Ladies and gentlemen, thank you for standing by and welcome to the CoStar Group First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time [Operator Instructions] As a reminder, this conference will be recorded. And at this time, I would like to turn the conference over to our host, Vice President of Investor Relations, Mr. Rich Simonelli. Please go ahead, sir.

Thank you, operator, and thank you all for joining us this morning and welcome to our first quarter 2015 conference call. Before I turn the call over to Andy and Brian I have some important facts for you to consider. Certain portions of this discussion contain forward-looking statements, which involve many risks and uncertainties that can cause actual results to differ materially from such statements. Important factors that can cause actual results to differ include, but are not limited to, those stated in our April 29, 2015 press release without our first quarter earnings, our April 29, 2015 press release and our plan to acquire ApartmentFinder and the CoStar's recent filings with the SEC, including our Form 10-K for the year ended December 31, 2014 under the heading Risk Factors. All forward-looking statements are based on information available to CoStar on the date of this call, and CoStar assumes no obligation to update these statements whether as a result of new information, future events or otherwise. As a reminder, today's conference call is being broadcast live and in color on the Internet, at www.costar.com, where you can also find CoStar's Investor Relations page. A replay will be available approximately one hour after this call concludes and will be available for approximately 30 days. To listen please call (1-800)-475-670 within the U.S. or Canada or 320-36-53844 outside the U.S. The access code is 357606 and a replay of this call will also be available on our website sooner after the call concludes. I would like to turn the call over now to Andy.

Thank you, Rich appreciate it. It's not really broadcast in color, is it?

Yes.

Good morning, everybody. We're glad to have the opportunity to talk with you today about our very strong financial results in the first quarter of 2015. The tremendous progress we're making with Apartments.com, has been phenomenal and we also want to talk about our agreement to acquire ApartmentFinder, which we announced last night. Our revenue increased 34% year-over-year to $159 million in the first quarter of 2015, compared to $119 million in the first quarter of 2014. We achieved net bookings of $21 million for the quarter a whopping 50% year-over-year increase. March net bookings surged well beyond our prior best ever month to $11 million, which represents a 91% increase versus March of 2014. March's record sales were a direct result of the successful launch of our new Apartments.com site and our new CoStar market analytics product. The magnitude of the March sales jump surprised all of us. Net new sales on annual contracts as opposed to many of the six month contracts that come in on apartments, the annual contracts were $16.2 million for the first quarter of 2015, which is up 10% over the first quarter of 2014. CoStar core services grew 20% during the first quarter of 2015 as compared to the same period. Our annual subscription business continues to enjoy high trailing 12 months renewal rate of 91% with a 98% renewal for those customers with us five years or longer. According to Google Analytics, our marketplaces drew their most traffic ever with 22 million unique visitors in aggregate in March of 2015. According to a study conducted by Kip Cassino and Borell Associates, Inc., apartment landlords will spend $1.5 billion in online advertising in 2015. We believe that this represents a major earnings opportunity for CoStar Group. We acquired Apartments.com, a major player in…

Yeah, that wasn’t for two conference calls in one Andy. I was expecting to go a little longer both the quarter and on acquisitions. Thank you, Andy. I know. As Andy mentioned, we're very pleased with our performance in the first quarter of 2015, the investments we're making in marketing are showing positive early results with all-time high sales numbers, increased traffic and leads. All the while CoStar Group's core business continues to show solid topline growth. While we're in the early stages of the Apartments.com website re-launch and national marketing campaign, the early uplift in sales and traffic support our view that apartment's revenue will accelerate in the third and fourth quarter this year and obviously beyond. We expect the acquisition of ApartmentFinder will help expand our market share with property owners as well as our reach with consumers, while generating sizeable crop selling opportunities in synergies in 2016. The ApartmentFinder transaction we announced yesterday when we paid for with cash on hand of about $170 million, which is as Andy mentioned a very favorable evaluation at seven times EBITDA. We expect the deal to close in the 90 days or less. The valuation looks even better when you consider the $20 million in run rate synergies we expect to achieve within 18 months after the close. Given the attractive purchase price and the benefits that come along with that, we can drive significant value for shareholders. For the fiscal year ended March 31, 2015, revenue for the total ApartmentFinder business is approximately $75 million with EBITDA at approximately $23 million resulting in a 29% margin. However, there are several non-core assets, which we will likely sell and discontinue over the next 18 months. Example, rack space rentals in grocery stores, banner ads and other selectable items. ApartmentFinder's core…

Thank you, Sir. [Operator Instructions] And we'll go to the line of Sterling Auty with JPMorgan. Please go ahead.

Yeah thanks guys. I appreciate it. In terms of the ApartmentFinder acquisition, when you look at the two properties, I understand the marketing delineation that you're trying to drive for. But how do you not end up cannibalizing your higher monthly charged property with the lower?

Are you referring to the fact that -- are you referring to the free ads versus the paid ads, or are you referring to a price differential between ApartmentFinder and Apartments.com?

Mainly the price differential, because aren't you going to end up with free content on both?

We will and we're very pleased with what we've seen in the site behavior and differential between the significant exposure, the premium content gains versus the relatively insignificant exposure the free content gets. So the paid is getting really good traffic comparatively. So we're actually very comfortable with that and we really like the numbers, the very consistent. So we're not really concerned about the cannibalization, but it is very important to the renter that they find their complete content, they're always searching for that diamond in the rough and we believe they prefer a more comprehensive organized site. So that draws additional traffic and then you're getting this differentiated or this funnel that drives more of the additional traffic to the premium listing. So we feel good about that. The Finder price point is actually higher than the Apartments.com average price point. So we're -- but relatively similar compared to other solutions out there. So, so many other solutions are charging maybe any range of 40% to 80% more on average than we are. So we're able to do high margin sales along with information sales at a lower price point than some of these other players and we like being in that situation. The superior product a profitable lower price. So we like that lower price and we're not worried about a sort of cannibalization there. does that answer the question and I am glad there was a question, or there would be no question today?

And next, we will go to the line of Bill Warmington with Wells Fargo. Please go ahead.

I wasn't sure if I should be asking about a tax rate in 2020. That's probably the top question. So first of all, congratulations on the deal, very impressive, and the performance as well in the quarter. With one question, I'm going to ask about the new metric. You've given the new net subscription sales historically. You're giving the net bookings now. The $4.8 million difference between the $16.2 million and a $21.0 million, is that all Apartments? Or does that include anything else in there that would be short term?

It includes anything else in their build obviously with the strong performance in apartments in March the biggest piece of it is apartments. So that does include everything else. I think it's a metric we used to talk about years ago. Obviously the company really focuses on annual contracts. We're trying to move LoopNet's annual contracts and when we first look at the apartment space, we were told that people won't sell annual contracts as of course lots of people are now. So I think we will continue to push people up to the annual contracts which obviously has so many benefits, but it sort of includes an all in number and I've always said this. I don't think you look at any one metric, but I think when you look at the metrics combined, it obviously gives you trends right and it gives you trends that the future looks bright for revenue growth for CoStar.

And that monthly bookings number that you had there? How do we look at that in that context?

Well obviously it's by far a mile the highest number we've ever seen. So what that says is as revenues, as that continues to go higher, you're going to obviously translate in Q3, Q4 and into the next year with higher revenue growth, which is sort of what we said. We said, listen the first half of this year was going to be about getting the site converted, launching the marketing programs and obviously having such success gives us even more confidence in the back half of the year, which is why raised up, it didn't really raise up Q2 that much a little bit, but really it's more about the back half of this year and obviously going in the next year. And if you look at -- so the industry we came into was 30-day industry and it doesn’t make sense because these folks who own these 300 unit communities their need to generate leads and traffic in their leasing office does not go away at the end of 30 days. So we're giving them a compelling reasons to do a moderate commitment of one year and part of that successful formula is giving them a fantastic information solution CoStar market analytics, which allows them to now take those leads that we're giving them and then optimize the pricing using our system or help them to supervise the yield management system using our really detailed granular competitive pricing information. So people are responding really well to that and we're getting great traction and two things are happening that was considered -- two things were happening in the industry that were considered not possible before. One is people are, a lot of people are going to annual contracts, which rarely happened before and secondly, historically people moved one or two properties at a time between ILS. We're now seeing a regular occurrence of people moving a significant percentage of their portfolio from one ILS over to us and that's because we're giving them a good solid deal for buying both -- doing bulk purchase doing an annual contract and including information purchase. So this doesn’t mean we want to turn our back on a lot of revenue that is ready to beyond six months and part of that is just it depends which person our sales force went and with them. As prior some of our sales people getting a 100% annual business now and some have spent five or six years doing 30-day and six months of that contract. So the more meaningful number to me is that booking number right now.

And next, we will go to Andre Benjamin with Goldman Sachs. Please go ahead.

Thanks. Good morning.

Good morning.

I know you guys just signed the deal and have some work to do, but I wanted to dig a little bit more into how the sites will actually differ beyond just giving you the ability to fill the first page of Google results, which does have some value. Maybe a little more detail on how the interfaces will be different, differences in the branding. And what is the difference in the typical customer you hope to target or the property manager that would list on one site versus the other?

Good question and I appreciate your prefacing it with the fact that we're one business hour into the announcement. So having said that, it's pretty the folks in the United States have $100 million ranchers in the United States, it's a very diverse group and what drives, who those people are and what drives them is very different. So if I take -- if I take that 18 to 27 demographic and I do quartiles on up to 70 years old, you've got big audiences in each of those sectors. Obviously those audiences are looking at the world, their apartment rent in very different ways and you also have -- you have people who are moving -- 15% of the world is moving in the rental because they've been relocated to a new location. 50% is moving because of financial drivers. They're either trying to avoid a rent increase. They're trying to reduce their spend on rent. They've had an income adjustment. They're trying to get a large apartment for the same price. So 50% are very price sensitive. So there is a rich a variety of options on how you actually target a site of different audiences and different needs of these very different audiences. We've done a ton research into who these people are. We've literally interviewed 10,000 renters. We've done focus groups with hundreds and hundreds of renters in cities and all over the United States. We've also done segmented focus groups looking at these different age groups. Now we've got at least six Zulia employees on the call today, so I'm not going to go into too much detail, but we've done really innovative things in the design like use the color orange instead of the color green for the new design. We did tricky things like move the placards from the right of the map to the left of the back and I have to tell you, working with designers who have worked on the first site it takes a lot of discipline to make sure that the site really develops an honest, unique personality. People keep trying to use things from the prior design. So ultimately when we're all said and done, we will have independent product management teams with mission statements as to what their product philosophy is and they’ll maintain these unique UIs and there will be content on one side that does not exist on the other side. So we'll make it genuine, we'll make a genuine difference renter experience in these sites to cater to these very different marketplaces. Initially the finder feels like it could be a great opportunity to focus on those people who are driven primarily by economics in their decision. So we might be exploring that, but we will show you more hopefully pretty soon with the launch.

And just to add to that is that the ApartmentFinder have been around and founded in 1979 as Andy said and it probably somewhat focuses on some of the smaller geographies. So it has its own sort of core following it and following it for a long, long time. So I think that obviously will also continue to drive it ahead as its own unique sort of offering. It has lots of people obviously that have been going to it for many, many years.

And next, we will go to the line Michael Huang with Needham & Company. Please go ahead.

Thanks. Good morning. Congrats guys.

Good morning. Thank you.

Just a quick question for you. So for your advertisers that you're acquiring for Apartments.com, I was wondering, do you have a general sense for what percentage of their advertising budget that you're capturing? How much more room is there to grow as these customers -- and do you actually believe that ApartmentFinder helps to deepen penetration, or is that more to help acquire new customers?

So without a doubt there is an awful long ways to go these folks. So as we go into Apartments.com, we never were going into a meeting with one of these prospects. We tried to understand -- we tried to actually, we required that the sales people really give us a solid estimate of what they're spending on all the other sites out there, what their market budget looks like. And we're generally a pretty small percentage of their overall marketing budget. So we set goals for what sort of share of their marketing budget we want to get and we're absolutely at the very beginning of that process. Now I am struck by the fact that when you look at these different owners and their advertising plans, they're almost always running on multiple sites. So that's important to them and you cannot get to these people and say, no don't advertise, like don't advertise on the other site. They feel the need to have diversity and diversification across their plan especially when they're in a lease-up situation with new construction, which is very common right now. They like to hit multiple runs. So Finder allows us to go in there and I've been on some meetings where -- I've been on some meetings where I will see that we have about 10% of their budget and then another site has got 20%, another site has got 40%, another site has got 10%, another site has got 5%. This allows us to go in there and do a fairly big deal where we take up additional 15% of their marketing budget by virtue of having two different viable solid well recognized brands that they can market on. So this allows us to go for bigger hits. Now size of deals we're pulling in right now are the upper quartile of these are probably 4X or 5X anything in Apartments.com has ever seen before and the addition of Finder allows those deals to be even bigger again once we've done the technology and pulled the offerings together. So did that answer your question? Or do you want to refine that question? Or did you get moved into the next call. Okay, we'll circle if you want to get more on that.

And we will now go to the line of Sara Gubins with Bank of America. Please go ahead.

Hi, thank you. I'm hoping you could give us an update on core CoStar sales to institutional investor clients. And also, on the LoopNet price increases, any update on how that's going? I know that you've talked about a $10 million to $15 million revenue headwind for the year that's in guidance. But I'm wondering if there are any signs that you're actually losing to clients to a point that might support that headwind. Thank you.

I'll start with LoopNet and then turn it over to Andy to talk about debt and equity. So we expect the impact of the LoopNet to continue to be in the range of sort of what we had. Our strategy has somewhat evolved as we've opted to raise pricing of LoopNet information services fairly dramatically. So it reduces competition with sort of the CoStar services instead of sitting down the channel in the short term. As planned sort of subscribers are declining, you're not picking as many of them up and they're declining. We'll obviously continue to evaluate that strategy. As LoopNet faced declines, we expect obviously over the next few quarters assign many of those up to higher value CoStar contracts, but we'll be continuing to monitor that and tweak that. How we go about it might evolve, but essentially sort of the strategy what we have we believe is working.

And to answer your other question about our debt and equity sales and the core CoStar and what that looks like right now, I was looking at the list of sales people who would be able to attend one of the big industry conference in June two days ago and I did notice that the regular names or the regular suspects in our sales force who sell debt and equity outside of the traditional, this new Apartment.com sell debt and equity information. Those folks were looking really solid and were turning in some really good numbers. So I don't have detail on that, but I just see those guys, those folks producing good solid numbers and that would not be -- that would not likely be the sort of combined info apartment cross-sell numbers. So those do qualify as institutional debt and equity sales or debt and equity sales. Without disclosing some specific names, we had a -- we had one very big win, half million competitive win taking away from another player in the debt and equity space this month. So we're very thrilled with and we think it is a strategic win that could allow us to get additional new wins across that space. So that's going well, but one of our problems here, one of our problems, great problem, one of our problems here is that the sales force is watching what's going on and they're seeing people get some very big ticket sales on this combined Apartment.com CoStar market analytic sale to the multi-family world and now there is a line mile long of sales people going after that space and they're all and in fact we've had to rely on our new commission structure to keep people focused on LoopNet. So our new commission structure I think we've mentioned in the past, your percentage commission rates are set by how much you filled up the three core buckets of CoStar apartments and LoopNet. So that's the only thing keeping sales people focused on some of the traditional things when they're seeing these big numbers in the apartment space.

Okay. And next we'll go to the line of Andrew Jeffrey with SunTrust. Please go ahead.

Hi guys. Good afternoon.

Hi Andrew.

A question for you, Brian, on the Apartments.com revenue contribution this quarter. Just trying to back into organic revenue growth, and then what your expectations will be, given these strong bookings numbers for organic revenue growth in the back half and maybe what you think the sustainable rate of underlying revenue growth can be, looking out.

Sure, yes, I think sort of pro forma I don't have the exact number around, but I think it's around 13% sort of pro forma. Obviously we switched over the site. There is some revenue that falls off. The site got switched over basically at the end of February. So sort of one month worth and then obviously that will roll through the second quarter. So we feel pretty good. Core business continues to grow in that 12%, 13%, 14% range and once we get through the switch over and some of the things that we talked about, we think obviously these bookings are just a great sign for what we believe can happen in Q3, Q4 and obviously go into 2016. So the stated goals out there is that we will sort of in the back half of this year start to grow the apartments business into sort of the high teens and as you go into next year getting the 20% plus and yeah I think it's the sustainable. I think that when you have a current estimated $1.5 billion space that I believe is going to be $2 billion to $3 billion as more and more advertising dollars go offline, I believe we can run that piece of the business at 20% plus for many, many, many years to come. So obviously looking into my crustal ball, I am not going to -- a lot of people ask me and one of the reasons why I put out my 20-20 vision so to speak is that while I am not going to change 2018, but the revenue number obviously becomes very achievable with where we are today, with the acquisition. Obviously we're also committed to the EBITDA line, which is I think important to a lot of people, but the 20-20 vision tells you that when you look at the combined business, we can continue to grow in the 14%, 15% sort of percentage points for a long, long time to come. So we're pretty confident we have a huge opportunity here that we can execute on over the next five years.

Next we'll go to the line of Peter Lowry with JMP Securities. Please go ahead.

Hi. Congratulations on a great quarter. Obviously, the marketing campaign has been very successful so far. Can you talk about how you address concerns that marketing spend may stay elevated after the campaign ends?

Well at this point it has been very successful has driven a lot of traffic. It has differentiated our brand and the space and it's allowing us to take a lot of share and set record sales numbers. It's obviously really early in the process though. We only one month of sales. So we're not at this point setting our 2016 budget or strategy, or plan, but remember that one of the things we're doing here is we definitely I think the world has changed and that similar to the travel world, the apartment world will be a world which people will make investments in branding to consumers. It is a massive, massive marketplace and will remain so. So I think this is the new reality to some degree. Now it take a lot more money to build a brand than to maintain a brand and we've tried various weeks where we pulled back on the campaign or it's just part of our preset plan was to have certain regulatory pull back on the campaign and just watched traffic as that happened. And we're pretty happy with the way site performance remained up despite the fact that we pulled back in certain week to test, but it's so early and one of the things we're conscious of as we look at an acquisition of a finder is that it gives us additional scale high margin scale so that you can actually maintain a significant B2C in some component of your formula and leverage that across a broader revenue stream. So it's very early, but nothing has changed from our earlier feeling that our overall branding component of our campaign would moderate in 2016.

And I think just to add to that, we talked last quarter and the quarter before about our goal was to have $500 million plus in the space over the coming years at a 50% margin and so I think that that remains and that's really when you look at -- when you look out at the 20-20 vision where we believe the business will be. So really what you're doing is you're going to have -- you're still going to have marketing dollars going, but you're obviously spreading those dollars over a much bigger revenue base and with higher revenue growth obviously you can in the future, you'll be able to spend appropriately on the marketing, but you'll obviously have the earnings that people are looking for. And if you look at other industries that is exactly when you look at like a Priceline or other companies, Expedia, they're growing, they have EBITDA margins in the 40%, 50% range. So we feel pretty confident in the long-term vision of the company and the profitability that it can hold. The other thing to sort of point out is that in the launch of this campaign, it's very aspirational or very visionary. You don't have an immediate near term ROI calculation because it's all theoretical. As you move into 2016, you actually can begin to move into a more calculated ROI for each specific investment and then each year it goes by, you'll be able to calculate that specific ROI more and more cleanly. So we'll be able to give more clarity as to what and why and how.

Next we'll go to the line of Brett Huff with Stephens Inc. Please go ahead.

Good morning, Andy, Brian and Rich.

Good morning.

I need to follow up on -- a question was asked before on the $10 million to $15 million of the fund-setting of the Loop rev this year. Brian, I think you answered that question. What I'm trying to get at is the sales, or the net new bookings of annual contracts on subscriptions was up 10%, all in. The info was up 20%, and it implies LoopNet was down. The question is, how much of that $10 million to $15 million, and I know that's a revenue number, but how much of that fund-setting is negatively impacting that net new number on the Loop side? And have we burned our way through the $10 million to $15 million and we're now moving on, or how does that look? Will the net new for Loop get better through the year, I guess is my question.

Yes, obviously I think the LoopNet will get better. I think the majority if you look at the stuff when you raise the price as dramatically as we did, we are losing subscribes, the premium searcher and most of those are monthly. So that's actually being picked up in this bookings number, the $20 million bookings number. So as we lose those subscribers that will be picked up in that number and obviously as we pick up, and that now eliminates sort of the -- or we believe it really reduces the competition with the core CoStar service. As we think go out and sell those clients over the next few quarters, yes. I believe that will contribute to the LoopNet annual number getting better and better. So I think essentially instead of shutting it down, we're obviously sort of spreading it out. We're doing it a different way with increasing the price on the LoopNet info stuff, but I think overall, you end up with a very similar impact on the revenue number for the year. So obviously we monitor that and we can sort of pull the levers on that. So we're feeling good with where we're at.

Okay. Thank you.

Thanks.

And next we'll go to the line of Phil Stiller with Citi. Please go ahead.

Hi guys, thanks for taking my question. I guess I wanted to get a little more detail on the ApartmentFinder assumptions. So you gave the revenue and EBITDA numbers and then the synergy numbers. I'm just trying to understand, I guess, what the EBITDA impact is of getting rid of some of their legacy products. And then what is assumed in the $20 million synergy rate? Is that a straight expense synergy number, or does that assume any benefit from some of the cross-sales that Andy was talking about earlier? Thanks.

Yeah I think it's combined. So we talked pretty in detail about this. When we pick them up, we're obviously going to move fairly quickly on the search engine marketing side by increasing that before you can get to a lot of the expenses. So we obviously are going to rebuild the site with a goal by the end of the year and you will then look to transition over to one platform which then gives you the synergies. I think Andy mentioned the $12 million number on the print publications and those types of things that will look to obviously aggressively move out of. You can't move out of that till you get to the new site. So you're going to immediately start moving and spending on the digital side and you'll get the benefits of the synergies as you move to the new platform, which really should happen in 2016. So yes, I think you're going to get to $20 million of synergies, which is going to include and will include some cross-selling of the two. Obviously they have a ton of clients. We don't have and vice versa and you can go back to those clients and obviously offer both services at a great price and a price that's lower than the competitors prices out there. So I think 2016 will look great from that standpoint.

And next we'll go to the line of Brandon Dobell with William Blair.. Please go ahead.

I just want to leverage that last question for a second. The synergies versus the, I guess the site refresh, and I want to anticipate a marketing campaign once you get Finder organized like you want it to get, how do you think about the offset there? Are you going to save money to spend money? Should we expect the timing on those things to be not synchronized? I want to make sure I just understand the puts and takes as you move into owning it.

Sure, so there are multiple different kinds of marketing specific to the Finder site. So one would be SEM spend basically, basic search engine marketing. That's a very efficient way to acquire leads and actually measure the specific cost of leads that also has the benefit of competing with other players for the same lead. So that is a very measureable ROI activity and we would immediately become more aggressive in that space, which is an investment that we won't give the specific number, but it's -- it would be something that would probably offset the print investment area, which is not insignificant selling a 800,000 copies to 119 cities is large. So they offset each other pretty closely. So direct SEM and similar kind of digital acquisition of leads. We do not envision -- we do not envision there being a huge any kind of materially huge branding activity with occurring around Finder. A site can live on the internet without that kind of branding. And at this point we don't see it. That could change at some point in the future, but we will be able to clearly announce why. And then you're going to have -- we ran through a whole bunch of -- so you have an offset there between the print and the digital marketing and then you have a whole range of other efficiencies that are coming in the business here, like it is expensive and difficult to pull content from your advertisers, keep it up to date, keep the high quality there. And virtually all of the content that Finder currently spends a lot of time and money managing and pulling, we already since we're full inventory we already are pulling that content and we already bear that cost. So once you come together you have a duplicative cost there for content, that goes away and you end up with because you have more sites being populated by the same effort you have and more motivated list giving you direct access to the accounting systems and their property management systems. So that's just one example of where you're getting cost savings. So we see this over time, we're not talking about any kind of mass layoff here, any near-term way, but there is just across the Board your technology, your content, your customer service, your billing, everything, you got all sorts of leverage against your cost. So I believe that ApartmentFinder will become a very profitable site in a remarkably quick period of time and that the cost savings will come in the form of attrition and the like that is natural with any business. So if you look at -- if you look at LoopNet we obviously achieved massive cost synergies and I think we laid off four people. So I think we have a similar scenario here and I am very excited about the potential margin of ApartmentFinder. It is significant.

And we will have a follow-up from the line of Sterling Auty with JPMorgan. Please go ahead.

Yes thanks hi guys. Can you give us an update on where you are in the projects and investment? You mentioned London, but how about with all the efforts that you laid out for Canada?

Canada, well to be honest with you February was not an attractive time to be focusing. No offence to my sister or brother out there, but the -- no, that's progressing well. I understand that they're having a decent sales month up there at this point and that we're bringing online Calgary, Vancouver, I think Ottawa's a little bit farther behind on that and we're actually cycling up research in Montreal at this point. So I walked in on a research meeting the other day with six -- en France -- six researchers parlaying. And so I think it's going well. And was there anything second part to the…

No, that was it. Thank you.

Okay.

And next we'll go to a follow-up from the line of Andre Benjamin with Goldman Sachs.

Thanks for the additional question. So despite the valuation and the strategy that you've laid out, some investors that we've spoken with are still focused on the fact that this is somewhat of a reversal from prior statements that you didn't intend to be a consolidator of apartment sites. So I guess I just wanted to clarify, do you intend to use the rest of the cash to make more acquisitions, for one; and two, should we expect those to be other apartment sites or other types of assets?

Well first of all, okay right. So first of all I do want to clarify that we were I think pretty clear in saying that we passed on and in specific reference to the marketing investment we made in Mr. Jeff Goldblum, which has been very successful, we felt that we were looking at a set of options which were either they acquire other ILS at valuations similar to Apartment.com acquisition or the Provident Equity acquisition of a share of Apartment Guide. And we just -- we looked at the ROI that we saw with branding and share gain there versus acquiring folks at 14 times EBITDA and we felt there is simply no question. There is we feel that it's obvious -- it's an obvious choice when you can great share, gain momentum, get scale, get cost efficiencies acquiring folks at somewhere in the four to seven EBITDA range and we would entertain additional opportunities that were highly accretive. In that range we felt that they fell within our operational capabilities and that they would be really good values. It's a situation here where we picked up Apartment.com here we had less than 7% share of the online spend of apartment -- of the apartment industry. That was not the trump card. No analyst had a pulling a $1 billion of revenue in 2016 for the apartment space. So we want to get a major share here and picking up very cost effective scale in 6% increment of the spend or 5% increment spend could be attractive and each time you do that, we think it's a prisoner's dilemma for remaining players where their value goes down faster based upon scale growing in other spaces. So I would encourage those investors to keep an open mind as we perform on this and remember that there was a lot of skepticism around our acquisition of LoopNet. A lot of people said, hey you're making tremendous progress with your online marketplace. Don't acquire LoopNet. You're capturing share for them, but we feel very good about our decision to acquire LoopNet. It was obviously the much higher multiple than ApartmentFinder and obviously was much more consolidation, but the folks that are a little skeptical about these things at the time they happen often don't circle back and say, oh you were right, but we would ask people to give us a little bit of room on this one because we feel pretty confident that this is straightforward.

And just to add to that, just to remind everybody what actually happened, when we did Apartments, I think we discussed that there were more deals out there that we had ever seen and that we were looking at other deals. I think that was pretty clear and communicated to investors. I think we came back to investors after looking at the price points that people wanted and said no, we don't want to do that and by the way, we want to focus as Andy mentioned on sort of getting Apartment.com and building that platform now and getting to a success. So I think now coming being able to now pick up other assets with having complementary brands like the Expedia, like the Pricelines, now at a good price point, specifically when all the risks are behind you and now you can have the significant synergies both on the cost side and revenue side, I think it makes a ton of sense. Now of course we will focus down on integrating this platform also and in the future we will again evaluate where we are. But I saw that posted out there that people that we made changes in our strategy. I think you actually go back and look at exactly what was talked about when we did Apartments, we did say we were looking at other ones. We passed on them based on valuation wanting to focus on our core integrating of apartments and I think it actually makes a lot of sense now what we're doing and rents and repeat will do the same thing over the next, 6, 12, 18 months.

Yes, I am not buying that stock at that price. I will buy that stock at half that price.

And thank you for holding. That was our final question. I would like to turn the call back over to Mr. Andy Florance.

Thank you very much. I appreciate it and we did not acquire ApartmentFinder because my initials are AF and ApartmentFinder is AF and my favorite color is orange. But anyway thank you for joining us for this earnings call and we look forward to updating you on what's going on in the next quarter and have a good day.

And ladies and gentlemen, that does conclude your teleconference call for this morning and again thank you very much for your participation and for using the AT&T Executive Teleconference service. You may now disconnect.