$CSGP · COSTAR GROUP, INC.
CoStar Group filed an 8-K reporting Q3 2026 results alongside the announcement of a definitive agreement to acquire Vexcel Group for $730 million in cash. Q3 revenue reached $952M (+14% YoY), Adjusted EBITDA doubled to $229M, and GAAP net income swung to $74M from a $31M loss a year ago. The company raised full-year 2026 Adjusted EBITDA guidance to $820M-$840M and revenue guidance to $3.75B-$3.77B. The Vexcel acquisition adds survey-grade aerial imagery covering 45+ countries and 99.6% of the U.S. population.
- Q3 revenue of $952M, up 14% YoY from $834M; net new bookings were $37M.
- Adjusted EBITDA doubled YoY to $229M, well above the $190M-$210M guidance range.
- GAAP net income swung to $74M from a loss of $31M in Q3 2025; GAAP EPS of $0.18.
- Full-year 2026 Adjusted EBITDA guidance raised to $820M-$840M, a $30M midpoint increase.
- CoStar to acquire aerial imagery provider Vexcel for $730M in cash, subject to HSR and other regulatory approvals.
Extended-hours trading shows CSGP at $28.38, down 11.34% from the $32.01 regular close, despite strong Q3 results and raised guidance. The $730M Vexcel acquisition and Q4 Adjusted EBITDA guidance of $275M-$295M (implying ~29% margin at midpoint) may be weighing on sentiment as the market digests the capital deployment and margin trajectory.
CoStar delivered a rare combination of a major earnings beat, raised guidance, and a transformative $730M acquisition — yet the stock dropped 11% after hours, signaling investor concern about the deal's price tag or cash drain.
CoStar's doubling of Adjusted EBITDA and $150M in cost savings signal a pivot from investment-heavy growth to margin expansion, a theme resonating across real estate data and marketplace peers. The Vexcel deal extends its proprietary data moat in aerial imagery, competing with geospatial data providers serving large tech clients.
The Vexcel acquisition is subject to HSR and foreign regulatory approvals, with a termination date of July 27, 2027; failure to close could disrupt strategy. The $730M all-cash deal reduces CoStar's cash position ($500M as of September 30, 2026) and may require additional financing.