← back to rankingCSGP · CoStar Group, Inc.
Real Estate - Services · mkt cap $13.7B · calls: Q1 FY2026 vs Q4 FY2025
69.0 conviction · conf-adj 66
conf 3/10 partial
enthusiasm:27.0 · trend:0 · quantifies:5 · impact:0 · under_radar:5 · credibility:12 · business_impact:8 · disruption:0 · commitment:6 · confirmation:6
Enthusiasm latest 9 / prev 9 (flat)
CoStar’s AI thesis is that proprietary real estate data plus vertical AI interfaces can lift engagement, lead volume, workflow automation, and cost efficiency across Homes.com, Apartments.com, CoStar, Debt Solutions, Real Estate Manager, and Matterport. The thesis is credible because management gives repeated product-specific examples and quantifies engagement gains, though direct revenue attribution remains mostly implied rather than cleanly isolated.
GROUNDED NEXT-FY IMPACT vs CONSENSUS
Grounded on actual base — revenue $3.2B · net income $0.0B · net margin 0.2% · diluted EPS 0.0166
These are next-fiscal-year annual uplift estimates, not next-quarter numbers.
Aggregate next-FY est. rev uplift: 0.0% · next-FY EPS uplift: 3.46% · vs analysts: inline · priced in: medium (model's call-read: high; verdict above is the hard-data one used for ranking) · confidence: 3/10
| Claim | Figure | Arithmetic | Next-FY Rev % | Next-FY EPS % |
|---|
Homes AI search engagement (4x searches, 7x favorites, 7x leads)
engagement · soft | ~4x searches, 7x favorites, 7x leads (AI vs non-AI users) | Top-of-funnel engagement multiples (4x=+300%, 7x=+600%). No disclosed Homes.com membership base, ARPU, take-rate or lead->revenue conversion, so cannot be monetized into revenue/EPS. | | |
Homes AI time on site (18m vs 4m32s)
engagement · soft | 18:00 vs 4:32 (~3.97x) | 1080s/272s=3.97x (+297%). Engagement depth only; no ARPU/conversion base disclosed to map to revenue. | | |
Homes AI time-on-site multiple (~4x longer)
engagement · soft | ~4x longer | Restates the time-on-site multiple; no monetization base disclosed. | | |
Apartments.com Smart Search engagement (+94% time, +63% listings)
engagement · soft | 94% more time on site; 63% more listings viewed | Renter engagement uplift; Apartments.com is a real revenue line but no per-user revenue/take-rate/conversion disclosed to convert engagement into incremental revenue. | | |
Adj. EBITDA outperformance partly from AI efficiencies ($132M; $17M above guidance high-end)
cost | $132M adj EBITDA (2x YoY); $17M above high end of guidance | $17M Q1 beat attributed primarily to lower personnel costs / efficiencies from AI, personnel and other. Two defensible sizings averaged: (X) full $17M, not annualized, after-tax $13.43M / FY25 adj consensus NI $360.9M = 3.72%; (Y) ~1/3 AI-attributed = $5.7M/qtr, annualized $22.7M, after-tax $17.9M / FY26 consensus adj NI $566.7M = 3.2%. Mean ~3.46%. Topline ~0 (cost claim). Sized off adjusted base, NOT GAAP NI ($7M) which is distorted by the operating loss and would yield a meaningless triple-digit %. | 0 | 3.46 |
Homes AI first-week time on site (16m50s vs 4m24s)
engagement · soft | 16:50 vs 4:24 (~3.83x) | 1010s/264s=3.83x (+283%). Early-launch engagement metric; no monetization base. | | |
Homes AI first-week engagement (4x searches, 7x favorites, 4x views, 7x leads)
engagement · soft | ~4x/7x/4x/7x | First-week engagement multiples (4x=+300%, 7x=+600%); same unmonetized funnel lift as the ongoing claim. | | |
Homes AI token-cost optimization (2,000 -> 20 tokens)
cost · soft | 100x per-query token reduction (99% cut) | 2000/20=100x; (2000-20)/2000=99% per-query inference-cost cut, but absolute AI/inference spend not disclosed and immaterial to EPS for a $3.2B-revenue firm. No $ base obtainable. | | |
AI image-tagging creates hundreds of billions of searchable data fields
other · soft | hundreds of billions of new data fields | Data-asset/product-quality claim; quantifies field volume, not revenue, pricing or cost saving. No monetization base. | | |
Assumptions: Tax rate 21%. All claims are ADOPTER-side (AI improves CoStar's own products/engagement/costs); no supplier-side AI-compute revenue exists. Only the adj-EBITDA claim carries a usable $ figure; its EPS uplift is the mean of two defensible sizings (full-$17M-not-annualized vs ~1/3-AI-annualized) = ~3.46%. EPS is sized against the ADJUSTED earnings base consensus uses, NOT GAAP NI ($7M / thin margin, distorted by the operating loss), which would print a meaningless triple-digit %. Every engagement claim (Homes AI / Smart Search multiples) is top-of-funnel with no disclosed membership/ARPU/take-rate/conversion base, so none can be translated into revenue and all stay soft.
Top line: No hard next-FY revenue uplift is calculable. The AI story is overwhelmingly engagement-side: Homes AI users run ~4x searches, 7x favorites/leads and spend ~18m vs 4m32s (~3.97x); Apartments.com Smart Search renters spend +94% time and view +63% listings. These are genuine funnel improvements but management disclosed no membership base, ARPU, take-rate or lead->revenue conversion, so none can be flowed to a revenue line — real but unmonetized upside.
Bottom line: The only anchorable dollar impact is bottom-line. Q1 FY26 adj EBITDA was $132M (2x YoY), $17M above guidance high-end, attributed primarily to lower personnel costs from AI + personnel + other. Averaging the two defensible sizings yields ~3.46% of adjusted consensus net income. Token-cost optimization (2,000->20 tokens, 99% per-query cut) reinforces the cost narrative but is immaterial in absolute dollars.
Consensus already models a steep margin/EPS ramp the AI cost efficiencies feed into: net margin ~11% (FY25) rising toward ~15-17% (FY26-27), with adjusted EPS roughly $0.84 -> $1.36 (+62%) -> $1.78. The doubling of adj EBITDA and AI-driven personnel savings are exactly the kind of efficiency that the ~+62% FY26 EPS growth already embeds. The anchorable AI EPS contribution (~3.46%) is small relative to that ramp and is based on a Q1 result already public, so it does not move the thesis beyond what's priced in.
MODEL CONSENSUS (impact)
partial
Agree fully on adopter-side, all-soft engagement, GAAP-base rejection, inline/high verdicts. Differ only on EBITDA EPS magnitude (averaged) and rev null-vs-0 (chose conservative 0).
Conflicts reconciled
- est_eps_uplift_pct: X=3.72 vs Y=3.2 -> used 3.46 (average; both methods defensible — X full-$17M/FY25-base, Y 1/3-AI-annualized/FY26-base)
- est_rev_uplift_pct: X=0 vs Y=null -> used 0 (conservative: do not credit unmonetized engagement with quantifiable revenue)
- supplier_rev_uplift_pct: X=0 vs Y=null -> used 0 (no supplier-side AI revenue exists)
- EBITDA eps_uplift_pct: X=3.72 vs Y=3.2 -> used 3.46 average
| Field | Opus 4.8 | GPT-5.5 |
|---|
| Rev uplift % | – | 0 |
| EPS uplift % | 3.2 | 3.72 |
| Priced in | high | high |
| vs analysts | inline | inline |
| Confidence | 4 | 3 |
| Top line | Effectively unquantifiable from disclosure. CoStar's AI story is overwhelmingly engagement-side — Homes AI users run ~4x searches, 7x favorites/leads and spend ~18m vs 4m32s; Smart Search renters spend +94% time and view +63% listings. These are real funnel improvements but management disclosed NO membership base, ARPU, take-rate or lead->revenue conversion, so none can be flowed to a revenue line. est_rev_uplift_pct = null (not zero — genuine but unmonetized upside, the speculative wildcard if Homes.com/Apartments.com membership conversion follows engagement). | No hard next-FY revenue uplift is calculable. The strongest topline evidence is engagement: Homes AI users show roughly 3.97x time on site and 7x leads, while Apartments.com Smart Search users spend 94% more time and view 63% more listings, but none has a disclosed revenue conversion base. |
| Bottom line | The only anchorable dollar impact is bottom-line. Q1 FY26 adj EBITDA was $132M (2x YoY), $17M above guidance high-end, attributed PRIMARILY to lower personnel costs from AI + personnel + other initiatives. Taking ~1/3 as AI-specific, annualized and after-tax = ~$17.9M, i.e. ~3.2% of consensus FY26 adjusted net income ($566.7M). Sized off GAAP NI ($7M) this would print a meaningless triple-digit %, so it's deliberately referenced to the adjusted base consensus uses. Token-cost optimization (2,000->20 tokens) reinforces the cost narrative but is immaterial in absolute dollars. | The only hard dollar bridge is the $17M Q1 FY2026 adjusted EBITDA guidance beat tied partly to AI/personnel/other efficiencies. After tax, $17M * 79% = $13.43M, equal to 3.72% of FY2025 adjusted consensus net income. Token optimization is operationally large at 99% fewer tokens per optimized query, but token spend is undisclosed. |
| Reasoning | Consensus already models a steep margin/EPS ramp that the AI cost efficiencies feed into: net margin 11.1% (FY25) -> 14.9% (FY26) -> 17.0% (FY27), with adjusted EPS $0.84 -> $1.36 (+62.5%) -> $1.78 (+30.5%). The doubling of adj EBITDA and AI-driven personnel savings are exactly the kind of efficiency that ~+62% FY26 EPS growth already embeds. My anchorable AI EPS contribution (~3.2%) is small relative to that ramp and does not point above it. The engagement multiples are large but generate no quantifiable revenue gap vs consensus, so they don't move the priced-in read. Net: hard math is consistent with (not ahead of) consensus -> priced_in high. | Consensus already models FY2026 revenue of $3.801993868B, up $554.993868M or 17.09% from the $3.247B FY2025 base, and FY2026 net income of $566.703936M, up $205.819062M or 57.03% from FY2025 adjusted consensus net income. The only hard AI-related bottom-line item counted here is $13.43M after tax, or 2.37% of FY2026 consensus net income, far smaller than the consensus earnings step-up and based on a Q1 result already public. |
Rows highlighted where the two models disagreed.
QUANTIFICATIONS
Homes AI search engagement: nearly 4x searches, 7x favorites, 7x leads (Q1 FY2026, topline)
“AI users run nearly 4x as many searches, favorite 7x as many properties and submit 7x as many leads.”
Homes AI time on site: 18 minutes vs 4 minutes, 32 seconds (April 2026, topline)
“In April, time on site reached 18 minutes for AI users versus 4 minutes, 32 seconds for non-AI users.”
Homes AI time on site multiple: roughly 4x longer (April 2026, topline)
“Put plainly, when consumers experience Homes AI, they spend roughly 4x longer than they do on conventional residential search.”
Apartments.com Smart Search engagement: 94% more time on site; 63% more listings viewed (Q1 FY2026, topline)
“Renters who use Smart Search spend 94% more time on site and view 63% more listings.”
Adjusted EBITDA outperformance tied partly to AI efficiencies: $132 million adjusted EBITDA; doubled year-over-year; $17 million above high end of guidance (Q1 FY2026, bottomline)
“In the first quarter of 2026, we delivered $132 million of adjusted EBITDA, doubling the adjusted EBITDA from the first quarter of 2025 and $17 million above the high end of our guidance range. The outperformance in adjusted EBITDA was primarily due to lower personnel costs from cost-saving efforts as we continue to find efficiencies from AI, personnel and other expense initiatives.”
Homes AI first-week time on site: 16 minutes, 50 seconds vs 4 minutes, 24 seconds (first week post release, Q4 FY2025, topline)
“Site visitors that hit the AI mode are on the site for 16 minutes, 50 seconds as opposed to 4 minutes, 24 seconds for nonusers.”
Homes AI first-week engagement: nearly 4x searches, 7x favorites, 4x properties viewed, 7x e-mail leads (first week post release, Q4 FY2025, topline)
“AI users do nearly 4x as many searches, favorite 7x as many properties, look at 4x as many properties, and submit 7x as many e-mail leads.”
Homes AI token cost optimization: 2,000 tokens optimized to 20 tokens (Q4 FY2025, bottomline)
“Using dynamic example injection, queries that originally consumed 2,000 tokens have been optimized to just 20 tokens.”
AI-created searchable data fields from image tagging: hundreds of billions of new searchable, displayable and model-ready data fields (Q4 FY2025, topline)
“The agentic tagging of our photographs creates hundreds of billions of new searchable, displayable and model-ready data fields.”
PAST (realized)
- Q1 FY2026, Andrew Florance: "Real Estate Manager added AI lease abstraction capabilities to the Visual Lease platform this quarter, and we will extend these capabilities to CoStar Real Estate Manager later this year."
- Q1 FY2026, Andrew Florance: "In Q1, Apartments.com introduced Smart Search, our natural language search feature and the first AI-powered voice search in multifamily."
- Q1 FY2026, Andrew Florance: "Our new March ad showcased Homes AI in action, and I have received more positive feedback on this campaign than any of our prior Homes.com campaigns."
- Q4 FY2025, Andrew Florance: "Last week, we launched the game-changing Homes AI, which we believe is the best-in-class and first fully integrated proprietary vertical real estate application built upon the best strengths of the leading LLMs."
- Q4 FY2025, Andrew Florance: "In the first week post release, Homes AI is having a huge impact on user engagement."
CURRENT (now)
- Q1 FY2026, Andrew Florance: "Across the platform, debt solutions is actively building these AI-enhanced workflows."
- Q1 FY2026, Andrew Florance: "We're also deploying multiple AI agents internally to accelerate customer onboarding, support enablement and the automation of repeatable professional services work."
- Q1 FY2026, Andrew Florance: "Homes AI is the engine behind this engagement search."
- Q1 FY2026, Christian Lown: "The outperformance in adjusted EBITDA was primarily due to lower personnel costs from cost-saving efforts as we continue to find efficiencies from AI, personnel and other expense initiatives."
- Q4 FY2025, Andrew Florance: "CoStar Group is emerging as a clear winner in the artificial intelligence era."
- Q4 FY2025, Andrew Florance: "We are using AI to cut significant costs and improve our product offerings and quality."
FORWARD (guidance)
- Q1 FY2026, Andrew Florance: "Matterport is already a key component of Homes AI and will unlock huge future AI innovation all across CoStar Group."
- Q1 FY2026, Andrew Florance: "Ahead of the June Apartmentalize trade show that NAA hosts, the big show of the year, we will launch Apartments AI, our pioneering conversational search experience built on the same technology powering Homes AI."
- Q1 FY2026, Andrew Florance: "In Q2, we'll continue building AI search functionality as we progress towards integrating OnTheMarket into the Homes.com software environment in 2027."
- Q4 FY2025, Andrew Florance: "While we're launching the capability of Homes.com, we plan to deploy it to Apartments.com, CoStar, LoopNet, Land, BizBuySell as soon as possible."
- Q4 FY2025, Andrew Florance: "I believe that our deployment of this advanced AI software will result in substantial competitive advantage for CoStar Group for years to come."
- Q4 FY2025, Christian Lown: "Importantly, AI will feature prominently as we use it to extract rents, lease terms and other data from leases to create benchmark solutions, and we will also provide this functionality to our customers for automated lease abstraction and audit purposes."
TRACK RECORD — PROMISE vs DELIVERY
70/100 track record delivers 6 calls reviewed
CoStar's quantified AI commitments are recent (Q3 FY2025 onward), but the ones that have come due — AI voice/Smart Search on Homes.com and Apartments.com and AI lease abstraction — were shipped with only minor slippage, while the larger bets (rent benchmark, debt and loan-origination benchmarking) remain ahead of their dates; the small judgeable track record so far skews toward delivering.
AI-powered voice/natural-language search to launch on Homes.com and Apartments.com 'later this year' (2025) — promised Q2 FY2025
delivered Homes.com AI Smart Search shipped Q3 FY2025 with strong engagement lift; Apartments.com Smart Search/voice launched Q1 FY2026 — delivered, Apartments side slipped ~1 quarter
Invest 50% of Homes.com software development effort from Q4'25 onward into AI-empowered features (its single biggest dev commitment) — promised Q3 FY2025
delivered By Q1 FY2026 Homes AI is the central engine of the portal (AI users spend ~4x longer) and the $550M 2026 Homes net-investment target was reaffirmed, consistent with the commitment
Add AI-powered lease abstraction to Real Estate Manager / Visual Lease — promised Q4 FY2025
partial Q1 FY2026: AI lease abstraction added to Visual Lease that quarter, with CoStar Real Estate Manager extension promised later in 2026
Deliver CoStar rent benchmark — AI-extracted net effective rents — in Q2 FY2026 — promised Q4 FY2025
too-early Q1 FY2026 reaffirmed it 'launches this summer'; timeframe not yet arrived
Launch CRE debt benchmarking (AI-enhanced workflows) in 2H FY2026 and AI-assisted loan origination workflow in Q1 FY2027 — promised Q4 FY2025
too-early Q1 FY2026 reaffirmed both dates and added an AI-workflow client advisory committee; timeframe not yet arrived
Launch Apartments AI conversational search ahead of the June 2026 Apartmentalize show — promised Q1 FY2026
too-early Stated in Q1 FY2026 as upcoming; milestone not yet reached in this transcript set
PRICED-IN (REFINED)
MEDIUMEst. revisions falling · Fwd P/E 40.2 · EV/Sales 4.0x
AI claim maps to CoStar Suite, Information services, Online Marketplaces
Analyst ratings show only modest improvement since January, while price targets have moved down sharply from lastYearAvg 66.95 to lastQuarterAvg 48.2 to lastMonthAvg 42, so revision momentum is best classified as falling despite consensus still modeling solid forward growth. Valuation is rich at about 40.2x forward EPS, with very high TTM PE and EV/EBITDA, which means the market is still paying for a meaningful recovery/growth story. AI upside would most plausibly flow through CoStar Suite, Information services, and Online Marketplaces rather than all revenue equally. Falling revisions argue the AI thesis is not fully endorsed in numbers, but the elevated multiple already capitalizes some upside, making the priced-in verdict medium.
COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS
3Q4 FY20243Q1 FY20257Q2 FY20254Q3 FY20258Q4 FY20259Q1 FY2026
AI enthusiasm across 6 calls — trend ↗ rising
AI evolved from sparse analytics references to concrete search, lease abstraction, workflow automation, and Homes AI engagement drivers.
RECENT AI CATALYSTS & NEWS
BUSINESS IMPACT - QUALITATIVE MATERIALITY
8/10 qualitative impact material medium-term · mixed evidence
Where AI matters: AI search, marketplace engagement, lease/debt workflows, onboarding/support costs
CoStar has deployed AI into core marketplace and data products, with Homes AI and Apartments Smart Search showing large engagement and lead-intent lifts, plus lease abstraction and internal agents reducing workflow costs. The upside is credible and broad, but direct revenue attribution is still mostly implied rather than proven.
Caveats: Engagement gains may not convert into paid revenue or ARPU uplift; AI claims are strongest in Homes.com where monetization and competitive position are still developing; Third-party AI assistants could pressure search UX differentiation; Cost-efficiency benefits are partly bundled with non-AI personnel initiatives
AI DISRUPTION / CANNIBALIZATION RISK two-sided · 3/10
AI could commoditize generic property search interfaces and automate some workflow/professional-services tasks, but CoStar's core value is proprietary real estate data, listings, Matterport assets, customer distribution, and vertical workflow integration. The threat is real at the interface layer but not enough to deflate the core subscription and marketplace model today.
OPTIONS / MARKET STRUCTURE
option liquidity: fair
proxy inputs — dollar-ADV $232M · beta 0.746 · px $33.66
source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.
CONFIRMATION — INSIDERS · 13F · LANGUAGE
Confirming — insiders buying, institutions adding, management language 7/10 committed.
INSIDERS buying 6 open-market buy(s) vs 0 sell(s) — net accumulation
INSTITUTIONS (13F) adding as of 2026-03-31: 129 new / 195 closed positions; 432 increased / 276 reduced; institutional ownership -0.83pp; -64 net 13F holders
MGMT LANGUAGE 7/10 committed AI stance is fairly committed, with owned launches and usage metrics, though some future Matterport and workflow language remains broad.
commit “Consumer engagement on Homes AI is multiples of conventional residential search”
commit “Renters who use Smart Search spend 94% more time on site and view 63% more listings.”
commit “we will launch Apartments AI, our pioneering conversational search experience built on the same technology powering Homes AI.”
VERBATIM AI QUOTES
“Consumer engagement on Homes AI is multiples of conventional residential search, and Homes.com is the fastest-growing residential portal in the United States.”
— Andrew Florance, Q1 FY2026
“We launched a client advisory committee with over a dozen institutions to shape the loan origination road map, deepen understanding of how AI is reshaping their workflows, and strengthen product-market fit.”
— Andrew Florance, Q1 FY2026
“Across the platform, debt solutions is actively building these AI-enhanced workflows.”
— Andrew Florance, Q1 FY2026
“Real Estate Manager added AI lease abstraction capabilities to the Visual Lease platform this quarter, and we will extend these capabilities to CoStar Real Estate Manager later this year.”
— Andrew Florance, Q1 FY2026
“Customers are eager to bring this best-in-class capability into the lease management and accounting workflows to save them a lot of time and hassle.”
— Andrew Florance, Q1 FY2026
“We're also deploying multiple AI agents internally to accelerate customer onboarding, support enablement and the automation of repeatable professional services work.”
— Andrew Florance, Q1 FY2026
“Matterport is already a key component of Homes AI and will unlock huge future AI innovation all across CoStar Group.”
— Andrew Florance, Q1 FY2026
“In Q1, Apartments.com introduced Smart Search, our natural language search feature and the first AI-powered voice search in multifamily.”
— Andrew Florance, Q1 FY2026
“Renters who use Smart Search spend 94% more time on site and view 63% more listings.”
— Andrew Florance, Q1 FY2026
“Ahead of the June Apartmentalize trade show that NAA hosts, the big show of the year, we will launch Apartments AI, our pioneering conversational search experience built on the same technology powering Homes AI.”
— Andrew Florance, Q1 FY2026
“Apartments AI will more deeply engage renters and continuing delivering best-in-class advertiser ROI through the industry's highest quality leads.”
— Andrew Florance, Q1 FY2026
“Our new March ad showcased Homes AI in action, and I have received more positive feedback on this campaign than any of our prior Homes.com campaigns.”
— Andrew Florance, Q1 FY2026
“Homes AI is the engine behind this engagement search.”
— Andrew Florance, Q1 FY2026
“AI users run nearly 4x as many searches, favorite 7x as many properties and submit 7x as many leads.”
— Andrew Florance, Q1 FY2026
“In April, time on site reached 18 minutes for AI users versus 4 minutes, 32 seconds for non-AI users.”
— Andrew Florance, Q1 FY2026
“This is precisely the dynamic that precedes meaningful consumer share shift and is exactly the proof point we expected our AI investment to produce.”
— Andrew Florance, Q1 FY2026
“In Q2, we'll continue building AI search functionality as we progress towards integrating OnTheMarket into the Homes.com software environment in 2027.”
— Andrew Florance, Q1 FY2026
“The outperformance in adjusted EBITDA was primarily due to lower personnel costs from cost-saving efforts as we continue to find efficiencies from AI, personnel and other expense initiatives.”
— Christian Lown, Q1 FY2026
“In an increasingly AI-centric global economy, our rapidly growing data set will prove an invaluable day-to-day tool for center developers, operators and owners.”
— Andrew Florance, Q4 FY2025
“Built upon the industry's largest collection of lease deals, CoStar rent benchmark uses AI to extract starting rents, TI allowances, rent concessions, escalations and more from the actual legal leasing document.”
— Andrew Florance, Q4 FY2025
“In combination with AI-powered lease abstraction benchmarking, I believe we can take very significant share in this category over the next several years.”
— Andrew Florance, Q4 FY2025
“We are developing the furnish feature, which uses generative AI to virtually stage or imagine different uses for rooms.”
— Andrew Florance, Q4 FY2025
“Last week, we launched the game-changing Homes AI, which we believe is the best-in-class and first fully integrated proprietary vertical real estate application built upon the best strengths of the leading LLMs.”
— Andrew Florance, Q4 FY2025
“We strongly believe Homes AI will drive higher engagement, support significant growth in organic traffic and contribute to a meaningful increase in agent subscriptions.”
— Andrew Florance, Q4 FY2025
“In the first week post release, Homes AI is having a huge impact on user engagement.”
— Andrew Florance, Q4 FY2025
“AI users do nearly 4x as many searches, favorite 7x as many properties, look at 4x as many properties, and submit 7x as many e-mail leads.”
— Andrew Florance, Q4 FY2025
“I believe that our deployment of this advanced AI software will result in substantial competitive advantage for CoStar Group for years to come.”
— Andrew Florance, Q4 FY2025
“We are actively working on integrating the Domain residential platform into Homes.com and the Homes AI software platform.”
— Andrew Florance, Q4 FY2025
“CoStar Group is emerging as a clear winner in the artificial intelligence era.”
— Andrew Florance, Q4 FY2025
“We are using AI to cut significant costs and improve our product offerings and quality.”
— Andrew Florance, Q4 FY2025
“We're launching new transformative products that would not have been feasible without our AI innovation.”
— Andrew Florance, Q4 FY2025
“Importantly, AI will feature prominently as we use it to extract rents, lease terms and other data from leases to create benchmark solutions, and we will also provide this functionality to our customers for automated lease abstraction and audit purposes.”
— Christian Lown, Q4 FY2025
ANALYST QUESTIONS ON AI
Q (Q1 FY2026, Brett Huff): My question is on Matterport. We've been feeling that, that's a really big underlying structural kind of piece of the business that's underappreciated. Can you talk a little bit about -- you gave us some great stats on lingering on the site and things like that. Can you -- and so it's clearly just a great enhancer to all of the products that you have. But can you talk balancing that and how you price it and distribute it just to improve the product generally? And then also talk a little bit about Matterport as a function or a module of data that's going to help you differentiate and remain sort of on the edge of proprietary data?
A: Andrew Florance said Matterport value is embedded in subscription or advertising fees, cited conversion effects, described X-ray and Gaussian splat functionality, and said: "we have a very robust product road map right now that will continue to differentiate us."
Q (Q4 FY2025, Brett Huff): Can you talk again about the commercial EBITDA guidance? You all kind of articulated some of the things you're investing in. There was a long list, but I wonder if you could sort of give us the top few maybe that seem the biggest priority.
A: Christian Lown listed investments including CoStar Australia, Europe, CoStar Debt Solutions, Real Estate Manager and Visual Lease integration, lease benchmarking, new homes information, STR modules, and said: "As you've seen, we launched Homes AI very successfully, and it's been a great couple of weeks. We are going to take that capability across all our businesses, first in Apartments.com, but then quickly across all other businesses."