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What changed in CoStar Group's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CoStar Group's 2023 and 2024 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 2024 report.

+361 added−415 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in CoStar Group's 2024 10-K

361 paragraphs added · 415 removed · 245 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

44 edited+23 added−105 removed16 unchanged
Biggest changeOur primary marketing methods include: in person and virtual service demonstrations; targeted paid digital marketing; retargeting and social media marketing; direct marketing, such as email; communication via our corporate website, campaign-specific websites and news services; participation in virtual trade shows and industry events; Company-sponsored events; client referrals; content marketing including webinars, seminars and white papers and other product-specific company newsletters distributed via email to our clients and prospects.
Biggest changeOur marketing methods include in-person and virtual demonstrations, targeted digital marketing, social media, direct marketing, corporate and campaign-specific websites, earned media, trade shows, company events, client referrals, and content marketing. Digital and direct marketing, including SEO, paid advertising, social media, and display advertising, help us find prospective clients. Service demonstrations are our most effective sales method.
Item 1. Business In this Report, the words “we,” “our,” “us,” “CoStar Group” or the “Company” refer to CoStar Group, Inc. and its direct and indirect wholly owned subsidiaries. This Report also refers to our websites, but information contained on those sites is not part of this Report.
Item 1. Business In this Report, the words “we,” “our,” “us,” “CoStar Group,” or the “Company” refer to CoStar Group, Inc. and its direct and indirect wholly owned subsidiaries. This Report also refers to our websites, but information contained on those sites is not part of this Report.
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.
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 proactively report available space and transactions through our online tool, which we refer to as our Marketing Center, or directly to our researchers.
Additional benefits include paid time off, parental bonding leave, college savings benefits, tuition reimbursement, company-subsidized commuter benefits and access to mental health, tax, and legal services. Available Information Our investor relations internet website is http://www.costargroup.com/investors.
Additional benefits include paid time off, parental bonding leave, college savings benefits, tuition reimbursement, company-subsidized commuter benefits, and access to mental health, tax, and legal services. 14 Available Information Our investor relations internet website is http://www.costargroup.com/investors.
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.
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. 13 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 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 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.
This highly complex database is comprised of hundreds of data fields, tracking such categories as location, site and zoning information, building characteristics, space and unit characteristics and availability, tax assessments, true ownership, sales and lease comparables, multi-family rents, vacancies and concessions, space requirements, retail locations, mortgage and deed information, for-sale and for-lease listings, fund data, income and expense histories, tenant names, tenant credit scores, view of company locations, lease expirations, contact information, historical trends, forecasts and demographic information.
This highly complex database is comprised of hundreds of data fields, tracking such categories as location, site and zoning information, building characteristics, space and unit characteristics and availability, tax assessments, true ownership, sales and lease comparables, residential rents, vacancies and concessions, space requirements, retail locations, mortgage and deed information, for-sale and for-lease listings, fund data, income and expense histories, tenant names, tenant credit scores, view of company locations, lease expirations, contact information, historical trends, forecasts, and demographic information.
Insights and results gathered from the survey are shared with our leadership, managers and employees and help to inform our human resources program strategy each year. We believe that diverse teams deliver better and more innovative solutions.
Insights and results gathered from the survey are shared with our leadership, managers, and employees and inform our human resources program strategy each year. We believe that diverse teams deliver better and more innovative solutions.
As is common with many German companies, employees in our German subsidiary, Thomas Daily GmbH, have elected five fellow employees to form a Works Council, which represents our employees at the location. The Works Council has certain co-determination rights and rights to receive information from us and engage us in discussions under applicable law.
As is common with many German companies, employees in our German subsidiary, Thomas Daily GmbH, have elected four fellow employees to form a Works Council (Betriebsrat), which represents our employees at the location. The Works Council has certain co-determination rights and rights to receive information from us and engage us in discussions under applicable law.
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.
Revenues, significant expenses, EBITDA, and total assets and liabilities for each of our segments are set forth in Notes 2, 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 currently have six patents in Canada, which expire in 2033 (1 patent), 2035 (2 patents) and 2036 (3 patents), covering, among other things, certain features of our field research methodologies and user interface features, and 12 patents in the U.S. which expire in, 2025 (1 patent), 2032 (2 patents), 2036 (4 patents), 2037 (4 patents) and 2038 (1 patent), covering, among other things, certain features of our field research methodologies and user interface feature.
We currently have seven patents in Canada, which expire in 2033 (1 patent), 2035 (2 patents), and 2036 (4 patents), covering, among other things, certain features of our field research methodologies and user interface features, and 12 patents in the U.S. which expire in 2025 (1 patent), 2032 (2 patents), 2036 (4 patents), 2037 (4 patents), and 2038 (1 patent), covering, among other things, certain features of our field research methodologies and user interface feature.
Multifamily Apartments.com, the flagship brand of our network of apartment marketing sites, provides a variety of ad packages and enhancements that allow property managers and owners to fully showcase their apartment community through increased exposure and interactions that allow renters to view, engage and connect with the community.
Multifamily Apartments.com, the flagship brand of our network of apartment marketing sites, provides a variety of subscription-based ad packages and enhancements that allow property managers and owners to showcase their apartment community through increased exposure and interactions that allow renters to view, engage, and connect with the community.
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
The SEC maintains an internet site that contains reports, proxy statements, information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. 15
We have created and compiled a standardized platform of information, analytics and online marketplace services where industry professionals and consumers of commercial real estate, including apartments, and the related business communities, can continuously interact and facilitate transactions by efficiently accessing and exchanging accurate and standardized real estate-related information.
We have created and compiled a standardized platform of online marketplace services, information, and analytics where industry professionals, consumers of real estate, and the related business communities can continuously interact and facilitate transactions by efficiently accessing and exchanging accurate and standardized real estate-related information.
As markets for information, analytics and online marketplaces develop, additional competitors (including companies that could have greater access to data, financial, product development, technical, analytic or marketing resources than we do) may enter a market and competition may intensify.
Generally, as markets for real estate-focused online marketplaces, information, and analytics develop, additional competitors (including companies that could have greater access to data, financial, product development, technical, analytic, or marketing resources than we do) may enter a market, and competition may intensify .
Over time, we have expanded, and we continue to expand, our services for real estate information, analytics and online marketplaces in an effort to continue to meet the needs of the industry as it grows and evolves.
Over time, we have expanded, and we continue to expand, our services for real estate online marketplaces, information, and analytics to continue to meet the needs of the industry as it grows and evolves.
We also operate complementary online marketplaces for commercial and residential real estate listings and apartment rentals, as well as a commercial real estate auction platform. We strive to cross-sell our services to our customers in order to best suit their needs.
We also operate complementary online marketplaces for commercial and residential real estate listings and apartment rentals, as well as a commercial real estate auction platform. We strive to cross-sell our services to our customers to best suit their needs. CoStar Research Research Department.
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.
U.S.-based employees represent approximately 88% of the overall employee population, followed by 10% in European, Asia-Pacific, and Latin American countries, and 2% in Canada. None of our employees are represented by a labor union. We have experienced no work stoppages.
We are designing tools to facilitate collaboration between homebuyers and agents. 8 Strategy Our strategy is to provide real estate industry professionals and consumers with critical knowledge to explore and complete transactions by offering the most comprehensive, timely and standardized information on real estate and the right tools to be able to effectively utilize that information.
Strategy Our strategy is to provide real estate industry professionals and consumers with critical knowledge to explore and complete transactions by offering the most comprehensive, timely, and standardized information on real estate, and the right tools to be able to effectively utilize that information.
CoStar Group, founded in 1987, is a leading provider of online real estate marketplaces, information and analytics in the U.S. and U.K. based on the fact that we own and operate leading online marketplaces for commercial real estate and apartment listings in the U.S., based on the numbers of unique visitors and site visits per month; provide more information, analytics and marketing services than any of our competitors; offer the most comprehensive commercial real estate database available; and have the largest commercial real estate research department in the industry.
We own and operate leading online marketplaces for real estate in the U.S. and the U.K., based on the numbers of unique visitors and site visits per month; provide more information, analytics, and marketing services than many of our competitors; offer the most comprehensive commercial real estate database available; and have the largest commercial real estate research department in the industry.
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.
Clients A large number of parties involved in commercial and residential real estate and the related business community use the services we provide 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 Our revenue streams are highly diversified.
We also utilize a low-flying airplane and a fleet of drones to conduct aerial research of commercial real estate. We place researchers on the low-flying aircraft to scout new commercial developments and take aerial photographs and videos. Our U.S. drone operators are Federal Aviation Administration certified and trained to capture aerial photographs and videos.
We also utilize a low-flying airplane and a fleet of drones to conduct aerial research of commercial real estate. We place researchers on the low-flying aircraft to scout new commercial developments and take aerial photographs and videos.
Our researchers are responsible for maintaining the accuracy and reliability of our database information, training our clients to use CoStar Group products and handling their customer service questions, creating a "one touch" approach to customer care.
We have also set up direct feeds from larger apartment sites, owners, and brokers. Our researchers are responsible for maintaining the accuracy and reliability of our database information, training our clients to use CoStar Group products, and handling their customer service questions, creating a "one-touch" approach to customer care.
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.
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 researchers collect and analyze commercial real estate information through phone calls, e-mails and additional research methods including field inspections, public records review, news monitoring, third-party data feeds and user entered content.
Our research professionals undergo an extensive training program so that we can maintain consistent research methods and processes throughout our research department. Our researchers collect and analyze commercial real estate information through phone calls, e-mails, and additional research methods including field inspections, public records review, news monitoring, third-party data feeds, and user entered content.
To encourage clients to use our services regularly, we generally charge a fixed monthly amount for our subscription-based services rather than charging fees based on actual platform usage or number of paid clicks.
Upon renewal, many of the subscription contract rates may change in accordance with contract provisions or as a result of contract renegotiations. To encourage clients to use our services regularly, we generally charge a fixed monthly amount for our subscription-based services rather than charging fees based on actual platform usage or number of paid clicks.
In the commercial real estate, apartment rentals and home for sale industries, we believe the principal competitive factors affecting these services and providers are: • Quality and depth of the underlying databases; • Quality and quantity of leads and, for multifamily, leases delivered; • Ease of use, flexibility and functionality of the software; • Intuitiveness and appeal of the user interface; • Timeliness of the data, including listings; • Breadth of geographic coverage and services offered; • Completeness and accuracy of content; • Client service and support; • Perception that the service offered is the industry standard; • Price; • Effectiveness of marketing and sales efforts; • Proprietary nature of methodologies, databases and technical resources; • Vendor reputation; • Brand loyalty among customers; and • Capital resources.
Competitive factors may vary across each of our commercial and residential information and marketplace businesses; however, we believe we primarily compete on the basis of: • Quality and depth of the underlying databases; • Quality and quantity of leads and, for multifamily, leases delivered; • Ease of use, flexibility, and functionality of the software; • Intuitiveness and appeal of the user interface; • Timeliness of the data, including listings; • Breadth of geographic coverage and services offered; • Completeness and accuracy of content; • Client service and support; • Perception that the service offered is the industry standard; • Price; • Effectiveness of marketing and sales efforts; • Proprietary nature of methodologies, databases, and technical resources; • Vendor reputation; • Brand awareness and reputation, and satisfaction and loyalty among customers; • Adaptive and advanced technology; and • Capital resources.
We provide competitive pay and benefits to attract and retain high-quality talent. In addition to base salaries, compensation may include annual bonuses, commissions, and equity awards. Employees may also participate in an Employee Stock Purchase Plan and a 401(k) Plan with a company match.
In addition to base salaries, compensation may include annual bonuses, commissions, and equity awards. Employees may also participate in an Employee Stock Purchase Plan and a 401(k) Plan with a company match. Our comprehensive set of health and wellness benefits are affordable, high quality, and valuable to employees and their families.
Our comprehensive commercial real estate database powers our information services, sources data used in our analytic services and provides content for most of our online marketplace services and our auction platform. Our ability to utilize the same commercial real estate information across our standardized platform creates efficiencies in operations and improves data quality for our customers.
Our ability to utilize the same commercial real estate information across our standardized platform creates efficiencies in operations and improves data quality for our customers.
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.
The platform allows brokers and sellers to onboard assets, evaluate the results of complimentary marketing campaigns, and follow up on pre-qualified leads.
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.
In addition to organic growth, we have grown our business through strategic acquisitions. We acquired Business Immo, OnTheMarket, and Visual Lease in April 2022, December 2023, and November 2024, respectively. We continue to integrate our recent acquisitions and the services they offer into our CoStar network.
Our standardized platform includes the most comprehensive proprietary database of commercial real estate information in the industry; the largest research department in the commercial real estate industry; proprietary data collection, information management and quality control systems; a large in-house product development team; a broad suite of web-based information, analytics and online marketplace services; a large team of analysts and economists; risk management tools; and a large, diverse base of clients.
Our standardized platform includes the most comprehensive proprietary database of commercial real estate information in the industry; the largest research department in the commercial real estate industry; proprietary data collection, information management, and quality control systems; a large in-house product development team; a broad suite of web-based information, analytics, and online marketplace services; a large team of analysts and economists; risk management tools; and a large, diverse base of clients. 8 We have spent more than 35 years building and acquiring databases of real estate information, which includes information on homes, school, communities, commercial properties, leasing, sales, comparable sales, tenants, and demand statistics, as well as digital images, drone videos, and 3-D tours, plat maps, and floor plans.
Sales and Marketing Our overall sales strategy is to provide optimal service to our existing customers, attract new clients and cross-sell the numerous solutions we offer. Our sales teams sell multiple products and are primarily located in field sales offices throughout the U.S., with others in Canada, the U.K., Spain, France and Germany.
We are not presently, and we do not anticipate becoming dependent upon one or a few customers. 11 Sales and Marketing Our sales strategy focuses on optimal service for existing customers, attracting new clients, and cross-selling our solutions. Our sales teams, primarily located in field offices across the U.S., Canada, the U.K., Spain, France, and Germany, sell multiple products.
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.
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. Governmental Regulation As a public company with global operations, we are subject to various federal, state, local, and foreign laws and regulations.
We provide information services internationally, through our Business Immo, Belbex and Thomas Daily businesses in France, Spain and Germany, respectively. • CoStar Real Estate Manager is a real estate lease administration, portfolio management and lease accounting compliance software solution designed for corporate real estate managers, company executives, financial accounting directors, business unit directors, brokers and project managers.
Information Services We provide real estate and lease management technology solutions, including lease administration, lease accounting, and abstraction services, through our CoStar Real Estate Manager service and the Visual Lease Acquisition. We provide information services internationally, through our Business Immo, Belbex, and Thomas Daily brands in France, Spain, and Germany, respectively.
We manage and report our business geographically in two operating segments, with our 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.
Segments Our chief executive officer, who acts as the CODM, makes operating decisions and evaluates operating performance on the basis of our business geographically. We operate in two reportable segments which are North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific, and Latin America.
The diversity of thought that comes from different perspectives and backgrounds allows us to deliver cutting edge research and technology solutions that best serve our customers.
The diversity of thought that comes from different perspectives and backgrounds allows us to deliver cutting edge research and technology solutions that best serve our customers. We also develop various programming communications and training to help foster an inclusive environment for individuals regardless of background. We provide competitive pay and benefits to attract and retain high-quality talent.
Our services are typically distributed to our clients under subscription-based license agreements that typically renew automatically, a majority of which have a term of at least one year. Upon renewal, many of the subscription contract rates may change in accordance with contract provisions or as a result of contract renegotiations.
Sellers pay to list their businesses, and buyers can search listings for free. Our services are typically distributed to our clients under subscription-based license agreements that typically renew automatically, a majority of which have a term of at least one year.
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.
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. In February 2024, we began selling Homes.com memberships, which are subscription-based advertising services promoting an agent's profile and listings on our website.
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.
Expansion and Growth We have expanded and continue to expand the coverage and depth of our online marketplace services, information, and analytics. 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. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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 ® .
Buyers can search for properties that meet their investment goals and are given access to market analysis and due diligence documents. • Land.com is a marketplace for rural land sales, where sellers pay to list their land and buyers can search listings. • BizBuySell is a marketplace for operating businesses and franchises for sale.
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.
OnTheMarket is a property portal in the U.K. which primarily offers subscriptions-based advertising services to agents. Other Marketplaces • Ten-X is 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.
Our database has been developed and enhanced for more than 35 years by a research department that makes daily database updates. In addition to our internal efforts to grow the database, we have obtained and assimilated a number of proprietary databases.
In addition to our internal efforts to grow the database, we have obtained and assimilated a number of proprietary databases. Our comprehensive commercial real estate database powers our information services, sources data used in our analytic services, and provides content for most of our online marketplace services and our auction platform.
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 manage client accounts through frequent meetings, product training, and updates on new enhancements. In 2024, we implemented sales initiatives targeting agents, brokers, property owners, and lenders in the U.S., continuing this focus into 2025.
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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.
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Overview CoStar Group is a global leader of commercial and residential real estate information, analytics, and online marketplaces. Our mission is to digitize the world's real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives.
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Industry Overview The market for real estate information and analysis is vast, based on the variety, volume and value of transactions related to real estate. Each transaction has multiple participants and multiple information requirements, and in order to facilitate transactions, industry participants must have extensive, accurate and current information and analysis.
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Our major brands include CoStar, a leading global provider of commercial real estate data, analytics and news; Apartments.com, a leading platform for apartment rentals, based on total revenue; LoopNet, the most trafficked commercial real estate marketplace; and Homes.com, the fastest-growing residential real estate marketplace, based on traffic.
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Members of the real estate and related business community require daily access to current data such as space availability, properties for-sale, rental units available, rental rates, vacancy rates, tenant movements, comparable sales, supply, new construction, absorption rates and other important market developments to carry out their businesses effectively.
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CoStar Group’s industry-leading brands include STR, a global leader in hospitality data and benchmarking, Ten-X, an online platform for commercial real estate auctions and negotiated bids and OnTheMarket, a leading residential property portal in the U.K.
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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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These license agreements generally grant us a non-exclusive license to use the data and images in the creation and supplementation of our online marketplaces, information, and analytics. 9 Services Our principal online commercial real estate information and analytics services and online marketplaces are: CoStar CoStar offers a subscription-based platform for commercial real estate intelligence with several key features: • Properties Provides a comprehensive inventory of various property types, including office, industrial, retail, multifamily, hospitality, student housing, and land.
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Various organizations, including hundreds of brokerage firms, directory publishers and local research companies, collected data on specific markets and developed software to analyze the information they independently gathered.
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It includes for-lease and for-sale listings, historical data, property analytics, building photographs, demographics, maps, and floor plans. Users can identify available space, evaluate opportunities, value assets, and analyze market conditions. • Leasing Offers data on lease transactions and tools to manage user-entered lease data.
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This highly fragmented methodology resulted in duplication of efforts in the collection and analysis of information, excessive internal cost and the creation of non-standardized data containing varying degrees of accuracy and comprehensiveness, resulting in a formidable information gap.
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Subscribers can analyze lease datasets and perform cash flow analysis from both landlord and tenant perspectives. • Sales A database of commercial real estate sales transactions, useful for researching property comparables, identifying market trends, expediting appraisals, and supporting property valuations. • Tenants Provides detailed tenant information, including lease expirations, occupancy levels, and growth rates, allowing users to target prospective clients. • Owners Provides detailed portfolio information, including lease expirations, occupancy levels, and growth rates, allowing users to target prospective clients. • Markets Enables viewing and reporting on market and submarket trends, including leasing, vacancy, rental rates, construction, investment sales, and economic conditions.
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The creation and maintenance of a standardized information platform for commercial real estate requires infrastructure including a standardized database, accurate and comprehensive research capabilities, experienced analysts, easy-to-use technology and intensive participant interaction. By combining our extensive database, researchers, our experienced team of analysts and economists, technological expertise and broad customer base, we believe that we have created such a platform.
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It covers all major real estate sectors and provides forecasts. • Benchmarking Provides hospitality benchmarking, allowing hotels to measure performance against competitors based on occupancy, ADR, and RevPAR. • Lender Tools for lenders to manage loan portfolios and risk, including portfolio surveillance, concentration risk monitoring, stress testing, and expected credit loss modeling.
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The apartment rental advertising industry serves property managers and owners who are tasked with finding renters to occupy vacant apartments, as well as renters who are searching for their next home.
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LoopNet LoopNet.com, the flagship brand of our network of commercial property marketing sites, is a top commercial real estate marketing site where property owners, landlords, and brokers can advertise properties for sale or lease on a site that supplements their listing with CoStar Group's database of property information and content.
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Property managers have several options at their disposal, including their own websites, drive-by and outdoor advertising, traditional classified ads, free online listing services, search engine marketing and ILS, like Apartments.com and the network of apartment listing websites we own and operate.
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Users can also access industry news from LoopNet’s editorial team as they search for properties. LoopNet offers a variety of subscription-based ad packages and enhancements. LoopNet Silver is designed for real estate professionals seeking maximum exposure and advanced marketing tools and markets listings to all LoopNet.com visitors.
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Many apartment ILS websites feature only the rental availabilities that larger property owners pay to advertise, resulting in a poor user experience in which the renter’s search criteria return either limited or no results, irrelevant results or stale results that do not represent actual availabilities. We believe that consumers expect accurate, actionable and comprehensive apartment rental information.
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LoopNet Gold, Platinum, and Diamond Ads provide additional exposure on the LoopNet Network and retargeting across the web.
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Our apartment ILS websites include renter-focused features like the ability to filter search results according to various criteria (e.g., commute time to work); professional images of the properties, including immersive videos and 3-D interactive models; custom neighborhood profiles; and tenant reviews. Our network of apartment listing websites draws on our multifamily database and includes researched and verified information.
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We provide commercial real estate marketing sites internationally through the following brands LoopNet.co.uk in the U.K., BureauxLocaux in France, and Belbex.com in Spain. 10 Residential Homes.com and the acquisition of OnTheMarket have enabled us to expand our offerings to the residential for sale market.
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We proactively gather information on available rentals to improve the accuracy of the listings on our apartment ILS websites, including real time unit-level availability, current pricing and rent specials. We have continually invested in our network to improve the features and services offered to property managers and website users.
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Inside sales teams in Arlington, VA, and Richmond, VA, work lead lists, prospect for new customers, and perform product demonstrations. Local offices support field sales and research, providing clients with a local presence. Field sales teams handle customer service, client satisfaction, and relationship building. Local offices also serve as hubs for training, market insights, product feedback, and industry connections.
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Recent additions include: dynamic lead forms that provide more information about prospective residents, making rent trends information publicly available, free digital ad retargeting and integrated online rental solutions, including lease applications with tenant credit and background checks.
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We sponsor and attend industry events to reinforce relationships with core user groups. For Apartments.com and Homes.com, we use multi-channel marketing campaigns, including TV, radio, online ads, social media, email, public relations, and SEO. We plan to continue these methods and apply similar strategies for LoopNet and Ten-X, optimizing marketing investments.
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We believe that we have created and maintain easily searchable apartment ILS websites with a comprehensive selection of rentals, information on actual rental availabilities and rents and in-depth data on neighborhoods, as well as easy to use and actionable tools for the rental process.
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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. Proprietary Technology Our IT professionals develop and enhance services for customers, maintain existing services, integrate current offerings, secure our real estate data, and provide research automation tools to improve data quality and research efficiency.
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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. 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.
Added
They are responsible for our online marketplace services, analytics, and infrastructure, implementing technologies to increase research capacity and data quality. Unique data collection and quality control mechanisms have been developed, and our enterprise information management system integrates sales, research, customer support, and accounting information. This system supports commercial real estate research, contact management, workflow automation, and daily quality checks.
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We plan to develop original, media-rich content of neighborhoods, schools, parks and condominium buildings' amenities and common areas to supplement information in agent listings.
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Additionally, fraud-detection and adaptive authentication technologies have been implemented to prevent unauthorized access. Our IT team also maintains servers and network components, ensuring uninterrupted service from multiple data centers and cloud platforms, with continuous monitoring for fast, reliable access and security.
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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.
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Quantitative and Qualitative Disclosures about Market Risk” in this Report. 12 Competition Our business depends on our ability to successfully provide real estate industry professionals and consumers with comprehensive, timely, and standardized information and arm them with the right tools to use, analyze, and transact in the information.
Removed
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.
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The market for real estate-focused online marketplaces, information, and analytics generally is competitive, dynamic, and is constantly evolving as a result of technological advancements, customer preferences, and new products and offerings.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThird parties may misappropriate our data through website scraping, robots or other means and aggregate and display this data on their websites. Artificial intelligence is becoming increasingly powerful and sophisticated, and third parties may utilize artificial intelligence to misappropriate our data more quickly and at a larger scale than in the past.
Biggest changeAI is becoming increasingly powerful and sophisticated, and third parties (including our competitors) and “copycat” websites may utilize AI to misappropriate our data more quickly and at a larger scale than in the past. Use of AI also increases the risk of cyberattacks and data breaches, which can occur more quickly and evolve more rapidly when AI is used.
We may not be able to successfully develop and introduce new or upgraded information, analytics and online marketplace services that are attractive to our users and advertisers or successfully combine or shift focus from current services with less demand, which could decrease our revenues and our profitability.
We may not be able to successfully develop and introduce new or upgraded online marketplace services, information, and analytics that are attractive to our users and advertisers or successfully combine or shift focus from current services with less demand, which could decrease our revenues and our profitability.
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.
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 or rising elevated interest rates, elevated 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.
Consolidation, or other cost-cutting measures by our customers, may lead to cancellations of our information, analytics and online marketplace services by our customers, reduce the number of our existing clients, reduce the size of our target market or increase our clients’ bargaining power, all of which could cause our revenues to decline and reduce our profitability.
Consolidation, or other cost-cutting measures by our customers, may lead to cancellations of our online marketplace services, information, and analytics by our customers, reduce the number of our existing clients, reduce the size of our target market, or increase our clients’ bargaining power, all of which could cause our revenues to decline and reduce our profitability.
Our potential liability for information distributed by us to others could require us to implement measures to reduce our exposure to such liability, which may require us to expend substantial resources and limit the attractiveness of our information, analytics and online marketplaces to users.
Our potential liability for information distributed by us to others could require us to implement measures to reduce our exposure to such liability, which may require us to expend substantial resources and limit the attractiveness of our online marketplaces, information, and analytics to users.
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.
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.
In addition, if we do not prevail on an intellectual property claim, this could result in a change to our methodology or information, analytics and online marketplace services and could reduce our profitability. Effective trademark, trade secret, patent and copyright protection may not be available in every country in which we provide our services.
In addition, if we do not prevail on an intellectual property claim, this could result in a change to our methodology or online marketplace services, information, and analytics, and could reduce our profitability. 26 Effective trademark, trade secret, patent, and copyright protection may not be available in every country in which we provide our services.
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.
Any errors, defects, disruptions, or other performance problems with our services could harm our reputation, business, results of operations, and financial condition. 24 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.
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.
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 adequately against unauthorized third-party copying or use, which could harm our competitive position.
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.
Our ability to generate revenues from our marketplace business depends, in part, on our ability to 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.
Our ability to attract agents and consumers to our Homes.com Network, its websites and mobile applications and other residential real estate tools depends, to some degree, on us providing timely access to comprehensive and accurate real estate listings and information. We get listings data primarily from MLSs in the markets we serve.
Our ability to attract agents and consumers to Homes.com, its websites, and mobile applications, and other residential real estate tools depends, to some degree, on us providing timely access to comprehensive and accurate real estate listings and information. We get listings data primarily from MLSs in the markets we serve.
This could markedly decrease the quantity and quality of the sale and rental data we provide, reduce customer confidence in our products and services and cause customers to go elsewhere for real estate listings and information, which could severely harm our business, results of operations and financial condition.
This could markedly decrease the 27 quantity and quality of the sale and rental data we provide, reduce customer confidence in our products and services, and cause customers to go elsewhere for real estate listings and information, which could severely harm our business, results of operations, and financial condition.
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.
Further, with respect to the Apartments.com Network and LoopNet Network, 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.
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.
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 online marketplace services, information, and analytics, any of which could harm our business, results of operations, and financial condition.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, 28 we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital, or restructure or refinance our indebtedness.
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.
A depressed real estate market has a negative impact on our core customer base, which could decrease demand for our online marketplaces, information, and analytics. Also, companies in this industry may consolidate, often in order to reduce expenses.
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 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 29 internal and/or external customer-facing operations.
We have expended significant resources to develop proprietary content and any misappropriation of our data could reduce that value of that content or our return on investment related to that content, which could harm our competitive position and results of operations.
We have expended significant resources to develop proprietary content and any misappropriation of our data could reduce the value of that content or our return on investment related to that content, which could harm our competitive position and results of operations.
Failure to disclose accurate information in a timely manner may also adversely affect our reputation, business, or financial performance. Increased attention to ESG matters may require us to incur additional costs or otherwise adversely impact our business.
Failure to disclose accurate information in a timely manner may also adversely affect our reputation, business, or financial performance. Attention to ESG matters may require us to incur additional costs or otherwise adversely impact our business.
Each MLS has adopted its own rules, policies, and agreement terms governing, among other things, how MLS data 29 may be used and how listings data must be displayed on our websites and mobile applications.
Each MLS has adopted its own rules, policies, and agreement terms governing, among other things, how MLS data may be used and how listings data must be displayed on our websites and mobile applications.
Additionally, the methods, including Google Analytics, that we use to measure unique visitors to our portals may misstate the actual number of unique persons who visit our network of mobile applications and websites for a given month or may differ from the methods used by competitors, which may impact the comparability of unique visitors between companies.
Additionally, the methods, including Google Analytics, that we use to measure average monthly unique visitors to our portals may misstate the actual number of unique persons who visit our network of mobile applications and websites for a given month or may differ from the methods used by competitors, which may impact the comparability of unique visitors between companies.
Amazon Web Services ("AWS") and Akamai Connected Cloud ("ACC") are distributed computing infrastructure platforms for business operations, commonly referred to as “cloud” computing services. We currently run a majority of our computing on AWS and ACC and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by AWS and ACC.
Amazon Web Services (“AWS”) and Akamai Connected Cloud (“ACC”) are distributed computing infrastructure platforms for business operations, commonly referred to as “cloud” computing services. We currently run a majority of our computing on AWS and ACC and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by AWS and ACC.
We may be unable to obtain such waivers, amendments or alternative or additional financing on a timely basis or at all, or on favorable terms. A breach of the covenants under the 2020 Credit Agreement or the indenture that governs the Senior Notes could result in an event of default under the applicable indebtedness.
We may be unable to obtain such waivers, amendments, or alternative or additional financing on a timely basis or at all, or on favorable terms. A breach of the covenants under the 2024 Credit Agreement or the indenture that governs the Senior Notes could result in an event of default under the applicable indebtedness.
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.
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, for example, one of our vendors providing IT infrastructure management software was compromised by cyberattacks.
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.
Borrowings under the 2024 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 2024 Credit Agreement.
It is not possible to predict what effect the change to SOFR, SONIA and EURIBOR may have on our interest rates.
It is not possible to predict what effect the change to Term SOFR, SONIA, and EURIBOR may have on our interest rates.
In addition, the 2020 Credit Agreement requires us to comply with a maintenance covenant that we will not exceed a total net leverage ratio, calculated as total consolidated debt, net of up to $1.0 billion of unrestricted cash and cash equivalents, to consolidated EBITDA, of 4.50 to 1.00.
In addition, the 2024 Credit Agreement requires us to comply with a maintenance covenant that we will not exceed a total net leverage ratio, calculated as total consolidated debt, net of up to $1.0 billion of unrestricted cash and cash equivalents, to consolidated EBITDA, of 4.50 to 1.00.
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.
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 2024 Credit Agreement.
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 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, the Homes.com and OnTheMarket residential marketplaces, and the Land.com Network.
Technical problems or disruptions that affect either our customers’ ability to access our services, or the software, internal applications, database and network systems underlying our services, could damage our reputation and lead to reduced demand for our information, analytics and online marketplace services, lower revenues and increased costs.
Technical problems or disruptions that affect either our customers’ ability to access our services, or the software, internal applications, database, and network systems underlying our services, could damage our reputation and lead to reduced demand for our online marketplace services, information, and analytics, lower revenues and increase costs.
If 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.
If 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 results of operation. 17 In addition, as we integrate acquired businesses, we continue to assess which services we believe will best meet the needs of our customers.
Natural disasters, disease outbreaks and pandemics, power shortages, terrorism, political unrest, telecommunications failure, vandalism, geopolitical instability, war, climate change, and other events beyond our control could negatively impact our operations or otherwise harm our business.
Climate related events and other events beyond our control could harm our business. Natural disasters, disease outbreaks and pandemics, power shortages, terrorism, political unrest, telecommunications failure, vandalism, geopolitical instability, war, climate related events, and other events beyond our control could negatively impact our operations or otherwise harm our business.
The 2020 Credit Agreement contains customary restrictive covenants imposing operating and financial restrictions on us, including restrictions that may limit our ability to engage in acts that we believe may be in our long-term best interests.
The 2024 Credit Agreement contains customary restrictive covenants imposing operating and financial restrictions on us, including restrictions that may limit our ability to engage in acts that we believe may be in our long-term best interests.
In addition, during a Covenant Suspension Period, certain customary negative and affirmative covenants contained in the 2020 Credit Agreement are suspended, including the covenants restricting affiliate transactions, incurrence of indebtedness, investments, asset sales and restricted payments.
In addition, during a Covenant Suspension Period, certain customary negative and affirmative covenants contained in the 2024 Credit Agreement are suspended, including the covenants restricting affiliate transactions, incurrence of indebtedness, investments, asset sales, and restricted payments.
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.
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 we were to lose the services of Mr.
We currently intend to invest our future earnings, if any, to finance our growth or share repurchases. In addition, provisions of the 2020 Credit Agreement governing our credit facilities limit our ability to pay cash dividends.
We currently intend to invest our future earnings, if any, to finance our growth or share repurchases. In addition, provisions of the 2024 Credit Agreement governing our credit facilities limit our ability to pay cash dividends.
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.
Numerous and evolving cybersecurity risks, 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 threaten the confidentiality, availability, and integrity of Confidential Information and our IT systems.
The operating restrictions and financial covenants in the 2020 Credit Agreement may limit our ability to finance future operations or capital needs, to engage in other business activities or to respond to changes in market conditions.
The operating restrictions and financial covenants in the 2024 Credit Agreement may limit our ability to finance future operations or capital needs, to engage in other business activities, or to respond to changes in market conditions.
Failure to gain market acceptance for Homes.com could impede our ability to maintain or grow current revenue levels or reduce profits for our other brands, adversely affect the image of our brands, erode our competitive position, and result in long-term harm to our business and financial results.
Failure to gain market acceptance for Homes.com or any other new product could impede our ability to maintain or grow current revenue levels or reduce profits for our other brands, adversely affect the image of our brands, erode our competitive position, and result in long-term harm to our business, and financial results.
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.
Our marketplace businesses, including the LoopNet Network, the Apartments.com Network, the Homes.com and OnTheMarket residential marketplaces, and the Land.com Network, depend on advertising revenues generated primarily through sales to persons in the real estate industry, including broker, agents, 20 property managers and owners, real estate agents, and other advertisers.
It is unclear, however, whether SOFR, SONIA or EURIBOR will retain market acceptance as a LIBOR replacement tool, and we may need to renegotiate our 2020 Credit Agreement if other LIBOR alternatives are established and become more widely adopted. Each of SOFR, SONIA and EURIBOR differ from LIBOR, both in the actual rate and how it is calculated.
It is unclear, however, whether Term SOFR, SONIA or EURIBOR will retain market acceptance as a LIBOR replacement tool, and we may need to renegotiate the 2024 Credit Agreement if other LIBOR alternatives are established and become more widely adopted. Each of Term SOFR, SONIA and EURIBOR differ from LIBOR, both in the actual rate and how it is calculated.
The loss of existing relationships with MLSs and other listing providers, whether due to termination of agreements, loss of MLS memberships, or otherwise, changes to our rights to use or timely access listing data or an inability to continue to add new listing providers or changes to the way real estate information is shared, may negatively impact our listing data quality.
The loss of existing relationships with MLSs and other listing providers, whether due to termination of agreements, loss of MLS memberships, or otherwise, changes to our rights to use or timely access listing data or an inability to continue to add new listing providers or changes to the way real estate information is shared, may negatively impact our listing data quality and our ability to maintain stable data feeds.
We may not be able to maintain or establish relationships with third-party listing providers, which could limit the information we have to power our products and services and impair our ability to attract or retain customers.
We may not be able to maintain or establish relationships with third-party listing providers, which could limit the information we have to power our products and services and impair our ability to maintain stable data feeds and attract or retain customers.
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.
The tools and techniques (including AI) 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.
Further, certain acquisitions may be subject to regulatory approval, which can be time-consuming and costly to obtain or may be denied, as in the case of RentPath. If regulatory approval is obtained, the terms of any such approval may impose limitations on our ongoing operations or require us to divest assets or lines of business.
Further, certain acquisitions may be subject to regulatory approval, which can be time-consuming and costly to obtain or may be denied. If regulatory approval is obtained, the terms of any such approval may impose limitations on our ongoing operations or require us to divest assets or lines of business.
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.
In addition, the impacts of climate-related events on the global economy and our industry are rapidly evolving. Physical impacts of climate related events (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.
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.
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, 2024, we had $1.0 billion of Senior Notes outstanding and an additional approximately $1.1 billion available to be drawn under the 2024 Credit Agreement.
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.
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, installing 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 to access our IT Systems.
These fluctuations could negatively affect our results of operations during the period in question and/or future periods or cause our stock price to decline. In addition, changes in accounting policies or practices may affect our level of net income. Fluctuations in our financial results, revenues and expenses may cause the market price of our common stock to decline.
These fluctuations could negatively affect our results of operations during the period in question and/or future periods or cause our stock price to decline. In addition, changes in accounting policies or practices may affect our level of net income.
It may be difficult to detect, investigate or remediate such cyber attacks quickly and such attacks often are not recognized or detected until after they have been launched against a target.
It is difficult to detect, investigate, and remediate cyber-attacks quickly and attacks often are not recognized or detected until after they have been launched against a target.
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.
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 OnTheMarket and Visual Lease with CoStar Group when and as expected.
We may not be able to continue to grow our customer base, keep the cancellation rate low or sell new services to existing customers as a result of several factors, including, continuing global economic and geopolitical volatility, economic pressures and the impact of inflation on our costs and on customer spending; the business failure of current clients; customer decisions that they do not need our services or to use alternative services; customers’ and potential customers’ budgetary constraints; consolidation in the real estate and/or financial services industries; data quality; technical problems; competitive pressures; or devaluation of the local currencies of international customers relative to the U.S. dollar which impairs the purchasing power of such customers.
Our renewal rate, net new booking and revenues may not grow, or could decrease, if we cannot attract new customers, continue to keep our cancellation rate low, and continue to sell new services to our existing customers, which may occur as a result of several factors, including, continuing global economic and geopolitical volatility, economic pressures, and the impact of inflation on our costs and on customer spending; the business failure of current clients; customer decisions that they do not need our services or to use alternative services; customers’ and potential customers’ budgetary constraints; consolidation in the real estate and/or financial services industries; data quality; technical problems; competitive pressures; or devaluation of the local currencies of international customers relative to the U.S. dollar which impairs the purchasing power of such customers.
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.
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: • Interruption of our operations; • Unavailability of our systems or services; • Improper disclosures of data; • Improper payments; • Harm to our reputation and brands; • Regulatory scrutiny, enforcement actions, legal proceedings and claims, (including class action lawsuits), and other legal and financial exposure; • Remediation, system restoration, incident response, and compliance costs; 23 • Loss of customer confidence in, or decreased use of, our products and services; • Diversion of the attention of management from the operation of our business; and • Contractual penalties or other payments as a result of third-party losses or claims.
If we fail to comply with the rules and compliance requirements of MLSs, our access to and use of listings data may be restricted or terminated .
If we fail to comply with the rules and compliance requirements of MLSs, our access to and use of listings data may be restricted or terminated and we may be unable to maintain stable data feeds .
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.
Global economic uncertainties or downturns could adversely affect our business and results of operations, including financial and credit market fluctuations, changes in economic policy, elevated inflation and responsive actions, elevated interest rates, labor shortages, supply chain disruptions, trade uncertainty, political unrest, geographical instability, unanticipated disasters or global health events, or other impacts from the macroeconomic environment.
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.
Significant break-up fees incurred in the future may adversely affect our results of operations and financial condition. 21 As a result of our acquisitions, we had approximately $3.0 billion of goodwill and intangibles as of December 31, 2024. Future acquisitions may increase this amount.
If we eliminate or phase out a service and are not able to offer and successfully market and sell an alternative service, our revenues may decrease, which could have a material adverse effect on our results of operations.
If we eliminate or phase out a service and are not able to offer and successfully market and sell an alternative service, our revenues may decrease, which could have an adverse effect on our results of operations. Competition could render our services uncompetitive and reduce our profitability.
Our IT Systems may be vulnerable to cyberattacks or security breaches, and third parties may be able to access our, our customers’ or our employees’ Confidential Information, including personal or proprietary information, that is stored on or accessible through those systems.
Our IT Systems are vulnerable to cyberattacks and security breaches involving our customers’ or our employees’ Confidential Information, including personal or proprietary information, that is stored on or accessible through those systems.
If we are required to recognize goodwill and intangibles impairment charges in the future, this would negatively affect our financial results in the periods of such charges, which may reduce our profitability. Cyberattacks and security vulnerabilities could result in serious harm to our reputation, business and financial condition.
If we are required to recognize goodwill and intangibles impairment charges in the future, this would negatively affect our financial results in the periods of such charges, which may reduce our profitability.
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.
Florance 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. Our internal and external investments may place downward pressure on our operating margins.
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.
In addition, any cyberattacks or data security breaches affecting companies that we acquire and/or that provide us services (including data center and cloud computing providers) could materially impact our business. Further, we may not be able to recover any or all damages suffered as a result of security breaches or other security incidents from such third-party providers.
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 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 operations, or prospects of the combined business.
Global economic uncertainties and downturns or a downturn or consolidation in the real estate industry may decrease customer demand for our services and adversely affect our business and results of operations.
Fluctuations in our financial results, revenues, and expenses may cause the market price of our common stock to decline. 18 Global economic uncertainties and downturns or a downturn or consolidation in the real estate industry may decrease customer demand for our services and adversely affect our business and results of operations.
If regulatory approval is denied, we may incur significant, additional costs payable to an acquisition target as a result of failure to close the transaction. For example, we incurred a termination fee of $52 million in connection with termination of the RentPath purchase agreement.
If regulatory approval is denied, we may incur significant, additional costs payable to an acquisition target as a result of failure to close the transaction.
The real estate market may be influenced by general economic conditions, economic cycles, changes in interest rates, seasonality and many other factors, which in turn may impact our financial results.
Our operating results and revenues are subject to fluctuations, and our quarterly financial results may be subject to market cyclicality, each of which could negatively affect our stock price. The real estate market may be influenced by general economic conditions, economic cycles, changes in interest rates, seasonality, and many other factors, which in turn may impact our financial results.
In addition, “copycat” websites may misappropriate data on our website and attempt to imitate our brands or the functionality of our website.
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.
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.
Efforts by us, our customers, our vendors and other users of our IT Systems to prevent, detect, and respond to data security incidents cannot guarantee protection due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
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.
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.
Pressure from competitors seeking to acquire a greater share of our advertisers’ overall marketing budget could adversely affect our pricing and margins, lower our revenue and increase our research and development and marketing expenses. If we are unable to compete successfully against our existing or future competitors, our business, results of operations or financial condition could be adversely affected.
Pressure from competitors seeking to acquire a greater share of our advertisers’ overall marketing budget could adversely affect our pricing and margins, lower our revenue, and increase our research and development and marketing expenses.
The different sectors of the large and fragmented industry, such as office, industrial, retail, multifamily, single family and others, are influenced differently by different factors, and have historically moved through economic cycles with different timing. As such, it is difficult to estimate the potential impact of economic cycles and conditions or seasonality from year-to-year on our overall operating results.
The different sectors of the large and fragmented real estate industry, such as office, industrial, retail, multifamily, single family, and others, are influenced differently by different factors, and have historically moved through economic cycles with different timing.
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.
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.
To be successful, we must be able to quickly adapt to changes in the industry, as well as rapid technological changes, by continually enhancing our information, analytics and online marketplace services. As a result, we must continually invest resources in research and development to improve the appeal and comprehensiveness of our services and effectively incorporate new technologies.
To be successful, we must be able to quickly adapt to changes in the industry, as well as rapid technological changes, including AI and machine learning, by continually enhancing our information, analytics, and online marketplace services.
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.
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.
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
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. Stock repurchases under our stock repurchase program are discretionary, and we cannot guarantee that our stock repurchase program will achieve the desired objectives.
If we are unable to maintain our chargeback rate or refund rates at acceptable levels, our processing vendors may increase our transaction fees or terminate their relationships with us. Any increases in our credit and debit card fees could harm our results of operations, particularly if we elect not to raise our rates for our services to offset the increase.
If we are unable to maintain our chargeback rate or refund rates at acceptable levels, our processing vendors may increase our transaction fees or terminate their relationships with us.
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.
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.
Such ESG matters may also impact our suppliers or customers, which may adversely impact our business, financial condition, or results of operations. Risks related to our data, intellectual property and listings If we are not able to obtain and maintain accurate, comprehensive or reliable data, we could experience reduced demand for our information, analytics and online marketplace services.
Risks related to our data, intellectual property, and listings If we are not able to obtain and maintain accurate, comprehensive, or reliable data, we could experience reduced demand for our online marketplace services, information, and analytics. Our success depends on our clients’ confidence in the comprehensiveness, accuracy, and reliability of the data and analysis we provide.
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.
Competition in these markets may increase if economic conditions or other circumstances cause customer bases and customer spending to decrease and service providers to compete for fewer customer resources. 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.
The termination of our ability to process payments on any major credit or debit card would significantly impair our ability to operate our business. Climate change and other events beyond our control could harm our business.
Any increases in our credit and debit card fees could harm our 25 results of operations, particularly if we elect not to raise our rates for our services to offset the increase. The termination of our ability to process payments on any major credit or debit card would significantly impair our ability to operate 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.
Longer-term physical impacts may also result in changing consumer preferences, which may adversely impact demand for certain of our products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeInternal and external asset identification, assessment, monitoring and classification procedures to evaluate cybersecurity risks and inform mitigation efforts. b. A security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our cyber processes, and (3) our cyber threat and incident response; c.
Biggest changeKey elements of our cybersecurity risk management program include, but are not limited to the following: a. Internal and external asset identification, assessment, monitoring, and classification procedures to evaluate cybersecurity risks and inform mitigation efforts; b.
See Risk Factors – “Cyberattacks and security vulnerabilities could result in serious harm to our reputation, business and financial condition.” and “Technical problems or disruptions that affect either our customers’ ability to access our services, or the software, internal applications, database and network systems underlying our services, could damage our reputation and lead to reduced demand for our information, analytics and online marketplace services, lower revenues and increased costs.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
See Risk Factors – “Cyberattacks and security vulnerabilities could result in material harm to our reputation, business, and financial condition.” and “Technical problems or disruptions that affect either our customers’ ability to access our services, or the software, internal applications, database, and network systems underlying our services, could damage our reputation and lead to reduced demand for our online marketplace services, information, and analytics, lower revenues and increase costs.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
Our management team’s experience includes industry-recognized certifications, such as CISSP, CISM, and CISA, decades of experience as part of our IT team, and previous cybersecurity leadership positions at various Fortune 500 companies and U.S.
Additionally, our management team’s experience includes industry-recognized certifications, such as CISSP, CISM, and CISA, decades of experience as part of our IT team, and previous cybersecurity leadership positions at various Fortune 500 companies and U.S. Defense contractors.
Defense contractors. 33 Our management team is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
The CTO and VPCS are informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public, or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. 32
This does not imply that we meet any particular technical standards, specifications, or requirements at all times, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Additionally, we engage a third-party vendor regularly to benchmark our information security program’s maturity against the NIST CSF.
This does not imply that we meet any particular technical standards, specifications, or requirements at all times, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
The Audit Committee oversees management’s implementation of our cybersecurity risk management program. Our Audit Committee receives reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, as necessary, regarding any significant cybersecurity incidents. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Our Audit Committee receives reports from the CTO on our cybersecurity risks. In addition, the CTO updates the Audit Committee, as necessary, regarding any significant cybersecurity incidents. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. Our management team is informed and monitors the prevention, detection, mitigation, and remediation of cybersecurity threats.
We have not identified material risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
A third-party risk management process for key service providers, suppliers, and vendors who access critical systems and data based on risk profile. We have not identified material risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. Key elements of our cybersecurity risk management program include, but are not limited to the following: a.
Additionally, we engage a third-party vendor regularly to benchmark our information security program’s maturity against the NIST CSF. 31 Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
The use of external service providers, where appropriate, to assess defenses, analyze threat intelligence, or otherwise assist with aspects of our security controls; d. Cybersecurity awareness training of our employees, software development teams, incident response personnel, and senior management; e.
A security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our cyber processes, and (3) our cyber threat and incident response; c. The use of external service providers, where appropriate, to assess defenses, analyze threat intelligence, or otherwise assist with aspects of our security controls; d.
Our management team is informed and monitors the prevention, detection, mitigation and remediation of cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CTO has over 25 years of information technology experience, including leadership experience managing global product development, information security, IT infrastructure and engineering.
A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and regular tabletop exercises to assess our response readiness; and f. A third-party risk management process for key service providers, suppliers, and vendors who access critical systems and data based on risk profile.
Cybersecurity awareness training of our employees, software development teams, incident response personnel, and senior management; e. A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and regular tabletop exercises to assess our response readiness; and f.
Added
The Audit Committee oversees management’s implementation of our cybersecurity risk management program. Our Chief Technology Officer (CTO) is responsible for oversight of our cybersecurity risk management program. Our Vice President of Cyber Security (VPCS), who reports up to the CTO, is responsible for day-to-day assessment and management of cybersecurity risk.
Added
He holds a M.S. in information systems from George Washington University and a B.A. in computer science from State University of New York. The VPCS has over 20 years of information security and technology experience, including 10 years in senior leadership roles in service provider, enterprise, and military environments.
Added
He holds an MBA from Georgetown University, a M.S. in information systems from Virginia Tech University, and a B.S. in computer information technology from Purdue University.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 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.
Biggest changeItem 2. Properties As of January 21, 2025, we have relocated our headquarters to our owned building at 1201 Wilson Blvd in Arlington, Virginia, occupying approximately 160,000 square feet. We exited our previous headquarters located at 1331 L Street, NW, in downtown Washington, D.C., with a lease that expires on May 31, 2025.
These locations house research, product development and sales functions. All of our owned properties are held under fee simple ownership and are not materially encumbered. We also operate certain of our research, development and sales functions out of additional leased office spaces in Irvine, California; San Diego, California; and Atlanta, Georgia.
These locations primarily house research, product development, and sales functions. All of our owned properties are held under fee simple ownership and are not materially encumbered. We also operate certain of our research, development, and sales functions out of additional leased office spaces in Irvine, California; San Diego, California; and Atlanta, Georgia.
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.
Additionally, we lease office space in a variety of other metropolitan areas. These locations include, among others, the following: Nashville, 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.
Our 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.
Our staff in Richmond, Virginia is located in an owned building at 501 S 5th Street, where we occupy approximately 310,000 square feet, an owned building located at 901 Semmes Avenue, where we occupy approximately 117,000 square feet; and leased space at 951 E Byrd St., where we occupy approximately 135,000 square feet.
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.
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 42,000 square feet of office space. Our lease for this facility has a term ending August 31, 2025.
Added
As part of a workforce consolidation, we signed a lease for a total of approximately 52,000 square feet in London and have begun relocating employees to the new building. These facilities are used by our International operating segment, including our recent acquisition, OnTheMarket.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Currently, and from time to time, we are involved in litigation incidental to the conduct of our business, including, among others, the legal actions discussed under “Contingencies” in Note 13 “Commitments and Contingencies” of the Notes to our Consolidated Financial Statements.
Biggest changeItem 3. Legal Proceedings Currently, and from time to time, we are involved in litigation incidental to the conduct of our business, including, among others, the legal actions discussed under “Contingencies” in Note 13 “Commitments and Contingencies” of the Notes to our Consolidated Financial Statements included in Part IV of this Report.
Item 4. Mine Safety Disclosures Not Applicable. 34 PART II
Item 4. Mine Safety Disclosures Not Applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
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, • An equal investment in the S&P 500 Internet Services & Infrastructure Index, and • An equal investment in the S&P Composite 1500 Real Estate Index.
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.
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, 2025, there were 1,582 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, 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 following table is a summary of our repurchases of common stock for the quarter ended December 31, 2024: ISSUER PURCHASES OF EQUITY SECURITIES 2024 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 1,008 $ 75.44 — — November 1 through 30 556 $ 73.92 — — December 1 through 31 6,587 $ 76.90 — — Total 8,151 $ 76.51 — — ___________________ (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.
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.
We do not anticipate paying any dividends on our common stock during the foreseeable future, but intend to invest our future earnings, if any, to finance our growth or share repurchases. Recent Issues of Unregistered Securities. We did not issue any unregistered securities during the year ended December 31, 2024. 33 Issuer Purchases of Equity Securities.
Removed
The comparison covers the period beginning December 31, 2018 and ending on December 31, 2023, and assumes the reinvestment of any dividends.
Added
The Company decided to begin comparing the cumulative total return on its common stock with the S&P 1500 Real Estate Index, replacing the S&P 500 Internet Services & Infrastructure Index. The Company believes the S&P 1500 Real Estate Index provides a more accurate, diverse, and useful measure to the Company’s performance.
Removed
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.
Added
For transitional purposes, both indices are included in the performance graph, however, only the S&P 1500 Real Estate Index will be used in future filings. 34 The comparison covers the period beginning December 31, 2019 and ending on December 31, 2024, and assumes the reinvestment of any dividends.
Added
Note that this performance is historical and is not necessarily indicative of future price performance.
Added
Company / Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 CoStar Group, Inc. $ 100.00 $ 154.48 $ 132.09 $ 129.17 $ 146.06 $ 119.66 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 S&P 500 Internet Services & Infrastructure Index 100.00 116.09 133.08 102.47 119.55 121.05 S&P Composite 1500 Real Estate Index 100.00 95.75 137.09 101.00 112.65 118.76 Item 6.

Item 7. Management's Discussion & Analysis

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

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Biggest changeNorth 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..
Biggest changeThe increase in our revenues included: • an increase in Multifamily revenues of $153 million, or 17%, due to an increase in the number of properties listed on our network and increases in pricing for existing customers, • an increase in CoStar revenues of $95 million, or 10%, due to an increase in subscribers and price increases, as well as converting legacy STR customers to our new CoStar-based benchmarking product, • an increase in Residential revenues of $55 million, or 118%, due to the launch of the new Homes.com membership subscriptions and the OnTheMarket Acquisition, partially offset by the discontinuation and reduced sales of certain products and services that were inconsistent with our long-term business strategy, • an increase in LoopNet revenues of $17 million, or 6%, due to an increase in the average price per listing and an increase in the number of paid listings, • a decrease in Information services revenues of $35 million, or 20%, attributable to converting legacy STR customers to our new CoStar-based benchmarking product, partially offset by an increase in revenue from CoStar Real Estate Manager and the Visual Lease Acquisition, and • a decrease in Other marketplaces revenues of $4 million, or 3%, due to lower property volumes auctioned on Ten-X partially offset by increases in revenues of the Land.com Network. 42 Gross Profit and Cost of Revenues.
We are committed to supporting, improving and enhancing our information, analytics and online marketplace solutions, including expanding and improving our offerings for our client base and site users, including property owners, property managers, buyers, commercial tenants and residential renters and buyers.
We are committed to supporting, improving, and enhancing our online marketplace solutions, information, and analytics, including expanding and improving our offerings for our client base and site users, including property owners, property managers, buyers, commercial tenants, and residential renters and buyers.
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 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 expense or income, 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 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.
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 expense or income, net we generate and incur may be useful for investors to consider and may result in current cash inflows and outflows.
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.
However, we do not consider the amount of interest income or expense, net and other expense or income, 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.
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.
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 expense or income, 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.
The accuracy of these judgments may be adversely affected by several factors, including the factors listed below: • Significant underperformance relative to historical or projected future operating results; • Significant changes in the manner of our use of the acquired assets or the strategy for our overall business; • Significant negative industry or economic trends; or • Significant decline in our market capitalization relative to net book value for a sustained period.
The accuracy of these judgments may be adversely affected by several factors, including the factors listed below: • Significant underperformance relative to historical or projected future operating results; • Significant changes in the manner of our use of the acquired assets or the strategy for our overall business; 46 • Significant negative industry or economic trends; or • Significant decline in our market capitalization relative to net book value for a sustained period.
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.
For an in-depth discussion of each of our significant accounting policies, including 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.
We intend to continue to assess the need for additional investments in our business in order to develop and distribute new services and functionality within our current platform or expand the reach of, or otherwise improve, our current service offerings.
We intend to continue to assess the need for additional investments in 37 our business in order to develop and distribute new services and functionality within our current platform or expand the reach of, or otherwise improve, our current service offerings.
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.
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.
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.
There have been no events or changes in circumstances as a result of our qualitative impairment analysis on October 1, 2024, that would indicate that the carrying value of each reporting unit may not be recoverable.
Recent Accounting Pronouncements See Note 2 of the Notes to the Consolidated Financial Statements included in this Report for further discussion of recent accounting pronouncements, including the expected dates of adoption.
Recent Accounting Pronouncements See Note 2 of the Notes to the Consolidated Financial Statements included in Part IV of this Report for further discussion of recent accounting pronouncements, including the expected dates of adoption.
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.
For a comparison of our business segment results of operations for the fiscal year ended December 31, 2023 to the year ended December 31, 2022, 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, 2023, which was filed with the SEC on February 21, 2024.
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.
We recognize subscription revenues on a straight-line basis over the life of the contract. For the years ended December 31, 2024, 2023, and 2022, our annualized net new bookings of subscription-based services on all contracts were approximately $250 million, $286 million, and $305 million, respectively.
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 material cash requirements include the following contractual and other obligations. 44 Debt. As of December 31, 2024, 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 $168.0 million, with $28.0 million payable within 12 months. Leases.
EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income and non-GAAP net income per diluted share are not measurements of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net income or as an indicator of any other measure of performance derived in accordance with GAAP.
EBITDA, adjusted EBITDA, and adjusted EBITDA margin are not measurements of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net income, or as an indicator of any other measure of performance derived in accordance with GAAP.
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 non-GAAP financial measures that we may disclose include EBITDA, adjusted EBITDA, and adjusted EBITDA margin. EBITDA is our net income before interest income or expense, net, other expense or income, net, loss on debt extinguishment, income taxes, depreciation and amortization.
All forward-looking statements are based on information available to us on the date of this filing and we assume no obligation to update such statements, whether as a result of new information, future events or otherwise.
All forward-looking statements are based on information available to us on the date of this filing and we assume no obligation to update such statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.
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.
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.
Liquidity and Capital Resources We believe the balance of cash and cash equivalents, which was $4.7 billion as of December 31, 2024, 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.
Multifamily Apartments.com is the flagship brand of our apartment marketing network of subscription-based advertising services and provides property management companies and landlords with a comprehensive advertising destination for their available rental units and offers renters a platform for searching for available rentals.
Multifamily Apartments.com is the flagship brand of our apartment marketing network of subscription-based advertising services and provides property management companies and landlords with a comprehensive advertising destination for their available rental units.
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 the trailing 12 months ended December 31, 2024, 2023, and 2022, our contract renewal rates for subscription-based services for contracts with a term of at least one year were approximately 89%, 90%, and 90%, respectively; and, therefore, our cancellation rates for those services for the same periods were approximately 11%, 10%, and 10%, respectively.
In calculating EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income and non-GAAP net income per diluted share, we exclude from net income the financial items that we believe should be separately identified to provide additional analysis of the financial components of the day-to-day operation of our business.
In calculating EBITDA, adjusted EBITDA, and adjusted EBITDA margin we exclude from net income the financial items that we believe should be separately identified to provide additional analysis of the financial components of the day-to-day operation of our business.
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 are expanding our Richmond, Virginia campus, which is expected to result in a material cash requirement in 2025 and 2026. We broke ground on the expansion in November 2022 and expect construction to be substantially completed in the first half of 2026.
Adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income and non-GAAP net income per diluted share exclude these charges and provide meaningful information about the operating performance of our business, apart from charges for amortization of acquired intangible assets, depreciation and other amortization, acquisition- and integration-related costs, restructuring costs; settlement and impairment costs incurred outside our ordinary course of business.
Adjusted EBITDA and adjusted EBITDA margin exclude these charges and provide meaningful information about the operating performance of our business, apart from charges for amortization of acquired intangible assets, depreciation and other amortization, acquisition- and integration-related costs, restructuring costs; settlement and impairment costs incurred outside our ordinary course of business.
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.
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, 2024, we had purchase obligations of $244 million, with $94 million payable within 12 months. Construction Commitments.
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.
Revenues from our subscription-based contracts with a term of at least one year were approximately 81%, 82%, and 80% of total revenues for the trailing 12 months ended December 31, 2024, 2023, and 2022, respectively.
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.
We have lease arrangements for office facilities, data centers, and certain vehicles. As of December 31, 2024, we had fixed lease payment obligations of $139 million, with $32 million payable within 12 months. Purchase Obligations.
Also, in the future, we may disclose different non-GAAP financial measures in order to help our investors meaningfully evaluate and compare our results of operations to our previously reported results of operations or to those of other companies in our industry.
Also, in the future, we may disclose different non-GAAP financial measures in order to help our investors meaningfully evaluate and compare our results of operations to our previously reported results of operations or to those of other companies in our industry. We view EBITDA, adjusted EBITDA, and adjusted EBITDA margin as operating performance measures.
The following table provides our revenues by type of service (in millions and as a percentage of total revenue): Year Ended December 31, 2023 2022 2021 CoStar $ 925.2 38 % $ 837.0 38 % $ 722.8 37 % Information services 170.9 7 157.4 7 141.7 7 Multifamily 914.2 37 745.4 34 678.7 35 LoopNet 264.8 11 230.9 11 207.5 11 Residential 46.1 2 73.7 3 74.6 4 Other marketplaces 133.8 5 138.0 6 118.8 6 Total revenues (1)(2) $ 2,455.0 100 % $ 2,182.4 100 % $ 1,944.1 100 % __________________________ (1) For further discussion of our Company, strategy and products, see our business overview set forth in "Item 1.
The following table provides our revenues by type of service (in millions and as a percentage of total revenue): Year Ended December 31, 2024 2023 2022 CoStar $ 1,020.5 37 % $ 925.2 38 % $ 837.0 38 % Information services 135.9 5 170.9 7 157.4 7 Multifamily 1,067.3 39 914.2 37 745.4 34 LoopNet 281.7 10 264.8 11 230.9 11 Residential 100.6 4 46.1 2 73.7 3 Other marketplaces 130.2 5 133.8 5 138.0 6 Total revenues (1)(2) $ 2,736.2 100 % $ 2,455.0 100 % $ 2,182.4 100 % __________________________ (1) For further discussion of our Company, strategy, and products, see our business overview set forth in "Item 1.
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.
To date, we have grown in part by acquiring other companies, and we expect to continue to make acquisitions. Cash and cash equivalents decreased to $4.7 billion as of December 31, 2024, compared to cash and cash equivalents of $5.2 billion as of December 31, 2023.
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.
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.
We may disclose adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income and non-GAAP net income per diluted share on a consolidated basis in our earnings releases, investor conference calls and filings with the SEC. The non-GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies.
Adjusted EBITDA margin represents adjusted EBITDA divided by revenues for the period. We may disclose adjusted EBITDA and adjusted EBITDA margin on a consolidated basis in our earnings releases, investor conference calls, and filings with the SEC. The non-GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies.
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.
As of October 1, 2024, we assessed 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 reporting units were less than the respective carrying amounts.
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.
In addition, investors, securities analysts, and others have regularly relied on EBITDA and may rely on adjusted EBITDA and adjusted EBITDA margin to provide a financial measure by which to compare our operating performance against that of other companies in our industry.
Set forth below are descriptions of additional financial items that have been excluded from EBITDA to calculate adjusted EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to net income: • Stock-based compensation expense may be useful for investors to consider because it represents a portion of the compensation of our employees and executives.
However, we do not consider the amount of the loss on debt extinguishment to be a representative component of the day-to-day operating performance of our business. 39 Set forth below are descriptions of additional financial items that have been excluded from EBITDA to calculate adjusted EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to net income: • Stock-based compensation expense may be useful for investors to consider because it represents a portion of the compensation of our employees and executives.
Investors and potential investors in our securities should not rely on EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income and non-GAAP net income per diluted share as a substitute for any GAAP financial measure, including net income and net income per diluted share.
Investors and potential investors in our securities should not rely on EBITDA, adjusted EBITDA, and adjusted EBITDA margin as a substitute for any GAAP financial measure.
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 Other Marketplaces' revenues for the year ending December 31, 2025 to increase compared to the revenues for the year ended December 31, 2024 due to increased revenues from our Land.com and BizBuySell Networks. 36 Subscription-based Services The majority of our revenue is generated from service offerings that are distributed to our customers under subscription-based agreements that typically renew automatically and have a term of at least one year.
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.
Gross profit increased $214 million, or 11%, to $2.2 billion in 2024, and the gross profit percentage was consistent at 80%. The increase in gross profit was due to higher revenues partially offset by an increase in the cost of revenues.
General and administrative expenses increased $43 million, or 12.6%, to $382 million and, as a percentage of revenues, was consistent at 16%.
General and administrative expenses increased $58 million, or 15%, to $439 million and, as a percentage of revenues, was consistent at 16%.
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.
The decrease in the percentage of our revenue from subscription-based contracts with a term of at least one year from 2023 to 2024 was primarily due to increases in sales of shorter-term Multifamily products.
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.
Revenues from our subscription-based contracts were approximately 96%, 95%, and 93% of total revenues for the years ended December 31, 2024, 2023, and 2022, respectively. The increase in the percentage of our revenues from subscription-based contracts from 2023 to 2024 was due to increased sales in our Multifamily products.
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.
We expect Residential's revenues for the year ending December 31, 2025 to increase, but at a slower rate, compared to the year ended December 31, 2024 due to additional sales of our Homes.com memberships. Other Marketplaces Our other marketplaces include Ten-X, an online auction platform for commercial real estate, our Land.com Network, and our BizBuySell Network.
In addition, we urge investors and potential investors in our securities to carefully review the GAAP financial information included as part of our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q that are filed with the SEC, as well as our quarterly earnings releases, and compare the GAAP financial information with our EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income and non-GAAP net income per diluted share.
In addition, we urge investors and potential investors in our securities to carefully review the GAAP financial information included as part of our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q that are filed with the SEC, as well as our quarterly earnings releases, and compare the GAAP financial information with our EBITDA, adjusted EBITDA, and adjusted EBITDA margin. 38 EBITDA, adjusted EBITDA, and adjusted EBITDA margin may be used by management to internally measure our operating and management performance and may be used by investors as supplemental financial measures to evaluate the performance of our business.
We negotiated various tax incentives with the Commonwealth of Virginia and the City of Richmond including the allowance to use market-based income apportionment for income taxes and partial reimbursements of property tax assessments related to the value of the campus expansion. These incentives are conditional upon achieving job creation and capital expenditure targets from 2022 to 2029.
In conjunction with this expansion, we negotiated various tax incentives with the Commonwealth of Virginia and the City of Richmond, including the allowance to use market-based income apportionment for income taxes and partial reimbursements of property tax assessments related to the value of the campus expansion.
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.
For further discussion of our Company, strategy, and products, see our business overview set forth in "Item 1. 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.
We believe the most directly comparable GAAP financial measures to non-GAAP net income per diluted share and adjusted EBITDA margin are net income per diluted share and net income divided by revenue, respectively.
We believe that the most directly comparable GAAP financial measure to EBITDA and adjusted EBITDA is net income. We believe the most directly comparable GAAP financial measure to adjusted EBITDA margin is net income divided by revenue.
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.
For a comparison of our results of operations for the fiscal year ended December 31, 2023 to the year ended December 31, 2022, 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, 2023, which was filed with the SEC on February 21, 2024. 43 Comparison of Business Segment Results for Year Ended December 31, 2024 and Year Ended December 31, 2023 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.
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.
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. We expect LoopNet's revenue growth rate for the year ending December 31, 2025 to be consistent with the revenue growth rate for the year ended December 31, 2024.
Overview Our principal information, analytics and online marketplace services are described in the following paragraphs by type of service: 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 analytical, risk management, and hospitality benchmarking capabilities.
The following discussion should be read in conjunction with our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, other filings with the SEC, and the consolidated financial statements and related notes included in Part IV of this Report. 35 Overview Our principal online marketplace services, information, and analytics are described in the following paragraphs by type of service: CoStar CoStar is our subscription-based integrated platform for commercial real estate intelligence, which includes information about commercial real estate properties, properties for sale, comparable sales, tenants, space available for lease, industry professionals and their business relationships, industry news and market status and provides benchmarking for the hospitality industry, lease analytical capabilities, and risk management capabilities for lenders.
See 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.
Management compensates for the above-described limitations of using non-GAAP measures by using a non-GAAP measure only to supplement our GAAP results and to provide additional information that is useful to investors to understand the factors and trends affecting our business. 40 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, 2024 2023 2022 Revenues $ 2,736.2 100 % $ 2,455.0 100 % $ 2,182.4 100 % Cost of revenues 558.5 20 491.5 20 414.0 19 Gross profit 2,177.7 80 1,963.5 80 1,768.4 81 Operating expenses: Selling and marketing (excluding customer base amortization) 1,364.3 50 989.9 40 684.2 31 Software development 325.3 12 267.6 11 220.9 10 General and administrative 439.1 16 381.5 16 338.7 16 Customer base amortization 44.3 2 42.2 2 73.6 3 Total operating expenses (1) 2,173.0 79 1,681.2 68 1,317.4 60 Income from operations (1) 4.7 — 282.3 11 451.0 21 Interest income, net 212.5 8 213.6 9 32.1 1 Other (expense) income, net (7.1) — 5.4 — 3.4 — Income before income taxes (1) 210.1 8 501.3 20 486.5 22 Income tax expense 71.4 3 126.6 5 117.0 5 Net income (1) $ 138.7 5 % $ 374.7 15 % $ 369.5 17 % __________________________ (1) Amounts may not foot due to rounding.
Selling and Marketing Expenses . Selling and marketing expenses increased $306 million, or 44.7%, to $990 million and, as a percentage of revenues, increased from 31% to 40%.
Selling and Marketing Expenses . Selling and marketing expenses increased $374 million, or 38%, to $1,364 million and, as a percentage of revenues, increased from 40% to 50%.
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.
We expect CoStar's revenue growth rate for the year ending December 31, 2025 to decelerate compared to the revenue growth rate for the year ended December 31, 2024 primarily due to a lack of benefit from converting legacy STR customers to our new CoStar-based benchmarking product realized in 2024.
The increase included: • an increase in marketing expenses of $244 million for advertising our brands, • an increase in personnel and events costs of $63 million related to rising headcount in our sales force and increases in salaries, bonus, stock-based compensation and benefits costs for our existing employees and Software Development Expenses .
The increase primarily included: • an increase in personnel costs of $43 million related to rising headcount and increases in salaries, stock-based compensation, and benefits costs for our existing employees, • an increase of $9 million in software and equipment costs, and • an increase of $3 million in occupancy costs. General and Administrative Expenses .
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.
These incentives are conditional upon achieving job creation and capital expenditure targets from 2022 to 2029. 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 allowance to use a market-based income apportionment for income taxes is dependent on our taxable income.
(2) Totals may not foot due to rounding. 44 Comparison of Year Ended December 31, 2023 and Year Ended December 31, 2022 The following table provides a comparison of our selected consolidated results of operations for the years ended December 31, 2023 and 2022 (in millions): 2023 2022 Increase (Decrease) Increase (Decrease) Revenues: CoStar $ 925.2 $ 837.0 $ 88.2 10.5 % Information services 170.9 157.4 13.5 8.6 Multifamily 914.2 745.4 168.8 22.6 LoopNet 264.8 230.9 33.9 14.7 Residential 46.1 73.7 (27.6) (37.4) Other marketplaces 133.8 138.0 (4.2) (3.0) Total revenues 2,455.0 2,182.4 272.6 12.5 Cost of revenues 491.5 414.0 77.5 18.7 Gross profit 1,963.5 1,768.4 195.1 11.0 Operating expenses: Selling and marketing (excluding customer base amortization) 989.9 684.2 305.7 44.7 Software development 267.6 220.9 46.7 21.1 General and administrative 381.5 338.7 42.8 12.6 Customer base amortization 42.2 73.6 (31.4) (42.7) Total operating expenses 1,681.2 1,317.4 363.8 27.6 Income from operations 282.3 451.0 (168.7) (37.4) Interest income, net 213.6 32.1 181.5 565.4 Other income, net 5.4 3.4 2.0 58.8 Income before income taxes 501.3 486.5 14.8 3.0 Income tax expense 126.6 117.0 9.6 8.2 Net income $ 374.7 $ 369.5 $ 5.2 1.4 % Revenues.
(2) Totals may not foot due to rounding. 41 Comparison of Year Ended December 31, 2024 and Year Ended December 31, 2023 The following table provides a comparison of our selected consolidated results of operations for the years ended December 31, 2024 and 2023 (in millions): 2024 2023 Increase (Decrease) Increase (Decrease) Revenues: CoStar $ 1,020.5 $ 925.2 $ 95.3 10 % Information services 135.9 170.9 (35.0) (20) Multifamily 1,067.3 914.2 153.1 17 LoopNet 281.7 264.8 16.9 6 Residential 100.6 46.1 54.5 118 Other marketplaces 130.2 133.8 (3.6) (3) Total revenues 2,736.2 2,455.0 281.2 11 Cost of revenues 558.5 491.5 67.0 14 Gross profit 2,177.7 1,963.5 214.2 11 Operating expenses: Selling and marketing (excluding customer base amortization) 1,364.3 989.9 374.4 38 Software development 325.3 267.6 57.7 22 General and administrative 439.1 381.5 57.6 15 Customer base amortization 44.3 42.2 2.1 5 Total operating expenses 2,173.0 1,681.2 491.8 29 Income from operations 4.7 282.3 (277.6) (98) Interest income, net 212.5 213.6 (1.1) (1) Other (expense) income, net (7.1) 5.4 (12.5) NM (1) Income before income taxes 210.1 501.3 (291.2) (58) Income tax expense 71.4 126.6 (55.2) (44) Net income $ 138.7 $ 374.7 $ (236.0) (63) % __________________________ (1) Not meaningful Revenues.
The increase in our revenues included: • an increase in Multifamily revenues of $169 million, or 22.6%, due to higher sales volume driven by an increase in the number of properties listed on our network and increases in pricing on renewals, • an increase in CoStar revenues of $88 million, or 10.5%, 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 $34 million, or 14.7%, due to an increase in the average price for listings, • an increase in Information services revenues of $14 million, or 8.6%, primarily attributable to an increase in revenues for STR of $7 million, CoStar Real Estate Manager of $5 million and $2 million of revenue related to the Business Immo Acquisition, • a decrease in Residential revenues of $28 million, or 37.4%, due to the discontinuation of certain products and services that were inconsistent with our long-term business strategy partially offset by $2 million of revenue related to the OnTheMarket Acquisition and • a decrease in Other marketplaces revenues of $4 million, or 3.0%, due to lower property volumes auctioned on Ten-X partially offset by increases in revenue of Land.com.
North America revenues increased $234 million, or 11%, to $2.6 billion and included: • an increase in Multifamily revenues of $153 million, or 17%, due to an increase in the number of properties listed on our network and increases in pricing for existing customers, • an increase in CoStar revenues of $71 million, or 8%, due to an increase in subscribers and price increases, as well as converting legacy STR customers to our new CoStar-based benchmarking product, • an increase in LoopNet revenues of $16 million, or 6%, due to an increase in the average price per listing and an increase in the number of paid listings, • an increase in Residential revenues of $15 million, or 34%, due to the launch of the new Homes.com membership subscriptions, partially offset by the discontinuation and reduced sales of certain products and services that were inconsistent with our long-term business strategy, • a decrease in Information services revenues of $17 million, or 13%, attributable to converting legacy STR customers to our new CoStar-based benchmarking product, partially offset by an increase in revenue from CoStar Real Estate Manager and the Visual Lease Acquisition, and • a decrease in Other marketplaces revenues of $4 million, or 3%, due to the lower property volumes auctioned on Ten-X, partially offset by an increase in revenue from the Land.com Network.
This network also earns transaction-based revenue primarily from providing online tenant applications, including background and credit checks, and rental payment processing.
In addition, it offers renters a platform for searching for available rentals and earns transaction-based revenue primarily from providing online tenant applications, including background and credit checks, and rental payment processing.
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.
Net cash used in financing activities for the year ended December 31, 2024 was $13.7 million compared to net cash used in financing activities of $3.7 million for the year ended December 31, 2023.
Revenues increased $273 million, or 12.5%, to $2.5 billion.
Revenues increased $281 million, or 11%, to $2.7 billion.
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.
International EBITDA decreased to a loss of $58.5 million for the year ended December 31, 2024 from a loss of $13 million for the year ended December 31, 2023.
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.
Net cash used in investing activities for the year ended December 31, 2024 was $912.9 million compared to $238.6 million for the year ended December 31, 2023.
In addition, while we have used our best estimates based on facts and circumstances available to us at the time, different acceptable assumptions would yield different results. Changes in the accounting estimates are reasonably likely to occur from period to period, which may have a material impact on the presentation of our financial condition and results of operations.
Changes in the accounting estimates are reasonably likely to occur from period to period, which may have a material impact on the presentation of our financial condition and results of operations. We review these estimates and assumptions periodically and reflect the effects of revisions in the period that they are determined to be necessary.
Cost of revenues increased $78 million, or 18.7% to $492 million and, as a percentage of revenues, increased from 19% to 20%.
Cost of revenues increased $67 million, or 14% to $559 million and, as a percentage of revenues, was consistent at 20%.
The decrease in North America EBITDA was primarily due to increases in personnel costs, marketing costs, technology hosting costs, professional service fees, sales events costs, credit loss expense and occupancy costs partially offset by increases in revenues described above.
Segment EBITDA . North America EBITDA decreased to $181.5 million for the year ended December 31, 2024, from $403 million for the year ended December 31, 2023. The decrease in North America EBITDA was primarily due to increases in marketing costs, personnel costs, professional services fees, and web hosting costs, partially offset by increases in revenues described above.
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.
Net cash provided by operating activities for the year ended December 31, 2024 was $392.6 million compared to $489.5 million for the year ended December 31, 2023. The $96.9 million decrease in cash provided by operating activities was primarily driven by a decrease in net income, partially offset by an increase in non-cash expenses and working capital changes.
The increase in cost of revenues included: 45 • an increase in personnel costs of $61 million related to rising headcount to support our residential research efforts, and increases in salaries, bonus, stock-based compensation and benefits costs for our existing employees, • an increase of $25 million in technology costs to host our database and products and • an decrease of $11 million in expenses related to advertising purchased on behalf of customers.
The increase in cost of revenues primarily included: • an increase in personnel costs of $43 million related to increases in salaries and benefits costs for our existing employees and rising headcount to support our residential research efforts, • an increase of $17 million for web hosting costs, and • an increase of $6 million of payment processing fees.
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.
We expect Multifamily's revenue growth rate for the year ending December 31, 2025 to moderate compared to the revenue growth rate for the year ended December 31, 2024, due to the impact in 2025 of pivoting the Apartments.com sales force to support the Homes.com product launch in 2024.
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.
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. As of December 31, 2024, we are obligated to spend an additional $395 million as further work is performed under these contracts.
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.
We expect Information Services' revenue growth rate for the year ending December 31, 2025 to accelerate compared to the revenue growth rate for the year ended December 31, 2024 as a result of the Visual Lease Acquisition.
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.
There can be no assurance as to the timing or number of shares of any repurchases in the future. Our future capital requirements will depend on many factors, including, among others, our operating results, expansion and integration efforts, the Stock Repurchase Program and our level of acquisition activity or other strategic transactions.
Information Services We provide real estate and lease management technology solutions, including lease administration, lease accounting and abstraction services, through our CoStar Real Estate Manager service offerings, as well as portfolio and debt analysis, management and reporting capabilities through our CoStar Risk Analytics service offerings.
Information Services We provide real estate and lease management technology solutions, including lease administration, lease accounting, transaction management, and professional services through our CoStar Real Estate Manager and Visual Lease service offerings. We also provide data and reports on an ad hoc basis to customers in the hospitality industry.
Income tax expense increased $10 million, or 8.2%, to $127 million and the effective tax rate increased 1% to 25% of income before income taxes. The increase in income tax expense was primarily attributable to additional income before income taxes and a benefit recognized in 2022 for state tax credits.
Income tax expense decreased $55 million, or 44%, to $71 million and the effective tax rate was 34% of income before income taxes compared to 25% of income before income taxes for the year ended December 31, 2023. The decrease in income tax expense was primarily attributable to lower U.S. income.
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.
We also plan to begin the integration of the CoStar Real Estate Manager and Visual Lease products. We expect our investment in the sales force will increase our selling and marketing expenses for the year ending December 31, 2025 compared to the year ended December 31, 2024.
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 preparation of these consolidated financial statements requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. While we have used our best estimates based on facts and circumstances available to us at the time, different acceptable assumptions would yield different results.
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.
International revenues increased $47 million, or 53%, to $136 million and primarily included: • an increase in Residential revenues of $39 million due to the OnTheMarket Acquisition, • an increase in CoStar revenues of $24 million, or 61%, due to converting legacy STR customers to our new CoStar-based benchmarking product, as well as an increase in subscribers and price increases, and • a decrease in Information services revenues of $18 million, or 46%, attributable to converting legacy STR customers to our new CoStar-based benchmarking product.
The BizBuySell network provides online marketplaces for businesses and franchises for sale, and THE Land.com network provides online marketplaces for rural land for sale. Other marketplaces' revenues for the year ended December 31, 2023 decreased compared to the year ended December 31, 2022, due to lower Ten-X transaction revenue, partially offset by growth in other products.
The Land.com Network provides online marketplaces for rural lands for sale and BizBuySell Network provides online marketplaces for businesses and franchises for sale.
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 .
Customer Base Amortization Expense . Customer base amortization expense was consistent. Interest Income, Net . Interest income, net was consistent. Other (Expense) Income, Net . Other (expense) income, net was an expense of $7 million for the year ended December 31, 2024 and related to leasing operations acquired in February 2024. Income Tax Expense .
Removed
The following discussion should be read in conjunction with our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the SEC and the consolidated financial statements and related notes included in this Report.
Added
Residential Homes.com offers real estate agents subscription memberships promoting the agent's home listings and profile on our websites. Homebuyers and real estate agents use Homes.com to find dream homes using our proprietary research and neighborhood content combined with listing information. OnTheMarket is a property portal in the U.K., which primarily hosts agents' listings on a subscription basis.

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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 changeFor 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%.
Biggest changeFor the years ended December 31, 2024 and December 31, 2023, revenues denominated in foreign currencies were approximately 5% and 4% of total revenue, respectively. For the years ended December 31, 2024 and December 31, 2023, our revenues would have decreased by approximately $14 million and $10 million, respectively, if the U.S. dollar exchange rate used strengthened by 10%.
In the event that we determine that an asset has been impaired, we would recognize an impairment charge equal to the amount by which the carrying amount of the assets exceeds the fair value of the asset. We continue to monitor these assumptions and their effect on the estimated recoverability of our intangible assets. 50
In the event that we determine that an asset has been impaired, we would recognize an impairment charge equal to the amount by which the carrying amount of the assets exceeds the fair value of the asset. We continue to monitor these assumptions and their effect on the estimated recoverability of our intangible assets.
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We provide online marketplace services, information, and analytics 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.
In addition, we have assets and liabilities denominated in foreign currencies. We currently do not use financial instruments to hedge our exposure to exchange rate fluctuations with respect to our foreign subsidiaries.
In addition, we have assets and liabilities denominated in foreign currencies. We currently 47 do not use financial instruments to hedge our exposure to exchange rate fluctuations with respect to our foreign subsidiaries.
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.
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, 2024.
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.
As of December 31, 2024, 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, 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, 2024 and December 31, 2023, our revenues would have increased by approximately $14 million and $10 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.
We 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.
We are subject to interest rate market risk in connection with our revolving credit facility. On May 20, 2024, we entered into the 2024 Credit Agreement, which provides for variable rate borrowings of up to $1.1 billion. On July 1, 2020, we issued $1.0 billion aggregate principal amount of Senior Notes.
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 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, 2024, accumulated other comprehensive loss included a loss from foreign currency translation adjustments of approximately $25.5 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, 2023. As of December 31, 2023, we had 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, 2024. As of December 31, 2024, we had $4.7 billion of cash and cash equivalents.
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.
See Note 11 of the Notes to the Consolidated Financial Statements included in Part IV of this Report for additional information regarding our 2024 Credit Agreement. We had approximately $3.0 billion of goodwill and intangible assets as of December 31, 2024.

Other CSGP 10-K year-over-year comparisons