rate for the year ending December 31, 2024 to moderate compared to the revenue growth rate for the year ended December 31, 2023 due to lower inflation-based price adjustments.
Removed
Overall, other marketplaces' revenue growth rate slowed in 2022 compared to 2021 primarily due to the impact of the Ten-X acquisition closing in June 2020.We expect other marketplaces revenue growth rate for 2023 to slow compared to the growth rate for 2022 due to lower Ten-X transaction revenue.
Added
We expect LoopNet's revenue growth rate for the year ending December 31, 2024 to 38 slow compared to the revenue growth rate for the year ended December 31, 2023 as a result of disruptions related to transitioning sales and service activities to a dedicated LoopNet field sales team.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOn July 1, 2020, we entered into the 2020 Credit Agreement, which provides for variable rate borrowings of up to $750 million. On July 1, 2020, we issued $1.0 billion aggregate principal amount of Senior Notes.
Biggest changeWe are subject to interest rate market risk in connection with our revolving credit facility. On July 1, 2020, we entered into the 2020 Credit Agreement, which provides for variable rate borrowings of up to $750 million. On July 1, 2020, we issued $1.0 billion aggregate principal amount of Senior Notes.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We provide information, analytics and online marketplace services to commercial real estate and related business communities within the regions where we operate which primarily include, North America, Europe, Asia-Pacific and Latin America.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We provide information, analytics and online marketplace services to commercial real estate and related business communities within the regions where we operate which primarily include, North America, Europe, Asia-Pacific and Latin 49 America.
Changes in interest rates would not have a material impact to our current interest and debt financing expense, as all of our borrowings except for our credit facility are fixed rate, and no amounts were outstanding under our credit facility as of December 31, 2022.
Changes in interest rates would not have a material impact to our current interest and debt financing expense, as all of our borrowings except for our credit facility are fixed rate, and no amounts were outstanding under our credit facility as of December 31, 2023.
As of December 31, 2022, we believe our intangible assets will be recoverable; however, changes in the economy, the business in which we operate and our own relative performance could change the assumptions used to evaluate intangible asset recoverability.
As of December 31, 2023, we believe our intangible assets will be recoverable; however, changes in the economy, the business in which we operate and our own relative performance could change the assumptions used to evaluate intangible asset recoverability.
For the years ended December 31, 2022 and December 31, 2021, our revenues would have increased by approximately $8 million and $7 million, respectively, if the U.S. dollar exchange rate used weakened by 10%. Fluctuations in the exchange rates of revenues denominated in any other foreign currencies would have had an immaterial impact on our consolidated results.
For the years ended December 31, 2023 and December 31, 2022, our revenues would have increased by approximately 4% and $8 million, respectively, if the U.S. dollar exchange rate used weakened by 10%. Fluctuations in the exchange rates of revenues denominated in any other foreign currencies would have had an immaterial impact on our consolidated results.
For the years ended December 31, 2022 and December 31, 2021, revenues denominated in foreign currencies were approximately 4% and 4%, respectively, of total revenue. For the years ended December 31, 2022 and December 31, 2021, our revenues would have decreased by approximately $8 million and $7 million, respectively, if the U.S. dollar exchange rate used strengthened by 10%.
For both the years ended December 31, 2023 and December 31, 2022, revenues denominated in foreign currencies were approximately 4%, of total revenue. For the years ended December 31, 2023 and December 31, 2022, our revenues would have decreased by approximately $10 million and $8 million, respectively, if the U.S. dollar exchange rate used strengthened by 10%.
See Note 11 of the Notes to the Consolidated Financial Statements included in this Report for additional information regarding our 2020 Credit Agreement. We had approximately $2.6 billion of goodwill and intangible assets as of December 31, 2022.
See Note 11 of the Notes to the Consolidated Financial Statements included in this Report for additional information regarding our 2020 Credit Agreement. We had approximately $2.7 billion of goodwill and intangible assets as of December 31, 2023.
We may seek to enter into hedging transactions in the future to reduce our exposure to exchange rate fluctuations, but we may be unable to enter into hedging transactions successfully, on acceptable terms or at all. As of December 31, 2022, accumulated other comprehensive loss included a loss from foreign currency translation adjustments of approximately $29.1 million.
We may seek to enter into hedging transactions in the future to reduce our exposure to exchange rate fluctuations, but we may be unable to enter into hedging transactions successfully, on acceptable terms or at all. As of December 31, 2023, accumulated other comprehensive loss included a loss from foreign currency translation adjustments of approximately $17.6 million.
We do not believe we have material exposure to market risks associated with changes in interest rates related to cash equivalent securities held as of December 31, 2022. As of December 31, 2022, we had $5.0 billion of cash and cash equivalents.
We do not believe we have material exposure to market risks associated with changes in interest rates related to cash equivalent securities held as of December 31, 2023. As of December 31, 2023, we had of cash and cash equivalents.
If there is an increase or decrease in interest rates, there will be a corresponding increase or decrease in the amount of interest earned on our cash and cash equivalents. We currently diversify our cash and cash equivalents holdings amongst multiple financial institutions. We are subject to interest rate market risk in connection with our revolving credit facility.
If there is an increase or decrease in interest rates, there will be a corresponding increase or decrease in the amount of interest earned on our cash and cash equivalents. We currently diversify our cash and cash equivalents holdings amongst multiple financial institutions and AAA-rated Government and Treasury Money Market Funds.

Other CSGP 10-K year-over-year comparisons