CoStar Posts a Record Third Quarter and Raises Guidance, but Shares Fall After Hours

CoStar Group reported record third-quarter revenue of $952 million on Oct. 27 and raised its full-year guidance, but its shares fell sharply after hours.

CoStar Group reported third-quarter 2026 results on Oct. 27, 2026, after the market close. The quarter ended Sept. 30, 2026.

Revenue was $952 million, up 14% from $834 million a year earlier. The company called it a record third quarter.

That revenue cleared the $946 million consensus in StockStory's tally. StockStory is the one consensus tally named in this article.

Profit swung as costs fell

Reported net income was $74 million, or $0.18 a share. A year earlier the company lost $31 million, or $0.07 a share.

Adjusted earnings, which strip out items management does not treat as core, were $0.38 a share. StockStory's tally put the consensus at $0.34 a share.

Adjusted net income was $153 million, up from $96 million a year earlier. Reported operating income was $84 million, against a $51 million operating loss.

Adjusted EBITDA was $229 million, double the year-earlier level. Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, with adjustments.

That result was considerably above the high end of the company's $190 million to $210 million guidance range. Operating expenses fell to $657 million from $713 million.

"Adjusted EBITDA doubled year-over-year and was considerably above the high end of our $190 million to $210 million guidance range," Founder and Chief Executive Andy Florance said.

Residential drove the improvement

Residential Real Estate revenue was $460 million, up 23% from a year earlier. Commercial Real Estate revenue was $492 million, up 7%.

Residential adjusted EBITDA swung to a positive $49 million from a $69 million loss. That $118 million swing more than accounted for the companywide increase.

Within commercial, CoStar revenue was $344 million and LoopNet revenue was $89 million. Other Commercial Real Estate revenue fell to $59 million.

Gross profit was $741 million, but gross margin narrowed to 77.8% from 79.4%. Cost of revenue rose faster than sales in the quarter.

Net new bookings were $37 million in the quarter. The company cautions that bookings are not directly comparable to revenue.

Guidance rose for the year

CoStar raised full-year 2026 revenue guidance to $3.75 billion to $3.77 billion. The prior range, set in July, was $3.715 billion to $3.755 billion.

Full-year adjusted EBITDA guidance rose to $820 million to $840 million. Adjusted earnings guidance rose to $1.38 to $1.41 a share.

Fourth-quarter revenue guidance is $976 million to $996 million. StockStory's tally described the $986 million midpoint as roughly in line with expectations.

Fourth-quarter adjusted EBITDA guidance is $275 million to $295 million. Adjusted earnings guidance for the quarter is $0.46 to $0.50 a share.

Management cited about $150 million of anticipated 2026 cost savings versus original guidance. A deeper expense review identified at least $200 million more over the next 12 to 18 months.

Those savings keep the company on track for its 2028 adjusted EBITDA target of $1.25 billion, management said. The target is a company goal, not a result.

Operating cash flow for the first nine months was $455 million, up from $268 million. Cash ended September at $500 million, after $789 million of acquisition spending and $668 million of repurchases.

Shares fell despite the raise

Investors focused on what the raise did not change. StockStory reported shares tumbled 9.7% to $28.87 immediately after the report.

The release does not explain the after-hours move, and this article does not assign it a cause. The quarter beat tallies, and the full-year outlook rose.

What remains unknown

What remains unknown is whether residential profitability holds after its first strong quarters. Commercial adjusted EBITDA slipped to $180 million from $183 million.

Also unknown is how much of the identified $200 million in further savings will actually be realized. Management expects them over 12 to 18 months, without sacrificing revenue growth.

What to watch is fourth-quarter delivery against the $976 million to $996 million guide. The verified record is clear: a record quarter, a raised outlook, and a falling stock.