CoStar Q4 Sales Miss Sparks 20.3% Share Decline
CoStar Group’s fourth-quarter net new sales fell below expectations, driving a 20.3% share decline that cost the Baron Focused Growth Fund 93 basis points. The firm noted monthly active Homes.com users reached 110 million, and CoStar ends 2025 with $2 billion cash, $1 billion debt, and 20% salesforce growth.
1. Q4 Performance and Sales Shortfall
CoStar Group delivered weaker-than-anticipated fourth-quarter net new sales, resulting in a 20.3% decline in its share price and a 93 basis-point drag on the Baron Focused Growth Fund’s performance. One-month and three-month returns were negative 12.82% and 33.99%, respectively, with the company valued at a $21.6 billion market capitalization.
2. Residential Investment and User Metrics
Significant growth investment in the residential Homes.com platform has yielded 110 million monthly active users, though sales performance remains modest. CoStar expanded its residential sales force by 20% in 2025 and expects accelerating momentum as customer targeting improves and listing service changes take effect.
3. Balance Sheet and Outlook
CoStar closed 2025 with $2 billion in cash against $1 billion of debt, maintaining a strong balance sheet. Management anticipates a rebound in net new bookings for its core commercial business and believes residential investments could add at least $1 billion to annual revenue over the next five years, boosting EBITDA by roughly 50%.