$CSGP · COSTAR GROUP, INC.
CoStar Group filed its Q3 FY2026 10-Q, reporting revenue of $952M (+14.1% YoY), net income of $74M ($0.18 diluted EPS), and gross margin of 77.8%. The company swung from a $31M loss in Q3 2025 to profitability. However, cash and equivalents collapsed to $500M from $1.633B at year-end 2025, reflecting the Zonda acquisition, $670M in stock repurchases, and integration costs. Goodwill rose to $5.428B and intangible assets to $2.062B. The pending Vexcel Acquisition was announced October 26, 2026.
- Q3 revenue $952M (+14.1% YoY), gross margin 77.8%, operating margin 8.8%
- Net income $74M vs. -$31M loss in Q3 2025; nine-month net income $132M vs. -$40M prior year
- Cash and equivalents plunged to $500M from $1.633B at year-end 2025, driven by Zonda acquisition and $670M in stock repurchases
- Residential Real Estate revenue surged 29% to $1.329B YTD, now 48% of total revenue
- Goodwill ballooned to $5.428B from $4.944B, reflecting Zonda and other acquisitions; intangible assets rose to $2.062B
Stock down 13.96% in regular session to $27.54; extended-hours last trade at $27.65 (+0.40% vs close) suggests modest stabilization. The $1.13B cash burn and aggressive M&A integration risk likely spooked investors despite the swing to profitability.
CoStar's cash burn of $1.13B in nine months — funding M&A and buybacks while goodwill hits 53% of total assets — raises solvency questions even as the core business turns profitable.
CoStar's aggressive roll-up strategy — Zonda (residential construction data), Matterport (spatial imaging), Domain (Australian portal), and now Vexcel (aerial imagery) — mirrors IAC/ANGI and Zillow's expansion but with far higher goodwill concentration. Residential revenue now nearly matches Commercial, a structural shift for the historically CRE-focused data giant.
Cash dropped $1.133B in nine months to $500M, with $670M spent on buybacks and the Zonda acquisition closing August 2026. Goodwill now stands at $5.428B (53% of total assets), creating significant impairment risk if acquired businesses underperform. The pending Vexcel Acquisition (announced October 26, 2026) will further strain liquidity.