I'll research CSGP (CoStar Group) before writing the preview. Let me gather recent filings, transcripts, and news.Let me read the most recent (Q1 2026) transcript and release, and check recent news and price action.Let me get recent price action and check for any recent news around the print.A CFO change was announced two weeks before the print — that's material. Let me read it.I now have what I need. Here's the earnings preview.
CoStar heads into Q2 with a fundamentally improving story but a broken stock. Management has pivoted hard from "invest-at-all-costs" to margin expansion — adjusted EBITDA doubled in Q1 and the full-year EBITDA guide was raised — yet shares are down roughly 55% year-to-date (from ~$66 in early January to ~$29 into the print). The gap between operating momentum and sentiment is the central tension. Two things happened in the two weeks before this report that raise the stakes: a surprise CFO change and a stock that has been grinding to new lows. Expect this print to be judged less on the headline (which guidance implies should be fine) and more on net new bookings, Homes.com monetization, and whether the Residential segment actually crosses into profitability.
| Metric | Q2 2026 Guidance | Implied YoY |
|---|---|---|
| Total revenue | $922M – $932M | +18–19% (~10% organic) |
| — Commercial revenue | $479M – $484M | +7–9% |
| — Residential revenue | $443M – $448M | +32–34% (12–14% organic) |
| Adj. EBITDA | $160M – $180M | ~17–19% margin (+~700 bps YoY) |
| — Commercial Adj. EBITDA | $160M – $170M | 34–35% margin |
| — Residential Adj. EBITDA | breakeven to +$10M | first-ever positive quarter |
| Adj. EPS | $0.27 – $0.30 | on 409M shares |
Full-year 2026 framing (reaffirmed/raised in April): revenue $3.78B–$3.82B (+16–18%); Adj. EBITDA raised $30M to $780M–$820M; Adj. EPS $1.32–$1.39. Residential is guided to swing to +$110M–$130M of adjusted EBITDA for the full year, versus deep losses historically. The full-year Adj. EBITDA guide is the number the market will re-benchmark against — watch whether it's raised again given Q1's beat.
This has become the most contested number in the story. Q1 net new bookings were $67M, +20% YoY, but it was the third consecutive sequential decline, and analysts (Meuler/Baird, Nagle/BofA, Tomasello/KBW) pressed management repeatedly on it. Bulls' rebuttal: Q2 is seasonally the strongest quarter because of the June Apartmentalize trade show, and 2025's cadence was lumpy (Q1'25 was only ~18% of full-year bookings, Q2'25 was strong).
This remains the highest-variance part of the model. Key Q1 exit rates to compare against: - 35,175 agent subscribers (+205% YoY adds in Q1), 76% on annual contracts - March ARR run-rate ~$106M (+92% YoY); trailing-12-month ARPU $287 - Q1 Homes.com net new bookings of only $11M - Management is committed to the $550M net investment in Homes.com for 2026 (on track)
The critical new variable: a price increase for new customers took effect May 1, and Florance signaled "the product is currently underpriced" and hinted at measured renewal increases. Q2 is the first quarter to reflect that pricing action. Watch for: (a) whether member adds hold up despite higher prices, and (b) ARPU inflection. Florance also cited an 11x agent ROI ($36,400 incremental commissions vs. ~$3,400 subscription) as the justification — investors will want evidence that this ROI narrative is converting into revenue, not just engagement stats.
Guidance calls for Residential adjusted EBITDA of breakeven to +$10M in Q2, versus –$29M in Q1 and –$85M in the year-ago quarter. This would be a genuine milestone and a key part of the "the strategy is working" thesis. A clean crossover to profitability — alongside Apartments.com's steady double-digit growth — is the single cleanest datapoint to rebuild credibility. A miss here would be damaging given how central it is to the raised full-year guide.
The cash-cow marketplace decelerated to +10% YoY in Q1 (its 15th straight quarter of double-digit growth), with a 99% monthly renewal rate. Management attributes softer ARPU to absorbing lower-end rooftops from the collapse of Rent.com/ApartmentGuide (a "once-in-a-decade" share-shift opportunity) and blames soft overall rental search demand. The question George Tong (Goldman) raised — is 10% the new run-rate or can it re-accelerate? — still stands. Watch depth/ARPU trends and whether Homes.com's rental syndication (already Apartments.com's largest syndication partner) is additive.
On July 13, CoStar announced that CFO Christian Lown is stepping down effective July 31 "to pursue an opportunity outside the Company's industry," with Robin Rossmann (currently MD, Europe) taking over. The framing is telling: Rossmann is credited with cutting ~$51M / ~25% of the European cost structure while still growing double digits, and the release explicitly ties his appointment to "margin expansion and profitable growth" and "disciplined capital allocation." The company was careful to state the departure was not due to any disagreement over operations or practices.
How to read it: the appointment reinforces the message that CoStar is now a margin/cost-discipline story, not a land-grab story. But a CFO transition the same quarter you're trying to rebuild Street credibility introduces execution/communication risk, and some investors will ask why now. Expect questions on the call about capital allocation continuity, whether the 2028/2030 EBITDA targets change, and Rossmann's early priorities.
Despite Q1 being described by management as "an exceptional quarter" (60th straight quarter of double-digit revenue growth, EBITDA doubling, FY EBITDA guide raised), the shares have de-rated sharply all year — from ~$66 in early January to the high-$20s, with a bounce to ~$29 on July 27. The market has essentially stopped paying for the top-line growth story and is demanding proof on (1) bookings durability, (2) Homes.com monetization/ROI, and (3) margin expansion actually flowing through. Sentiment is washed out, which cuts both ways: expectations are low, so a clean beat-and-raise with a bookings step-up could produce an outsized relief rally, while any wobble on Residential profitability or bookings risks confirming the bear thesis.
Note also that the year-long activist campaign is now described as "behind us," which management says had weighed on Homes.com sales and partnerships — so this is the first "clean" quarter without that overhang, and a natural moment for the Street to reassess.
The bar for Q2 is really three yes/no questions: Did bookings step up seasonally? Did Homes.com monetization show up in ARPU/revenue after the May price increase? Did Residential cross into profitability? If the answer is "yes" on all three — plus another EBITDA guide raise — this is a beaten-down, washed-out name with room to re-rate. If bookings disappoint again or Residential slips, the new CFO inherits a credibility problem on day one. Given the ~55% YTD drawdown, positioning is defensive and the risk/reward skews asymmetric toward good news — but the burden of proof is squarely on management this quarter.
(All figures sourced from CoStar's Q1 2026 earnings release and call, its July 13, 2026 CFO announcement, and observed market prices; guidance figures reflect management's April 28, 2026 outlook and are subject to revision on the July 28 call.)