CSGP - Earnings call transcript Q2 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the CoStar Second Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer period. Instructions will be given at that time. [Operator Instructions] Also, today's conference call is being recorded.

to of conference Investor like host, to now President Vice Relations, would turn over the your I Rich Simonelli. ahead. go Please

Rich Simonelli

Thank CoStar to call. and quarter operator, conference Group's XXXX you, second welcome

Scott to Before turn CoStar Founder; I'd interesting some the to over and that Wheeler, I make Andy important your CFO, our day. items call CEO Florance, and share very like and can actually

cause XX, forward-looking actual all, actual portions but recent to subsequent Quarterly that our uncertainties Form of statements, with contain which those corporate the to certain second may on and factors our involve filings our not and Annual of XX-K are Factors. SEC, from and Form outlook First on that results materially in heading July quarter our discussion including Report could results differ Important Risk and include, such release the risks many our limited stated press on most to XXXX, under XX-Q, in today, Reports statements. differ cause results can our company's

events the press our definitions adjusted result and in to forward-looking EBITDA today, the on new to this are are these All on to, EBITDA, to income, in these call, issued statements non-GAAP CoStar detail to of discussed measure and of as no financial this measures along limited information the non-GAAP GAAP net including, but terms. non-GAAP not release call whether most a shown available with directly statements based CoStar future update Reconciliations on information, assumes forward-looking or date otherwise. obligation of comparable guidance,

on available release costargroup.com. is The our website also located press at

broadcast website. conference on in today's color and reminder, live a call is being As our

want today's to I listen replay to to release the to this you're feeling, access refer call. the really again. one how going please So, have a of see

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one remember Just question.

a it make one. good So,

call turn over Florance. Andy now will the I to Andy?

Andy Florance

Thank you, Richard.

Rich Simonelli

You're welcome.

Andy Florance

week is earnings quarter second than the of our the a us Apollo the quarter In CoStar XXth landing, Group's feat XX call. joining slightly. this, for you impressive second million anniversary earnings, for XXXX Thank more slightly

a In was so million had end of our of above Apartments.com has and driver Apartments.com behind bookings, year-over-year total alone revenue of were is ever, increased the the for of second beats. for biggest generating the our the quarter, million, quarter, each net second with prior result first XX%. one the million new the sales. quarter sales second three year-over-year. in quarter XXXX. second net upper was In quarter quarters, up XXXX, revenue new of past quarter of our increase best a up sales bookings XXXX CoStar records much our That's exceptional bookings Apartments.com sales all the XX% this Group year-over-year. XX% Apartments.com company-wide net guidance $X the XXX% better-than-expected an The $XXX sales quarter, $XX in beaten primary We

Apartments.com at sales is. are experience, my sales In was the productivity one is The team quarters those And few level monthly by there the of stunned this big performing when how achieved. you well, numbers the close and get highest we've number repeatedly. is exceptionally ever times operating are very

continue growth revenue this milestone with only that we have milestone billion XX% to From XXXX, next exceptional million in acquisition given rate over This $X.X We Apartments.com Apartments.com revenue for purchased for a to is run opportunity believe to we Apartments.com have reach that quarter. ago expect at rate. annual that major $XX annualized of growth five now, years rate. we every of grown there. point compound We us,

this were in $XXX individual million bookings Net QX subscribers up over the and Suite. to revenue run We was of growth quarter. strong XXX,XXX now CoStar revenue CoStar second the rate year. XX% new Suite from crossed have

find Our Suite are XX.X% US our to and by our right averages. growth revenue line revenue in X.X% core which LoopNet I growth at generated force, for sales core year-over-year with valuable CoStar Premium was is CoStar US CoStar X-year revenue US US of growth CoStar The our average. was the combined it our X-year quarter-over-quarter XX.X%. of X.X% subscriptions. with look Suite quarter-over-quarter is Lister Suite this and our X.X% force, exactly the growth The rate sales year-over-year combination

The X-year average of year-over-year number XX.X%. is above the growth

in acceleration approximately sales that net impact will in months. sales saw three into months into nine XXXX they We LoopNet We now believe XX production. over production going the XXX sales entered that with the LoopNet are end reps new the and with which Premium in reach XXX, are We reps growing will XXX strong support product we CoStar going reps have additional and quarter, the year. We believe the sales bookings. CoStar force, selling hope by of about to quarter-over-quarter. of future up after Lister production. We second hired we XX% We results next bookings

Manager reached level Real year because was high Overall, Real great the Manager as climbed Estate net total XX% XX% XXX%. quarter-over-quarter. dropped increases had so quarter-over-quarter prior of XX% Estate and year-over-year bookings of for year-over-year and booking X% subscription new growth revenue the revenue

up BizBuySell. overlook for not was new XX% of quarter-over-quarter. these business to value Net smaller tremendous Manager Real mid-sized our for marketplaces the for quarter-over-quarter bookings up and bookings sale land lands or businesses Estate and XX% our new was CoStar important It's business net

five had those annualized three revenue businesses This combined $XX of ago, million. quarter years

profitable, in years. more total than $XXX that year the the combined for they had CoStar public. grown They're annual or They revenue a compound This went very quarter, of we XX% revenue times eight annualized times have seven million. rate they impressive really have of and at five growth

with non-reoccurring selling revenue. overall continue We on of to prioritizing comprise selling XX% with over rates grown our revenue. subscription-based revenue services focus and one-off services Subscription-based has high to renewal

billion our revenue on revenue is growth our dollars than XX-month a As overall. second XX-month faster XX% of time, first the subscription trailing trailing the quarter grew year-over-year, And of revenue for a XXXX, we crossed basis. subscription which

We XX% the of of $XX of over million, show an Net $XX XXXX income second was million million, the for quarter EBITDA EBITDA increase income continue for second strong was quarter for XXXX. of in XX% second of versus an for of million net to increase quarter growth profitability. the second the $XX $XX XXXX. quarter

our With than strong sheet ever, is cash and cash $X.X stronger in flow, balance no billion debt. with

away the unique increase As position comScore, highs reported as pull visitors we industry-leading of Apartments.com Internet services to among by continues visits. listing achieving further in from all-time number by our and competition

up get Diamond are the an network valuable, two advertising with given particularly traffic higher is phase. to advertising naming. site ad a soar quarter, and in have meet XX% higher properties very Plus, Today, newly built in leads. very This the even on some the XXX had to advertiser a to have in our the have fee last the package second need there of additional the year-over-year. us. new up results construct with visits, the search level this are selling clients top To delivered three demand, we more tiered creative million submarket. more properties called pay willing placement huge XX% recently begun guarantees renter Apartments.com that years But In we lease-up exposure apartments in The

per million a per paying in month, XXXth our as This exciting second That's $X,XXX some the them. ads with sold point RentPath, of X,XXX price competitor, in our sharp for That media contrast bought if an markets is point. a $X stands approximately we Diamond apartment $XX us. as much advertising Diamond month. in ads Plus quarter, price of communities who In new with at with you primary month social began price Plus [ph] average

I you landscape. everything to you think competitive that need know the tells about

have success offering, no silver the our plus price each little categories. platinum, gold Diamond plan fixed offer plus Given introduce a ads in of to option with of our to We to discounting. we at Plus the decided and

other a We in a In of renters multifamily Campus. paying opportunity with marketplace lives June, Apartments.com online has to Campus near believe in housing students and over annually. housing in lasting universities Off billion a unique are Partners, into rent their student to connection in XX become States. students develop college rent service for parents need approximately the we move United Off million There they're Often stages purchased long $XXX leading with as they assist payments. their these

enters by students, subscription used listing Campus agreements XXX VCU, faculty Off Pennsylvania parents, universities partners of into University Off-Campus an Clemson, exclusive Berkeley, with staff. an it over service Princeton. the two Partners housing universities of has importantly of These and million servicing Harvard, Michigan, Currently, units to all, with and provide of approximately contracts Off-Campus University of students. likes university include exceptional most existing University

independent independent features to as applications, owners. majority market are for and We on which with are who believe to Partners' we excellent tremendous attract and with partner new universities small such next massive us more Off leases more advertisers of advertisers, leasing payments, Apartments.com. digital online that our quarter plan for especially offer this opportunities The candidates screening owners Campus

multifamily We valuable property developers. are believe this investors, very our and to solution. release student CoStar will upgrade housing, analytic also housing information to to be We planning managers, additional a student lenders

Denver Apartments.com National had targets Annual more prospects center in and property visitors and than Apartments.com We Conference clients. managers over attended attracted our was prime of to success held Apartment property in conference with over with at The front Apartments.com who Association Denver. this and presence, force the sales managers by met sales was the It are in May. again, amazing two-day the an course and our XXX strong Once a XX,XXX booth. X,XXX year we

XX,XXX or XXXX, and of just property properties paying a of X As XX,XXX we unit smaller Today, communities in over to properties had unit have we were XX we from paying size Apartments.com XX% units XXX approximately of I XX,XXX range. mentioned, nearly those properties. bought communities Nearly in more. are those

reach We million a from annual million that year. this successfully expect $XX later XXXX in our rate we revenue to run multifamily have $XXX grown to

rate points generation of in lead an In penetration During lead per amazing success and last been year. sales approximately the that the the XX%, story as revenue, our X% accelerating added have about months, salespeople. growth as clients XX been we traffic. Apartments.com basis This increased our penetration more XXX for our average time, to an we industry has six-fold market in or we from truly

in XXX, We to rapidly. build staggering capture and the force a to sales some more to generate on outperformance our high momentum, second increase have from the is reinvest beginning we row. the quarter. into and increase three business XX% of back or the all-time a that sales XXX of incredible year-over-year bookings bookings they quarters a in From performance more to XXX% in This Apartments.com on set fire share our outstanding that plan in last market want to XXXX net went today, reps roughly

size spend Apartments.com clients. they current XX% their time and completely time clients with the the sales have of XX% With existing prospect their available force, to only new of about approximately of for

our X.X% communities we sell As force XX has of sales a made sales only apartment months. reach. that the good thousands our result, are past of new in has contact not there we of the bandwidth to with business that means our yet prospects team hundreds This could to estimate had

and we more believe We increase us the among, other force. need increasing to an apartment based nearly add about Richmond, outbound salespeople, XX% penetration of effectively we add billions size revenue sales to to that XXX plan we of another by dramatically growing things, sales It's our can apartment obvious by so our sales team in into salespeople people. XXX team the XX%

require not investment. do will more this We believe significantly

would offset for to costs eliminating with for was were Atlanta. units by and with didn't for the Apartments.com month managers these ads. have the Those who XXX of availabilities were a on additional finding This researcher year. thousands positions from free. great have tasked place most properties this callers property They we tens added community We headcount that of pay researchers of

see then much the on amount ads include draw property would our we non-paying on generate and Apartments.com, would to valuable traffic renters paid needed more money have and we would ads property no these away. giving content in. our Apartments.com, of which But need to grown this relaunched competing their managers free Internet longer now point, from advertising When enormous those at Given times leads sites. managers, many often this serve listing to ads so first paid we spend over these traffic content below free to

properties. advertisers adding rather by unit X will tens ads virtually researchers. and are that add salespeople, these In than penetration exchanging believe up researchers we'll There the X% in maintained revenue. gigantic. is opportunity community and of mid-sized that is thousands for we more paid of believe apartment by untapped. estimate salespeople have properties XX unit We in opportunity think are we we with by to We range, XXX,XXX The XXX more we and than the we data less end effect, size

successfully we plan further The advertising the level, good there's demand news apartment solution. these this is Apartments.com the feel that a We selling leasing we've tools proven been for so to of at appeal online communities. will to offer our mid-sized

we compelling second achieve into Intensified where lead expect in leadership long-term outperformance position. And than so, area dramatically intend see doing competitors. industry to to a marketing clear and path by durable, is accelerate back share even a the Apartments.com order market reinvest our build to our the to more capture. We a providing flow into ROI our we

millions sheet. and balance do not payments, of way Our more RentPath polar the debt dollars to balance in is they invest sheet do. billion of handcuffed have ability than has lease to our the $X.X and drive tens of for more primary we of interest clients the their with so competitors' is opposite

According and to their been $X.XX it $X. Debtwire, trading a XXXX underscored lien their dropped EBITDA adjusted pressures. second first below cratered, Their has liquidity XX.X% as quarter on it

But XX% the yes, about yielding that holders a to more a a it think the second there could a be capture number year pressure a lien $X.XX value our the year, good order and $X.XX paying lien in lien, holders coupon would knows. was but accelerate competitive second or in lien that investment payment a from likely roughly option and And first there's Given second share. like default, people to who increase believe to debt of default on achieved seems RentPath some $X.XX. bankruptcy until RentPath's about time holders go-way market in

in unique number has not for for to real hard of LoopNet sale million learned one estate way materially a visitors quarter, remains for monetized per we adds LoopNet successful Apartments.com. premium month, or X.X commercial number We're deploying In advertising from does. we've Apartments.com XX% the the second viable clear site year-over-year. work averaged lessons lease. the up properties at LoopNet Historically,

there. allow in enhancements LoopNet revenue We the to significant these future, growth accelerate to our that dramatically us believe will

ads Visually, excellent with We walk-throughs listing premium We're even making We're and are premium, gold, featuring our transportation giving exclusivity the maps, to diamond video. brokerage valuable. platinum [ph] more. and more local information, also and and firm. we're demographic XD adding ads prominence photography,

a XXX addition photographers life researchers architectural our field create LoopNet professional our of who to in content highly the In bring from for our ads. who we're visual efforts to these listings, number process of will buildings skilled adding in

research content original portfolio listings the neighborhoods in the promote the by LoopNet to helping team written located. properties is about adding Our they're

investors. believe improve continue valuable in of adding functionality, appearance content. be target LoopNet's to will The to and we and content audience tenants small landing We're pages

roll-out You new the should head enhancements year over . over as few of to LoopNet months course the next in a

of commercial absolutely the non-existent past years. estate the amazing of being real to digital virtually essential most part CoStar transformation The industry real fortunate critical from news marketing good estate digital real to commercial crossroads has XX of moved Digital an selling at being own an been is for the that I've properties. first-hand necessity, leasing witness a the over real estate we and valuable marketing. or

on brokers estate properties LoopNet audience their of audience audience largest the have this tenants, on to of market CoStar. the largest and needs professional real commercial is. potential investors We The where

past, information researchers' our gathered was them. they primary the value to In our clients for proposition the

the industry we our our business, professionals. the still While value gather offer marketing is is the opportunities platform affords foundation the becoming data proposition prime we of

out to used most of reach to collect our to information. brokers We

and years continue to Listing than adopt come have database. to quarter greater a CoStar of listings updating Listening usage We increase. into who collection Managers over online are continues to listings convenience brokers two all clients XXXX. them bring CoStar CoStar spaces Listing the second in and data we tool, Brokers our listings many by initiated It lower monthly. our were been at added us. now has and methods. power flipped cost users our to Manager to us XX,XXX it's XX% update users much allowing Now directly their historical since Manager to the and online providing are nearly

an users. collaborative transforming move and and been success to more quality we of has We're and This with productive present Richmond is builds amazing with collect Our the immensely relationships our having clients. our data our how data. conversations stronger and increases

research Research and we've in researcher one job our marketing is changes result, recent the Advisor. updating a researchers is Marketing As the made The focus of titles the better now expertise. title to department reflect

establish further collaboration research better significant being research all Richmond consolidated into We believe headquarters, office. among researcher savings. cost Coast synergies to our and as lead are we our teams the as opportunities will Richmond Additionally, marketing East and this

development In Richmond, opportunities efficient additional for research Marketing Research more create research for addition, systems. in opportunities technology this We our the to that most also hand since build creates teams work back-end our build in the and growth systems are hand believe Advisors. our to teams marketing, this career will consolidation

a to we the are Washington relocating positions result, and the Atlanta, in Research multifamily DC positions XXX As Marketing currently Richmond. research in Advisor

to people close will in soon We based Richmond. have XXX

estate quarter of compelling multifamily record. to supply show of large, estate the fundamentals. strength. of and in in the sound the growth. and XXXX, among sectors record a offer to activity volume months low second at of reaching value. the quarter data be returns XXX We digits and in releases high grow. real level And quarters investment XXXX activity remains And sector's rates continues given consecutive real second The single Commercial ongoing on Leasing all believe compared the recent across economy, set Vacancy rank justified interest to the are limited. job strongest rates, US commercial prevailing relative in interest post-war

to growing In XXs. XX delivered of In we're past the housing unprecedented construction. new sector, relates in apartment months apartment and of periods about rely In health property posting this of risen for since tracked seen commercial homebuying the record. vacancy XX rent markets, market the particular, has CoStar units demand to demand. records of the gains States. nearly We Silicon spite their tech longest set turn, the US rate Seattle growth majority shortage tracking housing has new-for-sale the to levels apartment XXX,XXX large on believe enjoyed large to expand the broad and has continue office demand, under apartment to limited response the these below space of In the ongoing once Apartments.com the positive beyond accelerated units. In to units The the XXXX. over not real developments since has level XXX,XXX and units the the the the has of leasing limited led firms XX% consistently first United national supply Valley quarters footprints. again, fallen estate on about In among sector X%. construction apartment insufficient time available, of and as those has

traditional quarter tenants. office Market for Yards San Boston, the Mega Loop have Chicago, and to Francisco New forced in compete New gateway landlords H limited upended NoMa in South impactful. the CBD West in product of Hudson York, at the been in construction and of markets but has DC in and signature Street projects Seaport

digit rates. close centers. trend historically delivery, rent which not remains turn quarter regional driven requires is vacancy ongoing trended set the record. the investors. X%, at same-day result, volume the towards a industrial despite by local high This last quarter In at a population to levels, Deal growth distribution among to As single demand could sector, has second just

from development favor Rent edged have redevelopment industrial bottomed mid-heavy the out potential vacancy low. have investment and sector X%, to for the appear However, to continues above in supply growth the rates infill for X% and to trend product. higher continues [indiscernible] or

the estimates, vacancies lowest headlines all negative types. leading we We are X% industrial in brick-and-mortar sector, prices believe Based obscures store fundamentals. of the by year-by-year, the the shrinking retail on sales superb our below closings rose sector's across property value around In X%, property retail share estimate the types. property-level

help And any multifamily less lenders, construction successful and industry, estate interest To CoStar Group underway estate amounts to current and outcomes and needs in of X% the stock, property real to services the owners, realize of brokers, real offers meet than the climate. products commercial levels economic investors of in complex managers designed with record continue. to

excited we about We've had tremendous great within as with this company. an a exceptional on vision our the XXXX, start second rest of to a extremely to execute continue quarter. year long-term I'm

call will increase quarter who turn this to income over reiterate second. million, for CFO, net other At I will Scott XX% among second $XX over an our the point, things, the was hopefully Wheeler, that the of

in Our best that investors get balance cash all ever with in no quarter with And sheet But and of debt. is we our $XX CoStar ever, very strong million importantly tired sales bookings. about had $X.X million that? hearing what of

Scott Wheeler

I'm people a try cash you, $XX didn't income our will We not Andy. an quarter of our that a sheet to quarter year, going the say That's than to stronger tell million, for in ever, the billion increase in second was I am but going That's have $X.X ever again certainly no just debt. I turned that story. And your our quarter in not that the repeat XX% 'XX. best job. and net $XX second million half terrific is of to with certainly sales balance over also Thank not great of bookings. with we first

be Manager second revenue by remained revenue modest So, Suite the is versus both start last customer of second revenue over XXXX revenue of the and to year-over-year. Revenue year mentioned as of implementation in with of for XXXX. quarter growth me revenue in told in XX% expectations of XX% quarter primarily full the our the grew one-time Information includes that of Real for range Estate XXXX, growth implementations. strong XX% of expected new performance the let growth for rate Revenue Andy quarter. CoStar to XX% XX% XXXX, This at Services growth year-over-year the you quarter our Suite XX% growth we in improvement a XX% result CoStar subscription services. second CoStar of

first accounting The for as our standards. solutions implement new Real Manager growth continued our XXXX companies the Estate exceeded half of expectations, to lease

we we growth Manager Real subscription As half continue slow dates, lease the for but implementation past adoption to rates further Estate to total of expect move the will grow as in accounting revenues year, standard for one-time second revenues decline. the

now slightly Information second a revenue grow rate growth of over range quarter. of the XX% to is rate second to last XXXX, at we which at on remained XXXX, Multifamily for Services XX% is growth XXX our expected expectations. strong a above year-over-year the XX% in basis quarter points higher revenue indicated than basis quarter the

mentioned XXXX were quarter, as in in the expected that we revenues we lapped products have ForRent a and date the fully a duplicative of we our our second As ForRent have growth evident discontinued lower effect acquisition quarter results. and from of last anniversary rate certain negative

exceed With that sales XXXX multifamily range. quarter, growth is the the of quarters rates The in the will strong rates confident revenue and full increasingly XX% to or expected results for meet fourth the third growth year XXXX revenue this XX% XX%. multifamily I'm in

Commercial second land in of XX% year-over-year quarter grew and XXXX. property revenue the

the of growth land commercial XXXX. sale expect upper Accordingly, delivering and we organic to second All expect the in increase in business in are businesses including in and solid property half for XX% we teens, to the year. of the to growth which our lands continue mid XX% for range marketplace year-over-year LoopNet, and

XX% very of Gross cost of leverage. quarter we in is margins result gross XX% in the from a at of XXXX. came This in margins increasing strong first XXXX, achieved quarter slightly second the

second compared $X the the Our first overall the but only gross revenues of year our million now of increased to increased XX% in of full XXXX. revenue for quarter, We margins our cost expect XXXX sequentially. of approximately $XX quarter million

in quarter. the million we the spend XXXX, second marketing quarter of our second expenses expectations, the with line experienced operating Our higher which were $XXX in was for seasonal including

XXXX. adjusted quarter EBITDA of of compared second a million to represents quarter second Our in $XXX adjusted increase $XX XX% of the million EBITDA

Second of revenue above second end guidance $X the midpoint XXX is margins XXXX. driver of adjusted basis basis points positive quarter top the our margin Stronger The was of million XX.X% above range. EBITDA above variances. the XXX we quarter points approximately guidance the our achieved adjusted of XX% range resulting of and main EBITDA the in the was

second increased million or XXXX for of quarter of income compared Net $XX QX $XX the million to XX%, XXXX.

effective tax XX%, benefits quarter share-based with was and Our rate transactions in the payment credits. associated R&D reflecting

does quarter research impact such mentioned. that Andy rate transactions. tax discrete net second Non-GAAP second Non-GAAP include stock-based income expenses for net and Apartments.com million, which for organizational with costs income the share diluted $X.XX compensation, some a XX%, increased XX% payment the to of and adjustments not per changes assumes or and in share-based includes for acquisition-related $XX items as the of restructuring the quarter associated the

in million plans working business integrations. to standard currently financial adjustments. with Campus Apartments.com as We We're acquired for our and Partners $XX post-closing integration June subject well Off approximately as product

financial impact the of material. important, not strategically XXXX our Although statements to the is acquisition for

look for quarter. the we'll some of at performance the metrics Now,

it contributing both absolutely to That's crushed big with Apartments this we year, the in numbers was were NCAA ICSC exceptionally in sales new noted, this of sales Andy the for net talk and quarter. of Andy $XX the in second strong million. our were This about. Conference the quarter, two Real Conference, As sales Estate multifamily. industry conferences to quarter the biggest Also

the with quarter. of future are guidance very across field At force people, end the sales but business growth. sales very which sales on growth happy talked and totaled the our heading. results Suite approximately XXXX, focused that XXX the fluctuations the and and seasonal direction sales, you Suffice sales CoStar reinvesting on quarter-to-quarter, other we the last provide say, in in revenue As we about quarter second we we're of don't given for we're reflecting force long-term know, it to

We or new expect sellers nine force this over typically the to continue growing the year, up productivity the CRE so. next ramping months with sales of

XXXX years was of The a longer annual rate same from in for in rate XX%. five first rate we've XX% on XXXX which the below achieved included second for we the first for X-year in rate quarter renewal quarter contracts subscribers slightly subscribers, was multifamily modest reason first been quarter renewal of QX. of quarter the at line quarter. The who've dilution with the that renewal for the or the customers is XX%, the for is This the

The successfully Subscription this XX% quarter, customer our for in the from revenue network, time accounts Apartments.com ForRent base migrating revenue second the of year. annual and improvements contracts XX% sales strong our result last contracts. on annual of the are up to primarily

I'll year quarter the quarter we third the XXXX. our outlook a and of to to raising the $XX year outlook for discuss $X.XXX Based strong of for the quarter. billion sales year for revenue results, and we XX%, $X.XXX at second by on revenue the the the This XXXX. between XX% and the outlook full midpoint XX% revenue year to now of billion the million range last XX% reflects up for from growth are indicated

to top of in expect of $XXX range for We to million XX%. $XXX the in range line quarter of growth third XXXX XX% the revenue the million, representing

previous full million for the our is XXXX, We the expect relatively $XXX adjusted which $XXX to to year range from of in EBITDA unchanged be of million guidance.

of increased Apartments.com us our of [Indiscernible] As by in XXXX business. half second convinced to exceptionally increased approximately the back reinvest results for market the million. that revenue forecast has and into the time spend strong position marketing Andy now we in is $XX discussed, business the the multifamily our

XX%, the our adjusted year-over-year, with points range. around we approximately year approximately basis up growth of previous the the midpoint guidance, Consistent XX% margins XXX of in adjusted EBITDA for EBITDA expect of

quarter the increase Margins sequentially XXXX, and to of third EBITDA to we million. $XXX $XXX expect of a are For range in the the fourth adjusted expected quarters. million in third

earnings, achieved this great In terms into of on numbers $XX share year per income diluted since based year, of we per growth year per expect net view present $XX.XX, XX% shares. million $XX XX.X EPS over of if to the would XXXX. to full see share coming non-GAAP compounded Certainly which

of range share based to XX.X $X.XX net income diluted million third For the expect of XXXX, we $X.XX, a to non-GAAP quarter on in shares.

XXXX. growth delivered of for continue half increase to first continue expand our level future strong the very well Overall, to CoStar investments margins. a positioned and our We're to of team the trajectory, growth revenue phenomenal

that, the we for open questions. With call will now

Operator

go from with question [Operator ahead. Citi. Peter is Instructions] Please Christiansen Our first

Peter Christiansen

Good turning Is now, that afternoon. right free taking network the lead about, talking for of that are the portion to about happen? ads? is Has And And that And about you've going that is are on those paid were had going happen? success of obviously, happened? think you when What's I there getting the question. that question my ads you expecting to the because you Rich, replay. Thanks Apartments.com is a -- driving shutting for into off Andy, had ads, a then free timeline? of that is growth. kind what I

Andy Florance

So it's in phases. happening

units. [indiscernible] running And of ads at Some it building communities happened. and up were be and XXX at more decide we just Apartments.com And eliminating that, has significant relaunched, we as more number at And and When and folks sign-up properties that more ahead units. for XXX above lead as XXX down. those lose traffic, we sizes XXX free flow. up started first units XXX and level over units, to more we of it content not started for we a units, free keep all to on do go that we ads above bringing on,

will able up over to XXX be we trying of So below generates. that the fast communities leads that and to will the the quickly that, the sales the units, to of that course build remainder be pursue force enough out roll inside year

to will it it be freeze XXX. XX the below be months eliminate flexible, months So to will six but

small time. we -- carry for to the very continue will communities won't some quite for free we Now

So the reiterate that rent, for $XX condo for in million small rent, our stuff. to quarter house second the real bookings. had want to I also And the

Operator

is go And [ph] from our next Brett Stephens. with Please question ahead.

Unidentified Analyst

on Good quarter. a afternoon, guys. Congrats nice

Andy Florance

you, Thank Brett.

Unidentified Analyst

real of can lot the up until But I positives like of look range, we higher. things forward, They've been Great generated. conferences and is, to see in million had one the get quarter. we some bookings around questions bookings be $XX kind this the trend this the a as know should of that the helping. power that kind that

talked to Because sort what guidance, have of you tell little think long-term you. in of Or rate we that sort some about expect know over particularly quarter of out to need give of what look to it year kind guys order the or us it just some you you into As rise. baked those then bit sometime is we number? in you the come down view And about was to out bookings million pricing, in a sort $XX because drivers in can a revenue supporting good? continue if us the time? be, think sustainability probably Street your looks the rise some sales, order it growth Thank this over of maybe million so starting And the how next should to drive of rises, How years. should that? about I the $XX

Andy Florance

Sure.

small in Street to be expectations will XXs I earnings look the But results successful a earnings quarter-to-quarter. try obviously calls. you that So, there to as It the repeat don't exciting. the And fluctuation and number I'm higher of know Like, for call. the nuances very bookings different achieve numbers. excited about throughout forward next we to we are go -- in those give year, from tailwinds will you those things

force driver. not is feel increments. a big I it yes, terribly bookings slight next that it's growing the CoStar it materially, So the comfortable goes goes little up bit. could expectations of a which with And sales no quarter, necessarily There down the Again, But it could a is go up. bit, way shortage little it of opportunity. material, trend, go it

owner advertising in LoopNet, CoStar product, the for the on analytics rates out new student penetration on new there. LoopNet, product lot products So, multifamily housing, opportunity there, taking side, of a

means expectation the sell And give will us a opportunity. marketplace numbers, product would Adding and something the ability communities, would business, CoStar to looking XXX XXX and communities, Real then the to flow. And that unit XX we to, that drive going unit Manager our that additional Apartments.com, communities, lead and XX huge go sell XX land unit communities, communities, at adding business the as is unit XX unit XXX that address hit communities, opportunity. that the continues to is they on we BizBuySell then to marketing, got XX increase to increase also a successfully to the sell unit salespeople And unit the Estate we've salespeople communities, ability all to cylinders.

really tailwinds lot expectations year. shy good those so So, we're and of of there not a next there is

Operator

Our Warmington Fargo. question from comes Please Bill next ahead. with Wells go

Bill Warmington

Good afternoon, everyone.

wanted ask I So, to side. on apartment the

you about small could landlords. for a the solutions bit talk If little the end-to-end digital

roll-out providing what you're there? services The is will QX then going what that going like? to testing, and how be beta look Specifically, the

Andy Florance

Bill. Thank you,

-- my just the a I'm on way that interviewing up that we're I'm on days, Tokyo, tenants landlords little focus lagged. products. for jet to whole So, in going can't I'm to to -- tell of over couple next from if Heading up that on actually new groups you Chicago small be we're

to on for prior applications the their for Apartments.com, end-to-end directly, an lease will solutions. apartment. We to payments screen forward, on can move providing marking property can believe If enter landlords for the an they is can be which Apartments.com move don't a then sorts at on forward the where within digital into these renters of apply facilitate the product solution rent that our Apartments.com online this leasing new smaller criminal with to We credit, using and someone Apartments.com digitally wants landlord them Apartments.com. evictions. have and that tenant elect and wants appealing So, particularly means we leasing, can

price we is half appealing portability providing to be will applications. what the the normal doing it renters think points the and because of an are for online also to our We application typically fees are

use who days. nearly one can instantly So, community a application within same Apartments.com property to that other applies on any XX for renter

pretty focus are think be just one it aggressively big it's going. early. I'm that after we're But know this exciting not going of -- at we quarter. and So, at it's looking we We're is reaction looking we really more will that have think to how really on to out now things a new the We'll just the rolling impact is But it groups. house condo, a units, XX sold the but helpful sector. sales the single folks be running it going where force our XX that in be XX through sell will middle-market, -- will or more And after units. folks inside be units, advertising with inside that us helping the to the they'll

one -- it's added markets. So think I in we out it's more rolling four,

we it's one to will the based rolling we the think how sales five up quarter, markets I in third build of that, it markets team. we And things the finalized quarter. on but in in up that gear additional And want to many. is fourth inside really do haven't

-- intensely, call. there we has portability enough you mass particularly on our scale that the between we'll markets in in multiple we're is energy we -- So, the really enough quarter rolling valuable. tell third the will application more program renter focus that, it But and that's report that out communities on so the people participating in

early. color call, little it was still year-end more we'll man, of on the work. But a It's have On lot it.

Operator

comes Goldman question Sachs. with George next Our ahead. from Tong Please go

George Tong

XX% property after to Commercial from afternoon. to for easier maybe in and decelerated this revenue and at reasons the marketplace? discuss year-ago XQ despite year-over-year quarter land go channel institutional the elaborate good Can growth moderation comps. you efforts Thanks, in on customer XX% LoopNet your

Scott Wheeler

sales or that CoStar Lister numbers the that mentioned force getting. through some And the signature to What talking we so any change aren't So business sales get the Andy The seeing percent this on moved still the quarter in million is for a only Premium is the big. the we're really good forecast ads. these outlook, of we're LoopNet, sales because -- George, you sell or sales to the about, and $X you're business. we still $X and really continue differences strong LoopNet million

little You off. fluctuations back quarter-to-quarter, get does different then get higher in sometimes a they which cancels or from

half. take So and in momentum depending we the cautious a create on the the of about going tend force forecast changes positive that timing and second But the still out. to more those, very we're we're how sales can making tweak approach

Andy Florance

has of diamond is rolled which platinum out there, couple the initiative coming big gold, the really quarters. premium our effectively not will Also, be in and that and levels, next

we're big together. pulling So, having conference a

on leaders revenue not so And sales LoopNet. the beginning be selling a and for seeing you're stream, upside. there walk those ads sales like that revenue now future that's are to any Apartments.com senior process with Our will through associated right

Operator

comes Our Ryan sorry, -- go Tom KBW. I'm ahead. next question Please from [ph] with

Unidentified Analyst

what are that color interest targeting on existing if are Hi, sales process, a effort on the recent taking can year-to-date owner force you comment do a education be the your Andy, is growth? there reach a think and in quickly the to the process? following more give so, clients gradual launch. of everyone. go-to-market terms rebranding align very LoopNet us Will you broker with focus this partnering your valuable for any if and of question education or you some rightsized And of just this perhaps sales owner more And be the today. client? efficiencies will Thanks the in for in more strategy focus,

Andy Florance

Sure.

owner ready bit LoopNet of ads, a premier ads. across the training. prospects of sort of owner-oriented couple was, selling folks top CoStar we've is, pulling about together XX them upper things network, and people one these going order sales reorganizing them. the sales we more identified for to We're did we've I our for days So, detail not the And who mention, assigning force are get end done the the in on a been have what into senior to of were

haven't haven't to that bookings we'll take that pretty over to one team XX success and with But at adoption that a this little that think success force sales not pick value specialist relying process. will and The And the them forward. there, So feel proposition want A to be our of we little that or XX that. a I with -- would be time grow is really success pretty think beginning bit up straightforward. take quickly the will really number I lot that will on step pick, the we we expect numbers. is time. I right we'll quite We're done of probably salespeople would bit. people a relatively get we the far It's straightforward. just we'll

And about or and to allowing for part second partnering our broker, owner rebates with had there it advertising And them the clients clients partnered broker the clients them we everybody, our some brokerage some resell is a volume. ads resell discussions owner those us. you offer LoopNet with about clients have happens to our is and the wholesale allow and their we've with basically for of discounts that In similar It's The exciting. mentioned to some give to win-win to them past, Apartments.com. owners. with broker what

an advertisement selling and an the owner. a owner to don't we're volume when price of are. through acting often for just who for gets an their Greystar, is So, Greystar authorized purchase know community, better they on they're apartment make But Greystar behalf we really who

for something it's looking be that But like be we'd And from thing and year. folks we've positive really but that Again, happening gotten same be LoopNet, So, opportunity. some next will others feedback not in would to it on the CBRE of sales -- happen clients Real are unprecedented. like CoStar lot labeling folks Wakefield, white not a also but Real JLL who Estate there CBRE Apartments.com is our CoStar only on from Estate into the basically Manager. & Manager where their steer side, and Cushman CoStar, and

Rich Simonelli

coverage. you. have Thanks for joining Glad And to thanks us, Ryan. for starting

Operator

Jeffrey is ahead. question from next with Our SunTrust. Please Andrew go

Andrew Jeffrey

Good afternoon. bookings missed number. that I

So…

Andy Florance

million. $XX was It

Andrew Jeffrey

get to offline. We'll the

Andy Florance

asking. for you Thank

Just under million. $XX

not So, saying. we're

Andrew Jeffrey

It's we're of sauce I the what economy. -- as things productivity. about of strikes gating do building These of items to expand simple I continually a sale. terms sort sales? are being to are seriousness, is a from kind the force bit out little in secret speak products your really mean, not to you without organization? I build you Yes. mean, full the In from outside sales at in think. about a of can we me continuing and sophisticated worry what's tell sacrificing able that success employment the Can looking you've would fairly the one sales what the had all

Andy Florance

a changes my typically, concern that is are lot. organization me, for we an Well, primary

exactly same refocusing gating just the refocusing And probably thing in the biggest info item. LoopNet an and ad leasing, side, So, the They and big change sales don't change our a to XX of Most heavy online as requires Things years we to opportunity communities the salespeople lot a lifting, -- -- that's organizations single do lot. change. a that's that's organization same. for sales a towards we like that new against adopt in that's smaller the don't out. the team stay

have couple they a and high-quality we've salespeople. to a having with coming with door to being meeting companies tech not on about of find talking challenges we other able some and yesterday. CES salespeople those seen Knock hiring people good pipeline been the of keep were were wood, We really in was able problems folks. at I and

So, plus also the recent feel confident you I XX CoStar lot a can We invest that and hires going there. in the -- in on see to then And the I marketplace. we're side. into be -- hiring Richmond Richmond.

there big been in a have our and we've successful hiring meeting brand there. We requirements

ongoing improve our and sales developing So, to we're give to looking try to more always them experiences training. training try and

be And that with productivity we team, seeing, if can -- right But result. Apartments.com the now. we'll we through happy exceptional per the productivity sales an that is through keep numbers salesperson. going we're really numbers like inside

the Apartments organization, teams main issue That's CoStar So and just management into is lines. things the reshaping dividing main challenge. the the like separate the continuously

Operator

Our Please William next Stephen Blair. from go question comes with Sheldon ahead.

Unidentified Analyst

on [ph] Stephen. Josh for actually is This thanks. Great,

if us few on But could hoping was is guys you opportunity Over years over X.X. helpful the demand you in of years. a high you quarters, last are Thanks. bigger frame I ads see LoopNet what kind view points three Apartments you environment? main have what the and data occupancy provided the the upsell the some for higher-priced or And next two time, factors the driving for there's

Andy Florance

like which Yes. children favorite would of my and ask, my that's are a -- one. you I and tough

respect are lead And in traffic in weeks It's focus who weeks massive we're two like or the lead property -- out and a traffic hearing, and is looking are there our a in they're Dallas, Uptown it's more -- units stand are hand is than three bird is in flow. two and have have that Buffett. like the And awesome say, And up-sell, of delivering average they where to and fire for been folks the and to What's Warren But Apartments.com driving bush. better Apartments.com adopting both when you $XXX, the what's in just a $X,XXX now in there demand I'd they're Diamond to LoopNet that in of We've it's lot say working. out you lot flow. group, ago have the putting rapidly, So, I price month is was we one finding is of on a new the when got to ad upside. happening. to is awesome lease-up. hard building buying points you trends see had managers in spend out. in $X,XXX now on to say, stand everybody more Dallas going right Like at new and

in we $X,XXX and so with you people Apartments.com, lease-up, people higher really lease-up so buying think in majority are And in our don't they $XXX the the for a at what's with the cost to or launch them willing they their nine-month care community for ad when period And $XX,XXX. many pay a about if million of demand stake source as communities. are more. They're a

our very very fork happy want they they're And and our if kept low. and our price our is we've out they're it. aggressive frankly, -- with price kept to pricing lead per willing we've lease very And So, more, per money.

these categories, we're a within online within again sort to will we mid-market -- enable silver, lot upside just categories where generate out to after we tools And pay to going then the and bringing leasing going are platinum So higher revenue. be diamond, is, the the of people the I plus think will and gold, big.

but optimistic it's that LoopNet It's in confident area highly development. feel it. with it -- is like early about, a very very remain But about opportunity days. it's familiar and and everything clear still I'm still we're about LoopNet,

Operator

go from J.P. question Sterling Morgan. ahead. next Auty comes Please Our with

Sterling Auty

Hi, on really you appreciate all detail guys. we And Thanks. the -- gave Yes. the call. that

you in versus from of is much. at of CoStar year-over-year, Quick subscriber? that to in question you on the the of estimate But increases way look I growth is the When average much you would count know best it So, you us maybe thank gave increase put how per the a Suite. subscribers. how rough user growth coming very number characterize? revenue

Andy Florance

is per little a average new a There in increase user. There slight Most of it subscribers. is point more. bit price is

bringing So, a them list, we're getting at of underpriced little the thoughtful the -- looking little and closer, list. we're some all about closer more a not bringing being bit the little way we up dramatically up a in are accounts

So, talking X%. X% I'd is a has say the bit of shifting or X% more be average mixing nothing in bit but a than crazy. little past -- price been instead is mix We're increase, price shift between the point. that it there of might about little the It's

Sterling Auty

Got it. Thank you.

Operator

next Pat ahead. Securities. Please with Our go question is JMP from Walravens

Joe Goodwin

is Pat. this on Hi, for Joe Goodwin

provide M&A? after can Andy, for the CoStar quick a you And I question environment another do how's commentary then to more question. have us that. Just Any there.

Andy Florance

very like? what a So, There's environment active. going it's was question the lot -- does there. we're on So M&A look

given probably any at closely at -- a are We companies. dozen point, looking we're

to We be are selective, continue being selective.

we So working through it. not a doesn't that deals way. But rational have valuation us, sloppy we're appear if we pipeline do to are and doing any to be

careful having we of acquisitions, not ways of are our the we to and things change any not Off some But like very goose. make we big deals acquisitions. -- have until be is record great going to XX track continuing in And is occur But continue again, And as it larger then don't a there they some XX Campus across forward. to pipeline. they Partners good go there we're acquisitions some smaller because of occur will

Operator

go from Scott FBR. question next B.Riley from Our ahead. is Please Buck

Scott Buck

the some activity afternoon, balances climb cash of Thanks. how I'm see we a continue point to bit quarter some And a there. maybe guys. you at uses? follow-up quarter, repurchase prioritizing A or are dividend? will Good after watching potential

Andy Florance

Scott. Thanks,

discussions money are Our as in big out to priorities going Clearly, our still much to as positive right spend but the we're pipeline net now that see put use just to we generate to is possible. acquisitions. cash, putting love back cash. intention into about, that rational and know acquisition into now. organic deals the right on more that But they're we We'd price marketplace back there some they're enough talked

considering we there holding as of so that. dividends we're now for and think when better have not share of be just using much do marketplace to time, then the Right growing it we'll a it's any So, buybacks transformation, near-term opportunity it it this some matter still is digital is or I those in that opportunities.

Operator

[Operator Instructions]

Andy Florance

you getting again you third the together with in to And thank for joining thank for much. we and Well, second Great. quarter. the all look quarter us call you forward very

Operator

that conclude our gentlemen, does today. AT&T. for for and participation conference for Thank and ladies And you your using

You may now disconnect.

CoStar (CSGP) 23 Jul 192019 Q2 Earnings call transcript