CoStar's Q2 2026 revenue rose 18% to $925M (about half the gain from buying Domain) while operating costs grew 2%, swinging to a $76M operating profit and positive residential Adjusted EBITDA, though net new bookings fell to $69M from $93M.
Revenue
$925M
+18.4% YoY
Net income
$55M
+816.7% YoY
Diluted EPS
$0.14
+1300.0% YoY
Operating margin
8.2%
Overview
CoStar Group owns the CoStar commercial-property database, the LoopNet listings site, Apartments.com, Homes.com and, since August 2025, Australia's Domain. In the second quarter of 2026 it grew revenue 18% to $925 million while total operating expenses rose only 2%. That gap is the story of the quarter: operating income swung from a $27 million loss to a $76 million profit, and GAAP net income rose from $6 million to $55 million ($0.14 per diluted share vs. $0.01).
Two things flatter the headline. First, $70 million of the $144 million revenue increase came from the Domain acquisition (the residential side alone), not from businesses CoStar already owned. Second, the quarter included a $17 million net recovery tied to a long-running lawsuit by former Matterport shareholders (the "Brown Judgment"), booked as a reduction of general and administrative expense. Without that recovery, operating income would have been roughly $59 million. That is still a clear turnaround from last year's loss, but a smaller one.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$925M
$781M
+18.4%
Operating income (loss)
$76M
$(27)M
n/m (loss to profit)
Operating margin
8.2%
-3.5%
+11.7 pts
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Operating margin is the share of revenue left after running the business, before interest and tax. The net income and EPS growth rates come from rounded figures on a tiny prior-year base ($6 million, $0.01), so the percentages are mechanically huge and say little about momentum. "n/m" = not meaningful.
Adjusted EBITDA is CoStar's own non-GAAP measure. It is earnings before interest, tax, depreciation and amortization, with stock-based pay, acquisition costs, restructuring and legal settlements also removed (per the July 28, 2026 earnings release, Exhibit 99.1, and the segment note in the 10-Q). The $17 million Brown recovery is excluded from Adjusted EBITDA, so the $184 million figure is not inflated by it.
First half of 2026: revenue $1,822 million (+20% from $1,513 million), operating income $79 million (vs. a $70 million loss), net income $58 million (vs. a $9 million loss), diluted EPS $0.14 (vs. -$0.02), Adjusted EBITDA $316 million (vs. $151 million, per the earnings release).
Revenue by product
Product line
Q2 2026
Q2 2025
YoY
H1 2026
H1 2025
YoY
CoStar (commercial data subscriptions)
$337M
$310M
+9%
$668M
$615M
+9%
LoopNet (commercial listings)
$87M
$76M
+14%
$172M
$149M
+15%
Other commercial (Matterport, BizBuySell, Ten-X)
$57M
$60M
-5%
$113M
$91M
+24%
Total Commercial Real Estate
$481M
$446M
+8%
$953M
$855M
+11%
Residential Real Estate (Apartments.com, Homes.com, Domain, OnTheMarket, Land.com)
$444M
$335M
+33%
$869M
$658M
+32%
Total
$925M
$781M
+18%
$1,822M
$1,513M
+20%
What drove each line, per the 10-Q's management discussion:
CoStar (+$27M, +9%): "an increase in subscribers, inflation-based price increases, and additional sales of STR Benchmarking." STR is the company's hotel-performance data product. This is the steady core business.
LoopNet (+$11M, +14%): more listings, plus Domain's Australian commercial listings, so part of this growth was also bought.
Other commercial (-$3M, -5%): "primarily due to fewer properties transacted on Ten-X," CoStar's commercial property auction platform. The +24% six-month figure is inflated because Matterport (the 3D-scanning company bought in February 2025) was only part of the first quarter of 2025. The Q2 comparison, with Matterport in both periods, is the cleaner read.
Residential (+$109M, +33%): $70 million from Domain plus "an increase in the number of memberships and properties advertised on our network, partially offset by a reduction in average price." Excluding Domain's $70 million, residential revenue was about $374 million, up roughly 12%. That is the organic growth rate for Apartments.com, Homes.com and the rest.
The 10-Q does not split residential revenue between Apartments.com and Homes.com, and it does not break out Homes.com's standalone losses, so neither figure appears here. It does say CoStar expects residential revenue growth to speed up in 2026 because of a full year of Domain and "an increase in the number of Homes.com memberships." The "reduction in average price" means members are joining at lower prices on average.
Revenue earned outside the U.S., mostly Domain, reached $150 million in the quarter, up from $61 million a year earlier.
Homes.com and the residential turnaround
The residential segment is where CoStar has been spending heavily on Homes.com, its attempt to take home-buyer traffic from Zillow. The segment figures from the 10-Q show that spending held flat while revenue grew:
Residential segment
Q2 2026
Q2 2025
Revenue
$444M
$335M
Marketing expense
$199M
$201M
Personnel
$167M
$162M
General & administrative
$83M
$61M
EBITDA
$(5)M
$(89)M
Adjusted EBITDA
$12M
$(76)M
Marketing, mostly brand advertising for Homes.com and Apartments.com, was essentially flat in dollars even though the segment now includes Domain. The 10-Q breaks it down: marketing at the existing brands fell $12 million while Domain added $10 million. Personnel costs at the existing brands fell $24 million, offset by $28 million added with Domain. With revenue up $109 million and costs roughly steady, residential Adjusted EBITDA reached $12 million. CEO Andy Florance said in the earnings release that the residential segment "turned Adjusted EBITDA positive" for the first time, "a $41 million improvement over the first quarter" (Q1 2026 was a $29 million loss).
On plain EBITDA (before the company's adjustments), residential still lost $5 million in the quarter and $51 million in the half. So the segment does not yet cover its stock-based pay and acquisition costs. Management's full-year guidance in the earnings release calls for residential Adjusted EBITDA of $110–130 million. After a $17 million loss in the first half, the segment would need to earn roughly $127–147 million in the second half. That is a steep ramp, and it depends on marketing spend staying contained.
The 10-Q does not discuss shareholder or activist pressure on Homes.com spending. The spending restraint shows up in the numbers, and the earnings release says management has cut "our projected expense base by roughly $100 million versus our original guidance."
Commercial segment
Commercial Real Estate Adjusted EBITDA rose $11 million to $172 million on $481 million of revenue, about a 36% margin. Higher personnel costs and a $10 million rise in general and administrative costs (web hosting, professional services and office costs from hiring at existing brands) absorbed most of the $35 million revenue gain.
One-off items and changes below operating income
Brown Judgment: CoStar paid $109 million in the quarter to resolve the judgment, recognized $9 million of extra interest expense on it, and booked $17 million of net recoveries as a reduction of G&A. G&A fell $8 million overall to $114 million, mainly because of that recovery. The $100 million of restricted cash held as collateral for the case was released.
Interest income is gone: net interest swung from $33 million of income to $2 million of expense. The 10-Q attributes this to lower cash balances plus the $9 million Brown interest charge. It is a lasting drag on net income: the large cash pile that used to earn interest has been spent on Domain and buybacks.
Prior-year other income: Q2 2025 included $16 million of other income, mostly unrealized gains on currency hedges and Domain shares tied to the acquisition. Nothing like that recurred.
Tax rate returned to 26% from 73% a year ago, when pre-tax income was tiny.
Bookings, the weak spot
Net new bookings were $69 million, down from $93 million a year earlier. The figure is the annualized value of new subscription contracts minus cancellations, and it signals where subscription revenue is heading. The earnings release notes it was up 3% from Q1 2026. Contract renewal rates held at about 89% on a trailing-12-month basis, unchanged from a year ago. Subscriptions made up 89% of revenue, down from 95%. The 10-Q attributes that to Domain and Matterport, which sell more one-off listings and services.
Weaker bookings sit awkwardly beside the "profitability inflection" message in the release. Part of the margin gain comes from spending less on sales and marketing, and slower bookings now can mean slower subscription revenue growth later.
Buybacks and balance sheet
CoStar is shrinking its share count quickly. In the first half it bought back 13.8 million shares for $589 million. Of that, $500 million went through an accelerated share repurchase, a deal where a bank delivers the shares up front and the final price is settled later. It was completed in March at an average $44.27 per share. The other $87 million was bought on the open market. Diluted shares fell 4.7% from a year earlier to 404.4 million, and $913 million remains under the $1.5 billion buyback authorization approved in December 2025.
Cash fell to $1.27 billion at June 30 from $1.63 billion at year-end, against $994 million of long-term debt. Operating cash flow for the half was $267 million, up from $200 million, even after the $109 million Brown payment.
Takeaway: The profit swing is real but mostly driven by costs. Revenue grew 18% (about 12% organically in residential and 8% in commercial) while total operating expenses rose only 2%, and residential marketing stayed flat in dollars. The risk is the other side of that trade: net new bookings fell 26% from a year earlier to $69 million. The question for the next few quarters is whether CoStar can keep spending down without slowing the subscription growth its future revenue depends on.
Outlook
From the July 28, 2026 earnings release (Exhibit 99.1):
Guidance
Q3 2026
Full year 2026
Revenue
$935–945M (~13% growth at midpoint)
$3.715–3.755B (~15% growth at midpoint; revised)
Adjusted EBITDA
$190–210M (~21% margin at midpoint)
$780–820M (affirmed; +$30M at midpoint vs. February guidance)
Adjusted EPS
$0.31–0.34
$1.32–1.39 (reaffirmed)
GAAP net income
$51–65M
$218–247M
The full-year Adjusted EBITDA range implies about $464–504 million in the second half, compared with $316 million in the first. Management is therefore counting on the Q2 spending restraint continuing and on residential profits rising sharply. Revenue growth is guided to slow to about 13% in Q3 as Domain starts to lap its August 2025 purchase date, so organic growth will have to carry more of the load. The Q3 Adjusted EBITDA guide of $190–210 million is only a modest step up from Q2's $184 million. Hitting the full-year range would then take a considerably stronger fourth quarter.
Source: CoStar Group Form 10-Q for the quarter ended June 30, 2026 (filed July 29, 2026). Adjusted EBITDA, Adjusted EPS, the CEO quotes and guidance are from the company's Q2 2026 earnings release (Form 8-K Exhibit 99.1, July 28, 2026).