Business Wire | Jul 28, 2020 04:16PM EDT

CoStar Group Second Quarter 2020 Revenues Increase 16% Year-over-Year with June Sales Reaching All Time Record of $22 Million While Cash Position Exceeds $3.5 Billion

Jul. 28, 2020

WASHINGTON--(BUSINESS WIRE)--Jul. 28, 2020--CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, announced today that revenue for the quarter ended June 30, 2020, was $397 million, an increase of 16% over revenue of $344 million for the second quarter of 2019. Net income for the second quarter of 2020 was $60 million, or $1.60 per diluted share. Adjusted EBITDA (which excludes stock-based compensation, acquisition and integration related costs and other items as described below) for the second quarter of 2020 was $129 million, an increase of 17% compared to adjusted EBITDA of $110 million for the second quarter of 2019.

"Our team delivered an outstanding set of results in the second quarter as we grew revenue 16%, increased adjusted EBITDA by 17%, set a record sales month, raised $2.7 billion dollars in the equity and debt markets and acquired Ten-X - all while working 100% from remote locations," said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. "Our results indicate that our business is not only resilient but is in fact clearly countercyclical. Traffic to our Apartments.com and LoopNet marketplaces are at record levels, exceeding pre-pandemic levels. We had 62 million monthly unique visitors on our platforms in the second quarter, an increase of 13% over our record traffic levels of 55 million monthly unique visitors reached in the first quarter of 2020."

Florance continued, "We generated company-wide net new sales bookings of $35 million in the second quarter of 2020, with sales levels increasing each month to a record $22 million of annualized net new sales in June. Our Apartments.com platform delivered record sales, traffic and revenue in the second quarter, once again demonstrating that our solutions are mission critical to our clients, and even more so in an environment of limited person-to-person contact. Our increased brand marketing campaign is producing strong results, generating over three billion impressions in the second quarter, an increase of 57% over the second quarter of 2019. Our investment to create higher levels of brand awareness is driving record sales results."

Year 2019-2020 Quarterly Results - Unaudited

(in millions, except per share data)

2019 2020

Q1 Q2 Q3 Q4 Q1 Q2



Revenues $328 $344 $353 $375 $392 $397

Net income 85 63 79 88 73 60

Net income per share - diluted 2.33 1.73 2.15 2.39 1.98 1.60

Weighted average outstanding shares - 36.6 36.6 36.7 36.7 36.8 37.7diluted



EBITDA 113 94 113 125 100 109

Adjusted EBITDA 125 110 129 142 124 129

Non-GAAP net income 92 82 96 103 90 88

Non-GAAP net income per share - diluted 2.53 2.23 2.61 2.82 2.44 2.34



Non-GAAP net income (which excludes amortization of acquired intangible assets, stock-based compensation and other items as described below) for the second quarter of 2020 was $88 million or $2.34 per diluted share.

2020 Outlook

With our strong financial results in the second quarter and the initial disruption from the COVID-19 pandemic behind us, we are reinstating guidance for the full year 2020.

The Company expects revenue in the range of $1.63 billion to $1.64 billion for the full year of 2020, representing growth of approximately 17% for the year. This guidance includes an estimated partial year 2020 revenue contribution from Ten-X of $25 to $30 million. We expect revenue for the third quarter of 2020 in the range of $415 million to $420 million, representing revenue growth of 18% year-over-year at the midpoint of the range.

The Company expects adjusted EBITDA in a range of $515 million to $525 million for the full year of 2020, an increase of 3% at the midpoint of the range compared to 2019. Ten-X is not expected to have a material impact on adjusted EBITDA in the second half of 2020. For the third quarter of 2020, the Company expects adjusted EBITDA in a range of $120 million to $125 million.

We expect full-year 2020 non-GAAP net income per diluted share in a range of $9.22 to $9.42 based on 38.3 million shares. For the third quarter of 2020, we expect non-GAAP net income per diluted share in a range of $2.00 to $2.10 based on 39.4 million shares. These ranges include an estimated non-GAAP tax rate of 25% for the full year and the third quarter.

The preceding guidance does not include any operating results from the proposed RentPath acquisition.

The preceding forward-looking statements reflect CoStar Group's expectations as of July 28, 2020, including forward-looking non-GAAP financial measures on a consolidated basis, based on current estimates, expectations, observations and trends. Given the risk factors, rapidly evolving economic environment, and uncertainties and assumptions discussed in this release and in our quarterly reports on Form 10-Q and annual reports on Form 10-K, including uncertainties as a result of the COVID-19 pandemic and responses to it by, and the impact on, global economies, actual results may differ materially. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.

Reconciliation of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share to their GAAP basis results are shown in detail below, along with definitions for those terms. A reconciliation of forward-looking non-GAAP guidance to the most directly comparable GAAP measure, net income, can be found within the tables included in this release.

Non-GAAP Financial Measures

For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Company's financial condition and results of operations, please refer to the Company's latest periodic report.

EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before interest (expense) income and other (expense) income, loss on debt extinguishment, income taxes, depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before stock-based compensation expense, acquisition- and integration-related costs for pending and completed acquisitions, restructuring costs, and settlements and impairments incurred outside the Company's normal course of business.

Non-GAAP net income is a non-GAAP financial measure determined by adjusting GAAP net income attributable to CoStar Group for stock-based compensation expense, acquisition- and integration-related costs for pending and completed acquisitions, restructuring costs, settlement and impairment costs incurred outside the Company's normal course of business and loss on debt extinguishment, as well as amortization of acquired intangible assets and other related costs, and then subtracting an assumed provision for income taxes. In 2020, the Company is assuming a 25% tax rate in order to approximate our statutory corporate tax rate excluding the impact of discrete items.

Non-GAAP net income per diluted share is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period used in the calculation of GAAP net income per diluted share. For periods with GAAP net losses and non-GAAP net income, the weighted average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.

Earnings Conference Call

Management will conduct a conference call at 5:00 PM EDT on Tuesday, July 28, 2020 to discuss earnings results for the second quarter 2020 and the Company's outlook. The audio portion of the conference call will be broadcast live over the Internet at investors.costargroup.com. To join the conference call by telephone, please dial (833) 714-0936 (from the United States and Canada) or +1 778 560 2890 (from all other countries) and refer to access code 9066087. The webcast replay will also be available in the Investor section of CoStar Group's website for a period of time following the call.

CoStar Group, Inc.

Condensed Consolidated Statements of Operations - Unaudited

(in thousands, except per share data)



Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019



Revenues $ 397,159 $ 343,760 $ 789,006 $ 672,185

Cost of revenues 74,040 71,918 152,949 143,071

Gross profit 323,119 271,842 636,057 529,114



Operating expenses:

Selling and marketing(excluding customer base 130,461 119,075 255,568 207,169amortization)

Software development 39,001 28,455 80,611 56,383

General and administrative 57,403 42,337 116,276 82,413

Customer base amortization 14,935 7,175 26,419 14,857

241,800 197,042 478,874 360,822



Income from operations 81,319 74,800 157,183 168,292

Interest (expense) income (3,596 ) 4,678 (1,945 ) 8,890

Other (expense) income (474 ) 538 367 539

Income before income taxes 77,249 80,016 155,605 177,721

Income tax expense 16,889 16,768 22,452 29,304

Net income $ 60,360 $ 63,248 $ 133,153 $ 148,417



Net income per share - basic $ 1.61 $ 1.74 $ 3.60 $ 4.09

Net income per share - diluted $ 1.60 $ 1.73 $ 3.57 $ 4.06



Weighted average outstanding 37,524 36,310 36,998 36,273shares - basic

Weighted average outstanding 37,734 36,627 37,256 36,597shares - diluted



CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures - Unaudited

(in thousands, except per share data)



Reconciliation of Net Income to Non-GAAP Net Income



Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net income $ 60,360 $ 63,248 $ 133,153 $ 148,417

Income tax expense 16,889 16,768 22,452 29,304

Income before income 77,249 80,016 155,605 177,721 taxes

Amortization of acquired 20,989 12,208 38,478 25,403 intangible assets

Stock-based compensation 9,527 13,816 24,707 25,845 expense

Acquisition andintegration related 10,031 492 18,744 741 costs

Restructuring and - 2,180 - 2,248 related costs

Non-GAAP income before 117,796 108,712 237,534 231,958 income taxes

Assumed rate for income 25 % 25 % 25 % 25 %tax expense *

Assumed provision for (29,449 ) (27,178 ) (59,384 ) (57,989 )income tax expense

Non-GAAP net income $ 88,347 $ 81,534 $ 178,150 $ 173,969



Net income per share - $ 1.60 $ 1.73 $ 3.57 $ 4.06 diluted

Non-GAAP net income per $ 2.34 $ 2.23 $ 4.78 $ 4.75 share - diluted



Weighted averageoutstanding shares - 37,524 36,310 36,998 36,273 basic

Weighted averageoutstanding shares - 37,734 36,627 37,256 36,597 diluted



* A 25% tax rate is assumed for 2020 and 2019, which approximates our statutorycorporate tax rate.



Reconciliation of Net Income to EBITDA and Adjusted EBITDA



Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net income $ 60,360 $ 63,248 $ 133,153 $ 148,417

Amortization of acquiredintangible assets in 6,054 5,033 12,059 10,546 cost of revenues

Amortization of acquiredintangible assets in 14,935 7,175 26,419 14,857 operating expenses

Depreciation and other 6,990 6,546 13,757 13,010 amortization

Interest expense 3,596 (4,678 ) 1,945 (8,890 )(income)

Other expense (income) 474 (538 ) (367 ) (539 )

Income tax expense 16,889 16,768 22,452 29,304

EBITDA $ 109,298 $ 93,554 $ 209,418 $ 206,705

Stock-based compensation 9,527 13,816 24,707 25,845 expense

Acquisition andintegration related 10,031 492 18,744 741 costs

Restructuring and - 2,180 - 2,248 related costs

Adjusted EBITDA $ 128,856 $ 110,042 $ 252,869 $ 235,539



CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)



June 30, December 31, 2020 2019

ASSETS

Current assets:

Cash, cash equivalents and restricted cash $ 3,548,405 $ 1,070,731

Accounts receivable 127,030 96,788

Less: Allowance for credit losses (13,363 ) (4,548 )

Accounts receivable, net 113,667 92,240

Prepaid expenses and other current assets 28,576 36,194

Total current assets 3,690,648 1,199,165



Long-term investments - 10,070

Deferred income taxes, net 4,372 5,408

Property and equipment, net 104,316 107,529

Lease right-of-use assets 112,641 115,084

Goodwill 2,009,117 1,882,020

Intangible assets, net 437,550 421,196

Deferred commission costs, net 91,712 89,374

Deposits and other assets 13,868 9,232

Income tax receivable 14,806 14,908

Total assets $ 6,479,030 $ 3,853,986



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 26,864 $ 7,640

Accrued wages and commissions 56,748 53,087

Accrued expenses 45,726 38,680

Income taxes payable 22,764 10,705

Lease liabilities 30,905 29,670

Deferred revenue 80,358 67,274

Total current liabilities 263,365 207,056



Long-term debt 745,000 -

Deferred income taxes, net 93,934 87,096

Income taxes payable 20,738 20,521

Lease and other long-term liabilities 131,672 133,720

Total liabilities $ 1,254,709 $ 448,393



Total CoStar, Inc. stockholders' equity 5,224,321 3,405,593

Total liabilities and stockholders' equity $ 6,479,030 $ 3,853,986



CoStar Group, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)



Six Months Ended June 30,

2020 2019

Operating activities:

Net income $ 133,153 $ 148,417

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 52,235 38,413

Amortization of deferred commissions costs 29,662 25,550

Amortization of debt issuance costs 508 438

Realized loss on investments 541 -

Non-cash lease expense 12,400 10,859

Stock-based compensation expense 24,053 25,845

Deferred income taxes, net 3,569 6,359

Credit loss expense 15,688 5,224

Foreign currency, net (789 ) -

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable (37,364 ) (10,898 )

Income taxes payable 12,328 (5,577 )

Prepaid expenses and other current assets 4,371 1,751

Deferred commissions (32,122 ) (33,397 )

Other assets (6,757 ) 236

Accounts payable and other liabilities 37,793 22,691

Lease liabilities (14,126 ) (12,977 )

Deferred revenue 13,503 10,633

Net cash provided by operating activities 248,646 233,567



Investing activities:

Proceeds from sale and settlement of investments 10,259 -

Purchases of property and equipment and other (12,782 ) (14,387 )assets

Cash paid for acquisitions, net of cash acquired (184,502 ) (13,721 )

Net cash used in investing activities (187,025 ) (28,108 )



Financing activities:

Proceeds from long-term debt 745,000 -

Repurchase of restricted stock to satisfy tax (33,653 ) (24,225 )withholding obligations

Proceeds from equity offering, net of transaction 1,690,148 - costs

Proceeds from exercise of stock options and 16,513 16,695 employee stock purchase plan

Other financing activities (1,650 ) (123 )

Net cash provided by (used in) financing 2,416,358 (7,653 )activities



Effect of foreign currency exchange rates on cash (305 ) (410 )and cash equivalents

Net increase in cash, cash equivalents and 2,477,674 197,396 restricted cash

Cash, cash equivalents and restricted cash at the 1,070,731 1,100,416 beginning of period

Cash, cash equivalents and restricted cash at the $ 3,548,405 $ 1,297,812 end of period



CoStar Group, Inc.

Disaggregated Revenues - Unaudited

(in thousands)



Three Months Ended June 30,

2020 2019

North International Total North International Total America America

Information and analytics

CoStar Suite $ 157,793 $ 7,260 $ 165,053 $ 145,910 $ 6,915 $ 152,825

Information 25,022 5,514 30,536 18,659 2,118 20,777services

Online marketplaces

Multifamily 145,541 - 145,541 120,488 - 120,488

Commercialproperty and 56,006 23 56,029 49,505 165 49,670land

Total $ 384,362 $ 12,797 $ 397,159 $ 334,562 $ 9,198 $ 343,760revenues





Six Months Ended June 30,

2020 2019

North International Total North International Total America America

Information and analytics

CoStar Suite $ 315,128 $ 14,881 $ 330,009 $ 286,883 $ 13,643 $ 300,526

Information 50,712 12,206 62,918 35,250 4,377 39,627services

Online marketplaces

Multifamily 283,001 - 283,001 234,756 - 234,756

Commercialproperty and 112,968 110 113,078 96,910 366 97,276land

Total $ 761,809 $ 27,197 $ 789,006 $ 653,799 $ 18,386 $ 672,185revenues



CoStar Group, Inc.

Results of Segments - Unaudited

(in thousands)



Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

EBITDA

North America $ 112,292 $ 95,001 $ 214,705 $ 210,269

International (2,994 ) (1,447 ) (5,287 ) (3,564 )

Total EBITDA $ 109,298 $ 93,554 $ 209,418 $ 206,705



CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures with 2019-2020 Quarterly Results- Unaudited

(in millions, except per share data)



Reconciliation of Net Income to Non-GAAP Net Income



2019 2020

Q1 Q2 Q3 Q4 Q1 Q2



Net income $85.2 $63.2 $78.6 $87.9 $72.8 $60.4

Income tax 12.5 16.8 20.3 26.4 5.6 16.9 expense

Income before 97.7 80.0 98.9 114.3 78.4 77.2 income taxes

Amortizationof acquired 13.2 12.2 12.5 17.4 17.5 21.0 intangibleassets

Stock-basedcompensation 12.0 13.8 13.1 13.3 15.2 9.5 expense

Acquisitionand 0.2 0.5 2.3 3.7 8.7 10.0 integrationrelated costs

Restructuringand related 0.1 2.2 0.8 - - - costs

Settlementsand - - - (10.8 ) - - impairments

Non-GAAPincome before 123.2 108.7 127.6 137.9 119.8 117.7 income taxes

Assumed ratefor income tax 25 % 25 % 25 % 25 % 25 % 25 %expense *

Assumedprovision for (30.8 ) (27.2 ) (31.9 ) (34.5 ) (30.0 ) (29.4 )income taxexpense

Non-GAAP net $92.4 $81.5 $95.7 $103.4 $89.8 $88.3 income



Non-GAAP netincome per $2.53 $2.23 $2.61 $2.82 $2.44 $2.34 share -diluted



Weightedaverage 36.2 36.3 36.3 36.4 36.5 37.5 outstandingshares - basic

Weightedaverageoutstanding 36.6 36.6 36.7 36.7 36.8 37.7 shares -diluted



* A 25% tax rate is assumed for 2020 and 2019, which approximates our statutorycorporate tax rate.



Reconciliation of Net Income to EBITDA and Adjusted EBITDA



2019 2020

Q1 Q2 Q3 Q4 Q1 Q2



Net income $85.2 $63.2 $78.6 $87.9 $72.8 $60.4

Amortizationof acquired 13.2 12.2 12.5 17.4 17.5 21.0 intangibleassets

Depreciationand other 6.5 6.5 6.3 6.5 6.8 7.0 amortization

Interest(income) (4.2 ) (4.7 ) (4.4 ) (3.4 ) (1.7 ) 3.6 expense

Other (income) - (0.5 ) (0.2 ) (9.9 ) (0.8 ) 0.4 expense

Income tax 12.5 16.8 20.3 26.4 5.6 16.9 expense

EBITDA $113.2 $93.5 $113.0 $124.9 $100.2 $109.3

Stock-basedcompensation 12.0 13.8 13.1 13.3 15.1 9.5 expense

Acquisitionand 0.2 0.5 2.3 3.7 8.7 10.0 integrationrelated costs

Restructuringand related 0.1 2.2 0.8 - - - costs

Adjusted $125.5 $110.0 $129.2 $141.9 $124.0 $128.8 EBITDA



CoStar Group, Inc.

Reconciliation of Forward-Looking Guidance - Unaudited

(in thousands, except per share data)



Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income



Guidance Range

For the Three Months For the Twelve Months

Ended September 30, 2020 Ended December 31, 2020

Low High Low High



Net income $ 39,000 $ 45,000 $ 239,000 $ 250,000

Income tax expense 10,000 11,000 53,000 56,000

Income before income 49,000 56,000 292,000 306,000 taxes

Amortization of acquired 25,000 25,000 87,000 87,000 intangible assets

Stock-based compensation 15,000 14,000 55,000 53,000 expense

Acquisition and 16,000 15,000 37,000 35,000 integration related costs

Non-GAAP income before 105,000 110,000 471,000 481,000 income taxes

Assumed rate for income 25 % 25 % 25 % 25 %tax expense *

Assumed provision for (26,300 ) (27,400 ) (118,000 ) (120,300 )income tax expense

Non-GAAP net income $ 78,700 $ 82,600 $ 353,000 $ 360,700



Net income per share - $ 0.99 $ 1.14 $ 6.24 $ 6.53 diluted

Non-GAAP net income per $ 2.00 $ 2.10 $ 9.22 $ 9.42 share - diluted



Weighted averageoutstanding shares - 39,400 39,400 38,300 38,300 diluted



* A 25% tax rate is assumed, which approximates our statutory corporate taxrate.



Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA



Guidance Range Guidance Range

For the Three Months For the Twelve Months

Ended September 30, 2020 Ended December 31, 2020

Low High Low High

Net income $ 39,000 $ 45,000 $ 239,000 $ 250,000

Amortization of acquired 25,000 25,000 87,000 87,000 intangible assets

Depreciation and other 7,000 7,000 27,000 27,000 amortization

Interest and other 8,000 8,000 17,000 17,000 expense, net

Income tax expense 10,000 11,000 53,000 56,000

Stock-based compensation 15,000 14,000 55,000 53,000 expense

Acquisition and 16,000 15,000 37,000 35,000 integration related costs

Adjusted EBITDA $ 120,000 $ 125,000 $ 515,000 $ 525,000



About CoStar Group, Inc.

CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality sector. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online with over 7 million monthly unique visitors. Realla is the UK's most comprehensive commercial property digital marketplace. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. CoStar Group's websites attracted an average of approximately 62 million unique monthly visitors in aggregate in the second quarter of 2020. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe, Canada and Asia with a staff of over 4,200 worldwide, including the industry's largest professional research organization. For more information, visit www.costargroup.com.

This news release and the Company's earnings conference call contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about CoStar's plans, objectives, expectations, beliefs and intentions and other statements including words such as "hope," "anticipate," "may," "believe," "expect," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or other comparable terminology. Such statements are based upon the current beliefs and expectations of management of CoStar and are subject to many risks and uncertainties. Actual results may differ materially from the results anticipated in the forward-looking statements and the assumptions and estimates used as a basis for the forward-looking statements. The following factors, among others, could cause or contribute to such differences: uncertainty surrounding the impact of the COVID-19 pandemic, including volatility in the international and U.S. economy, worker absenteeism or decreased productivity, quarantines or other travel or health-related restrictions; the length and severity of the COVID-19 pandemic; the pace of recovery following the COVID-19 pandemic; government and private actions taken to control the spread of COVID-19; the risk that the trends stated or implied by this release or in the earnings conference call cannot or will not be sustained at the current pace or may increase or decrease, including trends related to revenue, net income, non-GAAP net income, EBITDA, adjusted EBITDA, site traffic and visitors, sales, renewal rates, impressions and brand awareness; the risk that the Company is unable to sustain current revenue, earnings and net new sales bookings growth rates or increase them; the risk that CoStar and Ten-X cannot be combined successfully or that the acquisition does not produce the expected results; the risk that Ten-X's auction platform is not combined into the Company's product offerings when and as expected; the risk that the Company's estimated results for Ten-X, including partial year 2020 revenue contribution and adjusted EBITDA impact in the second half of 2020 will not be as expected and stated in this release; the risk that revenues for the third quarter and full year 2020 will not be as stated in this press release; the risk that net income for the third quarter and full year 2020 will not be as stated in this press release; the risk that adjusted EBITDA for the third quarter and full year 2020 will not be as stated in this press release; the risk that non-GAAP net income and non-GAAP net income per diluted share for the third quarter and full year 2020 will not be as stated in this press release; the risk that the tax rate estimates stated in this press release may change; the possibility that the Company's investment plans or strategy may change; and the possibility that the acquisition of RentPath does not close when expected or at all. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including in CoStar's Annual Report on Form 10-K for the year ended December 31, 2019, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, as well as CoStar's other filings with the SEC available at the SEC's website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200728005985/en/

CONTACT: Scott Wheeler Chief Financial Officer (202) 336-6920 swheeler@costar.com

CONTACT: Sarah Spray Vice President Investor Relations (202) 346-6394 sspray@costar.com