CoStar Group, Inc. (CSGP) Q3 2026 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Q3 2026 CoStar Group Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Rich Simonelli, Head of Investor Relations.

Thank you, operator, and thank you all for joining us today to discuss the Third Quarter 2026 Results of the CoStar Group. Before I turn the call over to Andy Florance, CoStar's CEO and Founder; and Robin Rossmann, our CFO, I'd like to review our safe harbor statement. Certain portions of the discussion today may contain forward-looking statements and the company's outlook, and expectations are based on current beliefs and assumptions. Forward-looking statements involve many risks, uncertainties, assumptions, estimates and other factors 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 CoStar Group's press release issued earlier today and in our filings with the SEC. All forward-looking statements are based on the information available to CoStar on the date of this call. CoStar assumes no obligation to update these statements, whether because of new information, future events or otherwise. Reconciliation to the most directly comparable GAAP measures of any non-GAAP financial measures discussed on this call are shown in detail in our press release issued earlier today, along with the definitions for these terms. The press release is available on our website located at costargroup.com under Press Room. You have joined via webcast. Please refer to today's press release on how to access the replay of this call. And remember, we want to give everybody a chance to ask a question. So please limit your question to just 1 during the Q&A, and you can requeue and time permitting, will be able to ask a second question. And with that, I'd like to turn the call over to our Founder and CEO, Andy Florance.

Thank you for joining us today. CoStar Group delivered an outstanding third quarter. Revenue grew 14% year-over-year to $952 million, marking our 62nd consecutive quarter of double-digit growth. More importantly, we delivered record quarterly adjusted EBITDA of $229 million, double the prior year and surpassing the previous record of $193 million from Q4 2021. EBITDA increased $166 million year-over-year to $179 million in the quarter, also the highest in our history. Net income was $74 million, an increase of $105 million year-over-year. Third quarter adjusted EBITDA, excluding the positive impact of Zonda, exceeded the high end of our guidance range due to strong cost control with quarterly operating costs declining 2% year-over-year. We expect to continue to benefit from these savings in the inclusion of Zonda, and we're therefore raising our full year adjusted EBITDA guidance to the midpoint of $830 million, 24% above our previous record of $672 million set back in 2022. That represents an adjusted EBITDA margin of 22%, up from 14% in 2025 and 9% in 2024. As we've done repeatedly over the past 4 decades after completing an investment period, we focus on generating strong multi-year increases in adjusted EBITDA. This time is no different, and we remain firmly committed to our adjusted EBITDA target of $1.25 billion in 2028. We're generating strong margin expansion while simultaneously investing aggressively in high potential future revenue drivers. Our 2026 margin growth came from initial steps to improve workforce marketing and procurement efficiency. Last quarter, we expected to bring our 2026 expenses $100 million below our original guidance. We now expect to bring them $150 million below that guidance, excluding Zonda. A deep review of our expense base over the last 2 months identified approximately $200 million of additional cost efficiency opportunities across procurement, organizational design, technology, infrastructure, marketing effectiveness and post-acquisition integration. That's incremental to the $150 million we expect to save this year which we expect to realize the additional $200 million over the next 12 to 18 months, while continuing to invest in future revenue drivers. Our annualized net new bookings were below our expectations, coming in at $37 million for the third quarter. We attribute this to economic headwinds and slower-than-expected sales force growth. Our renewal rates remained high, but with a growing multibillion-dollar subscription base, we need to continue to grow high ROI sales force headcount. Our sales team met with hundreds of thousands of clients and prospects, the lack the scale to reach the hundreds of thousands of additional prospects we have. We currently have about 2,000 sales professionals, down about 10% from the prior year. We launched Homes.com with a large centralized inside sales team in Richmond, many of them without prior sales experience, not a profile we have traditionally hired. Many have succeeded, others have not. We'll continue to build the Richmond team, but we are shifting most of our growth effort to the field sales professionals with prior real estate and sales experience in our top cities. Field reps who meet with clients face-to-face are, on average, much more productive than inside sales and having visited prospects and clients with our home field sales teams at the agents' open houses and offices. I can tell you, agents are very receptive to local, in-person sales professionals. We have taken action. We expect to publicly announce the appointment of a new highly qualified CHRO within the next 2 weeks. We are decentralizing sales recruiting from Richmond into our major city hubs with recruiters reporting into our field sales leadership, and we are building sales force growth into our sales management compensation plans. We expect to reaccelerate sales force growth in 2027 to serve our growing customer base and reach our prospect opportunities. Nonetheless, the impact of the third quarter net bookings together with lower transaction volume at Domain means we're revising our revenue guidance for the full year. Our updated full year guidance is up $25 million at the midpoint and includes approximately $60 million from Zonda. So excluding Zonda, the outlook is $35 million or 1% lower than in July. Our commercial real estate business generated $492 million of revenue in Q3, an increase of 7% year-over-year and adjusted EBITDA of $180 million, down 2% year-over-year due to investments in upcoming product releases, including Australia, France and the new homes modules. CoStar had a great quarter with revenue of $344 million, up 8% year over year. Renewal rates remained strong at 92%. NPS reached a record 70 and users grew 17% year-over-year to 331,000 subscribers. The CoStar sales force of 485 grew 4% in the quarter but remains 4% below the beginning of the year. We anticipate returning to Q4 2025 levels by year-end. We are launching a transformative new AI-driven research process for CoStar Tenant that I believe can expand the productivity of our tenant researchers more than tenfold, allowing us to offer much deeper, more accurate information on order of magnitude more corporate occupiers. Our Tenant AI agents combined 4 decades of proprietary property level and ground truth from our field researchers with thousands of other sources. So we can now update all 6.7 million Tenant locations every year instead of just updating a small percentage. We're updating with higher accuracy than we've ever achieved. In head-to-head tests, an AI agent using only publicly available data had a 75% error rate. We believe our solution operates with single-digit error rates. Our CoStar's international growth momentum is continuing. In Canada, we now serve all 5 leading brokerage firms, as we do in the U.K., where CoStar subscribers now participate in 80% of commercial real estate transactions, and August renewal rates reached an impressive 94%. In France, following CoStar's launch last quarter, we made a strong start in the migration upselling of over 1,100 Business Immo customers, onboarding our first major global brokerage firm nearly right away. In Australia, we're nearing launch with a proprietary data set of more than 93,000 commercial properties, 45,000 curated listings and 123,000 Tenant records, plus close to 10 million pages of government filings abstracted with AI, which we believe will make CoStar Australia one of the most compelling solutions we've ever offered. This week, we are launching CoStar Debt Solutions Benchmark built on $1.5 trillion of CRE debt across more than 155,000 loans, giving lenders visibility into non-securitizing activity for origination, portfolio risk and compliance. Next year, we expect to add loan origination capabilities to lending workflows. LoopNet generated $89 million of revenue in Q3, up 13% year-over-year. LoopNet's sales force of 220 representatives was up 20% year over year, helping drive a 30% sequential increase in Q3 annualized net new bookings. LoopNet and CoStar sales reps generally call in the same firms with large owners, brokerages and enterprises that makes sense as the decision-makers differ and the solutions can be more complex. For small to mid-sized clients and prospects, one skilled rep can sell both products more effectively, reducing our cost of sales and offering a single point of contact prospects desire. Our U.K. trial of this approach this year has produced very good results. U.K. revenue in Q3 rose 22% year-over-year and silver level renewal rates reached 96% in August, and we are now cross-trading reps to roll out the same strategy in the U.S. later this year. Ten-X is regaining momentum under its new President, Steve Price, winning back volume from the industry's largest brokerages, investors and loan servicers. The third quarter trade rate of 60% was the highest since the second quarter of 2022. CoStar Real Estate Manager grew annualized net new bookings 15% year-over-year, with the majority of new bookings replacing competitor applications, and we're expanding our direct sales presence into Europe. Matterport delivered strong Q3 performance with subscription revenue up 11%, direct sales bookings up 14% and new enterprise customers up 46% year-over-year. Following the rebalancing of the Pro3 commercial model towards subscription July, shipments of the Pro3 reached their highest level since launch, up 52% year-over-year. Matterport's profitability has improved massively since it was a stand-alone public company prior to acquiring it, and we expect Matterport to be profitable by the end of 2027. BizBuySell's Q3 net new subscription revenue grew 282% year-over-year, driven by strong supply side demand and membership increased 23% to a record level. Residential revenue was $460 million in Q3, up 23% year-over-year. This included Zonda from August 21, on a full quarter basis, Zonda would take our annualized single-family home revenue to approximately $500 million. Residential third quarter adjusted EBITDA quadrupled quarter-over-quarter to $49 million. This growth was delivered despite some of the most challenging residential and apartment market conditions in many years across the U.S., U.K. and Australia. In the U.S., the interest rate environment drove the pending home sales index to its lowest level on record in September and multifamily remains under pressure with 8% vacancy, rent growth of 1%, which is real growth of negative and the 43% of properties offering concessions in September, the highest we've ever observed. In Australia, rising interest rates were compounded by the government's shift in residential tax treatments -- investment tax treatments. Sydney home sales fell 27% in the quarter and house prices are falling across every Australian city for the first time in 15 years. That's a very significant headwind for Domain. Apartments.com delivered Q3 revenue of $320 million, up 6% year-over-year. The Apartments.com network reached 48 million average monthly unique visitors, up 10%, and 237 million quarterly visits, up 6%, both the highest since Q2 2024, while tour requests rose 57% and applications for apartments more than doubled. Our sales force remains a key differentiator. The team conducted 191,000 quality meetings in Q3, maintained a very impressive 86 NPS and held our average revenue per property steady year-over-year. One of our top priorities for Apartments.com through 2027 is to grow our sales team. Since Q1 '23, Apartments.com revenue has grown by an impressive 53%, but the sales team has only grown 21% and is down this year. During the third quarter, we suffered the consequences. Our team did not have enough time to both service their existing customer base and pursue new business. Our monthly renewal rate dipped 20 basis points to 98.4%, and we ended the quarter with 91,155 properties, down 2% sequentially. The team still delivered impressive gross monthly sales, averaging 6,355 in gross monthly sales per field sales rep. With our restructured sales recruiting process, we believe we can achieve our growth goals and put more reps in front of clients and prospects with the evidence of our unique renter audience product and position to serve the industry. Renters love our Matterport 3D technology. They viewed more than 65 million tours, up 99% year-over-year and listings with Matterport generated over 4x more leads and nearly 6x as many tours or application requests. Apartments.com remains the most recognized apartment search brand with unaided awareness of 63% in September, up 4 points year-over-year and more than 25 points ahead of the nearest competitor. That awareness drives a unique audience per Comscore. 74% of Apartments.com visitors have never visited Zillow Rentals, 90% have never visited Rent.com, and 95% have never visited Apartment List. If you want to reach apartment seekers, one site reaches far more than any other, and that's Apartments.com. We launched Apartments.com AI this summer and are promoting it nationally, nearly 2 billion consumer impressions by year-end and our partnership with OpenAI lets renters move directly from a ChatGPT conversation to a transaction on our trusted inventory, extending the reach of Apartments.com in an AI world. Attribution is another area where a large sales team will help us. Most of our clients reporting credits, the last touch, often the community's property website, and they think that's the source of the lease, missing the discovery touch point that first introduced the renter to the property. In September, we launched the attribution challenge with Hyly.AI, an independent measurement partner to analyze clients' actual lead and lead sources. The first 6 clients that took the challenge found that Apartments.com delivered on average more than double the leases they're reporting indicated twice the value they believed on a cost per lead basis. And in less than a month, 75 property management companies have signed up. Homes.com delivered strong Q3 growth with revenue up 50% year-over-year to approximately $31 million. We ended the quarter with more than 36,000 members with average subscriber pricing increasing to 271 in September. We welcome Felix Kusch as President of Homes.com in September. Felix brings extensive real estate portal experience, including leading immowelt in Germany and Immoweb in Brussels. We introduced Platinum Premium Advertising in mid-September to Homes.com, a classic depth advertising product like the premium levels we offer at Apartments, LoopNet and Domain. Platinum moves a listing on -- that an agent selects the top of the sort order with 5x retargeting and extensive audience boost across the internet. Member listings generate 50x the exposure of basic listings, but premium listings generate 233x the exposure. With the introduction of Platinum, the average sales price increased 58% in October to $429. Sales productivity also reached its highest level of the year. Homes.com generated $7 million of annualized net new bookings in the third quarter despite reducing inside sales reps from a peak of 655 a year ago to 267 today. When we demo Homes membership to an agent, we consistently achieved close rates above 40%. The objective is more demos and expanding our field sales team is how we get in front of more agents. Brand health remains strong, unaided awareness rose to 37% in June. Net Promoter Score held at 41, and more than half of September traffic came from direct and organic channels, reducing our reliance on paid traffic. We are adding Apartments.com's independent owner rental features to Homes.com to expand our revenue at the lower end of the market. In Q3, Homes.com renter traffic increased 12% year-over-year, organic traffic rose 30% and leads from Homes.com for Apartments.com multifamily customers grew 462% Domain delivered Q3 revenue of $70 million, down 5% year-over-year on a pro forma basis with core residential revenue flat at $48 million and residential depth advertising down 5%. Domain's revenue is transaction-based, not subscription-based, so it's sensitive to swings in transaction volume that I described earlier. Dozens of CoStar Group Domain and Homes.com product managers and engineers are in advanced planning to combine the best of Domain and Homes.com products on a single lower net cost global platform which we believe will enhance our competitive position in both the U.S. and Australia and drive EBITDA expansion. We anticipate releasing combined platform, the combined platform in 2027 after which those teams will integrate our U.K. platform OnTheMarket as well. OnTheMarket has delivered 29 consecutive months of positive net new bookings. We serve over 17,000 customer branches and new homes developments up 6% year-over-year. Total listings are up 14% to 875,000, more total stock than Zoopla per third-party data, and our leads grew 7% to 4.7 million in Q3. Land.com revenue grew 8% year-over-year, and annualized net new bookings increased 22% driven by 44% growth in signature ads and a 15% reduction in cancellations. We welcomed Zonda to CoStar in August as the leading B2B homebuilder information platform, serving more than 3,000 builders, developers and suppliers and lenders. Zonda extends our proprietary data software and marketplace model into new home construction. Zonda positions CoStar in a nearly $1 trillion annual market that remains reliant on fragmented data and manual processes. Its subscription analytics provides lot level insight from entitlement through sales, and it will expand Homes.com's new construction inventory and builder advertising opportunity. This month, I had the opportunity to meet with a number of Zonda clients, the leaders in home building. and the reception has been very positive. I'm struck by the similarities to an earlier Apartments.com. When we purchased Apartments.com, the industry had not yet benefited from demand creation and scale. Once we began marketing Apartments to major consumer audiences, property managers loved the demand we created, and we grew Apartments.com revenue from $85 million to well over $1 billion today. American homebuilders produce a great product, and I believe we can create similar demand at scale for new homes through Zonda and Homes.com. Today, we announced a definitive agreement to acquire Vexcel, the operator of the world's largest and highest-quality aerial imagery program. Vexcel's cameras produce the aerial imagery behind Bing maps at Microsoft, and it was spun out as an independent company in 2016. Since then, it has built something nobody else has. Vexcel designs its own camera system in Graz, Austria, flies its own fleet of aircraft and collects more than 60 million images a year across 45 countries, much of it at 7.5 centimeters, 16x more pixels per square meter than the roughly 30-centimeter resolution of commercial satellites. That combination of quality, accuracy and global coverage is why the largest technology companies in the world who could buy imagery from anyone buy it from Vexcel. Vexcel is a strong business with roughly $140 million of revenue in the last 12 months, growing more than 30% on reoccurring multiyear data contracts and profitable with an adjusted EBITDA margin of around 20%. Its camera and processing road map should keep lowering the cost of capture, sharpening resolution and shorten the time from flight to deliver data. That's before taking into consideration what we believe will be significant synergies from bringing Vexcel into CoStar. Since 1989, CoStar Group has deployed thousands of researchers driving tens of millions of miles to find, document and photograph real estate tenants and construction. Direct observation of on-the-ground facts that has differentiated CoStar from its competitors and made us the leading CRE information solution in the world. Advances in aerial photography and LiDAR let Vexcel produce extremely high-resolution images and precise measurement of every kind of property in the built environment, combine those images with rapidly evolving ability of AI to recognize and extract information and features from them, and we can now create a transformative new ultra low-cost proprietary data source. Every aerial image we own becomes a data record. Computer vision reads a property's physical attributes straight off the pixels, roof material, parking count, architecture, condition, year built and hundreds of more data fields. All into a structured attribute database covering the entire market dramatically reducing the cost and time it takes to expand our geographic coverage and improving our data quality and depth of data. Vexcel collects data from 45 countries in more than 320 major global metros and sees hundreds of millions of buildings and houses clearly from the air. It took us 4 decades to inspect several million properties. With Vexcel and AI, we believe we can observe and capture valuable data on hundreds of millions of properties in 24 months. CoStar can differentiate the data we collect from the air and from that of competitors by connecting with all the intelligence we have on who and what is inside these properties. Real estate brokers, developers, construction companies, utilities, insurers, state and local federal governments buy both CoStar and high-resolution aerial imagery. So combining these 2 companies, we can cross-sell our solutions highly efficiently. Vexcel has reached $140 million in revenue with just 6 salespeople. We believe we can accelerate its growth by expanding its sales force and leveraging our 2,000 salespeople who already have relationships with many of Vexcel's most important prospects. Robin will address more details of the Vexcel acquisition in his remarks. We look forward to welcoming Vexcel to CoStar Group. It is clearly aligned with our mission of digitizing the world's real estate with an incredible ability to leverage AI to create proprietary real estate data of durable value. So in his decade at CoStar Group, Robin Rossmann has proved to be an invaluable executive in a number of roles with increasing responsibility. I have had the honor to work with a number of great CFOs. And I can already tell that Robin is a great fit. And I think you can see that in some of our cost control initiatives we're achieving. So I'm pleased to turn the call over to him for his inaugural earnings call.

Thank you, Andy. It is a real honor to be in the seat. Over the past 3 months, I have loved building on my decade of operational experience across the group by analyzing the financial drivers of our business in detail and comparing them to both internal and external benchmarks. This has led me with conviction in 2 things: Firstly, the strength of our products; and secondly, the opportunity to realize significant efficiencies that can both improve margins and drive revenue growth. In many cases, the opportunities are the same as those that I found when running our European operations just at a larger scale. In Europe, we found savings equivalent to approximately 25% of the cost structure, whilst accelerating annual revenue growth from 9% in 2024 to 14% over the last 2 years. We did this by reviewing the necessity of every single role across the organization and the return on investment of every major expense. Just like any organization that has grown rapidly, both organically and through acquisitions, there is an appropriate time to step back, realize integration savings and reshape the organization to align with the strategy going forward. Together with Andy, we have commenced a deep review of expenses and to date identified approximately $200 million of efficiency opportunities. This is in addition to the $150 million in anticipated savings this year from original guidance. If you do the math, that is still well below the 25% we found in Europe; that would be $750 million. But this is early days, and I'm still hunting. In Europe, we completed this exercise over 2 years, and we reinvested a significant portion of the savings. That's what enabled us to launch new products and delivering an acceleration in revenue growth. Likewise, for the group, we expect to use the efficiencies to both improve margins and invest to grow revenue. Accordingly, these savings give me strong conviction that we will deliver our adjusted EBITDA target of $1.25 billion in 2028. With that in mind, I'll cover 6 things, the quarter against guidance, the commercial and residential segments, bookings, cash flows and capital allocation, updated guidance and Vexcel. So starting with the quarter against guidance. Revenue in the third quarter was $952 million, up 14% year-over-year and 7% on an organic basis. Revenue excluding Zonda, which was not in our guidance, was $933 million, about $7 million below the midpoint of our guidance. The shortfall was in residential with 60% coming from lower transaction volumes in Domain and 40% lower subscription revenue in Apartments. Adjusted EBITDA in the third quarter was a record $229 million, double the prior year and up $45 million or 25% from the second quarter. Excluding $3 million from Zonda, adjusted EBITDA was $16 million above the top end of our $190 million to $210 million guidance range. Adjusted EBITDA margin in the third quarter was 24%, that's 10 points higher than a year ago and the seventh consecutive quarter of expansion. Net income in the third quarter was $74 million against a net loss of $31 million a year ago. Adjusted EPS was $0.38, up 65% and above our $0.31 to $0.34 range. The outperformance came from cost management. Adjusted operating expenses were down 2% year-over-year, as Andy said. And if you pro forma to include the savings, we've achieved in Domain and Zonda, it was down by an even larger 5%. Our 2026 cost base is running about $150 million below our February guidance, up from the $100 million we described in July. Now if we break down that $150 million, roughly $100 million or 2/3 is run rate savings that we will keep going forward and the remaining $50 million relates primarily to lower-than-anticipated sales headcount. Moving into the segments. Commercial revenue in the third quarter was $492 million. That's up 7% year-over-year and in line with guidance. CoStar revenue grew 8% to $344 million with subscriber accounts up 17%. The gap to revenue growth reflects changing customer mix and the renewal rate remains a very strong 92%. LoopNet grew 13% to $89 million after delivering the highest net new bookings quarter of 2026. Other commercial revenue was $59 million, down 8% year-over-year driven by Ten-X where we expect the turnaround Andy described to show in revenue from the first quarter of 2027. Matterport subscription revenue grew 11% and is now 70% of its revenue. Commercial adjusted EBITDA was $180 million, a 37% margin and above the $162 million to $172 million we guided. Third quarter margin was 2% below last year, reflecting prelaunch investment in Australia, Real Estate Manager, New Homes and Debt Solutions. Excluding this, the margin would be close to 40%. Moving on to residential. Third quarter revenue was $460 million, up 23% as reported and 8% organically. Apartments.com grew revenue 6%, down from 9% in the second quarter. ARPU was unchanged as our sales team held price, while paid properties ended the quarter at 91,155, up 5% year-over-year, but down 2% from June. Homes.com revenue in the third quarter grew 50% to $31 million. Membership was more than 36,000, up 47% year-over-year and roughly flat sequentially. So growth was driven by pricing and mix. Domain revenue in the third quarter was down 5% pro forma in a weak Australian market, particularly in Sydney and Melbourne, where its premium listings are concentrated. Residential adjusted EBITDA in the third quarter was a record $49 million, up from $12 million in the second quarter and $118 million improvement on prior year. Excluding Zonda, residential adjusted EBITDA was $46 million, well above our $28 million to $38 million range. On to sales performance. Net new bookings in the third quarter were $37 million, down from $84 million in the third quarter of last year. The decline was concentrated in residential as a challenging economic environment compounded by insufficient sales capacity impacted Apartments.com and Homes.com bookings moderated following the sales force reduction earlier this year. Where we have added sales reps, we are seeing results. Among our largest brands, only LoopNet added sales headcount in 2026 with its North American team up 20% year-over-year, enabling them to deliver their strongest bookings this year in Q3. As Andy mentioned, we have taken action. Our sales head count has stabilized in the third quarter, and we expect it to rise again next year. As a result, we expect the third quarter to be the low point for bookings with sequential improvement in the fourth quarter. In the third quarter, our contract renewal rate was 88%, with customers of 5 years or more, renewing at 94%. Subscription revenue on annual contracts was 72% of the total. Moving to cash flows and capital allocation. Operating cash flow was $188 million in the third quarter and $455 million year-to-date. This is post the $109 million brand settlement. So excluding that payment, year-to-date operating cash flow was up roughly $300 million on the prior year. We repurchased 2.7 million shares for $81 million in the quarter, bringing 2026 repurchase to 16.5 million shares for $668 million. We expect to complete the $700 million 2026 program in the fourth quarter. We closed Zonda on August 21 for $815 million. Zonda's pro forma third quarter revenue was $42 million, 3/4 of which was subscription, which grew 4% despite a difficult new homes market. Turning our attention to guidance. This now includes Zonda, which we report within residential. For 2026, we expect Zonda to contribute approximately $60 million of revenue and $10 million of adjusted EBITDA and to be accretive to adjusted EPS in its full year. For the fourth quarter, we expect revenue of $976 million to $996 million, up 10% at the midpoint. Commercial revenue is expected to be between $490 million and $500 million, up 5% at the midpoint and residential $486 million to $496 million, up 14%. We expect fourth quarter adjusted EBITDA of $275 million to $295 million, a 29% margin at the midpoint and more than 900 basis points above the fourth quarter of 2025. With commercial at $177 million to $187 million and residential at $98 million to $108 million. For the full year, we are updating revenue guidance to $3.75 billion to $3.77 billion, up 16% at the midpoint. The $35 million shortfall to prior guidance covered by Andy is split evenly between lower Domain transactional revenue and residential subscription revenue. Commercial revenue is expected at $1.935 billion to $1.945 billion, up 9% and residential at $1.815 billion to $1.825 billion, up 25%. We are raising full year 2026 adjusted EBITDA guidance to $820 million to $840 million, that is $30 million higher at the midpoint of our prior guidance, $20 million excluding Zonda and $60 million above February. It represents a 22% margin, more than 800 basis points above 2025. We are raising full year 2026 adjusted EPS guidance to $1.38 to $1.41 on 405 million weighted average shares, $0.04 above July and $0.12 above February at the midpoint. On Vexcel, announced today, the purchase price is approximately $730 million to be funded from cash on hand of $500 million at the quarter end and our undrawn $1.1 billion revolver. Andy has already shared its profitability and high growth trajectory. The resulting deal, excluding any synergies, is accretive in the first year and by year 2 is more accretive than an open-market CoStar Group share buyback. Taking into account modest synergies, the deal is 4x more accretive than a share buyback by year 3. For the avoidance of doubt, we have not included Vexcel in guidance. So to close, we've delivered a record quarter for revenue and adjusted EBITDA, 10 points of margin expansion and a raised profit outlook. With that, operator, over to questions.

[Operator Instructions] And our first question comes from George Tong with Goldman Sachs.

Hi, this is Sammy on for George. Thanks for taking the question. Starting off on bookings, you cited both economic headwind and slower sales force growth as a reason for the step down in bookings. When you look at the prospect opportunity today, how are you thinking about the portion of demand that is already present but cannot be fully addressed, versus the demand that still needs to improve before additional sales capacity can generate stronger bookings? Thanks so much.

[Operator Instructions]

Can the operator hear us?

We can hear you.

So should we start again here? So we lost connection for a second there. Okay. So George -- I'm sorry, Samuel. Samuel for George. We can track comfortably the massive prospect universe for Apartments.com with the information we have. We can see the LoopNet prospect universe, the additional CoStar universe, the LoopNet universe, and the Homes.com universe and others. So we can see hundreds of thousands of prospects that we are not able to reach currently with the current scale of sales force. And so we do not need demand drivers to return in order to grow revenue as we grow sales force. You can see that where LoopNet grew 20% year over year in sales force, something like that, revenue accelerated with it. So we anticipate being able to return to growth in the right areas of our sales force, in the most efficient places, and re-accelerate revenue going into 2027.

Our next question comes from Pete Christiansen with Citi.

Andy, Robin, you lowered revenue expectations given the bookings, but at the same time, you are finding a lot of these cost synergies and expecting to maintain your long-term EBITDA framework here. I just want to get a sense, at least for '27, should investors think of the story turning to bookings re-acceleration, margin expansion, or some combination of that? Which of those do you think would be a larger driver?

I think it would be a combination of the two, for sure. So we think there is bookings expansion opportunity, and then Robin and I are definitely on the hunt for margin expansion and think there is a lot of opportunities. You heard some of the numbers Robin presented. If you looked at the efficiencies -- cost efficiencies we achieved in Europe and you bring them to the global operations, that is a huge opportunity. But, while we are looking to manage or control our costs, we are simultaneously investing in new revenue drivers and new salespeople in an efficient way. So both.

Yes, just to add to that, when we went through this process in Europe, the impact of becoming more efficient was not reducing our revenue growth, it actually accelerated it. And certainly when you look at the opportunities that we have found to date, they are not related to reducing revenue growth going forward.

Our next question comes from Alexei Gogolev with JPMorgan.

Andy, can you talk more about the Vexcel acquisition and maybe elaborate on potential CapEx, aircraft and capture requirements, possible data rights, and exclusivity, as well as contract duration with some of the customers? And how you will sell it? Will it be standalone or bundled, and whether you plan to deploy dedicated Vexcel reps?

Okay, I think we just picked up 30 questions. I will see how many I can remember. And Alexei, if I forget some, just circle back and remind me. So it would be, in terms of how we sell, we will continue to sell both data contracts, for sure. That is a continued large opportunity, particularly with state, local governments and utilities. There are thousands of those targets out there. But we will do relationship management with our existing 2,000 CoStar salespeople. So if we have a relationship with the utility in Los Angeles or local government in Los Angeles with a CoStar rep, they can work with a sales engineer from Vexcel to chase that sale. We also anticipate -- it's early days, but we also anticipate putting enhanced functionality into CoStar around aerials. We are imaging aerial imaging. We are aware that major brokerage firms developers have seven-digit budgets often to purchase -- at city levels, to purchase aerial photographs and imagery, and we will be putting some of that into the CoStar product as well. In terms of exclusivity, I think this works a little bit like Matterport. So Matterport continues to grow as a standalone product, but because it is a combined entity with CoStar, the team at Matterport does a great job in making sure their products are responsive to the needs of our core product areas, whether it be Apartments, LoopNet, Homes. And so they are growing on their own, but they are also accelerating growth in our core products. I think it will be similar here. We know what we are looking to add into CoStar databases from the Vexcel acquisition and what we are looking to add into some of our product areas from the Vexcel acquisition, and that will not interfere with Vexcel's ability to pursue its current core business. So we will be pursuing both. Alexei, what did I miss?

Main thing, maybe like CapEx that is required for this business.

The CapEx, I will let Robin hit it, but just before he does, CapEx is actually not that large in this business. For our specific uses, in order to -- we think that there is up to 1,000 fields of data you could pull on a building you see from the sky. In order to achieve the full data extraction we want to achieve, now remember, this is data extraction across United States, Australia, monitoring construction activity in a much higher frequency than ever monitored. This includes Europe, Japan, Australia. In order to achieve the full potential of extraction in the intermediate term, there might be a $20 million CapEx incremental over a two-year period, probably about as fast as you can manufacture the cameras we need. But I will turn that over to Robin.

Yes, I think just to add to that, the CapEx is a meaningful part of the operations at the moment. It ranges $8 million to $10 million a year. So there might be a short-term spike where we do some extra R&D, but we would expect it to return to that level.

Our next question comes from Ryan Tomasello with KBW.

This is Huan Ong for Ryan. Could you help share what the Q4 outlook includes for multifamily revenue growth? And broadly, just what kind of visibility you have into the near-term revenue growth there, just given the recent bookings pace? And also if you are thinking about maybe other tactical adjustments to the multifamily strategy, given the competitive environment that you are in.

Robin is pulling up what we're going to answer on the fourth quarter element of guidance. On the tactical side, I think I presented some of that. One of the things we are doing is we are embedding this technology into our clients' websites so they can actually see the source of their lead flow. We believe we are pulling twice as many leads as they can tell from their in-place lead generation systems. We think that represents huge value to them and allows us to continue to maintain a value premium over other solutions. The other tactical thing is you saw the lead flow from Homes.com up 450%, and that is an ongoing process. So we believe that Homes.com will be a growing and growing bigger source of lead flow to Apartments.com, and the combined solution will be quite valuable. So we are actually pretty confident in where we sit right now in a competitive positioning. And remember that there is a massive, massive untapped market in the rental segment. So no competitor has 40% share of the opportunity, so there is plenty of room to grow into the greenfield space.

And then just to add on the growth rate being assumed for the fourth quarter, it is mid-single digits.

Our next question comes from Curtis Nagle with Bank of America.

Okay. Great. Maybe somewhat of a high-level question. I am just trying to understand sort of what is going on with the sales force, and I guess where the biggest holes are in terms of capacity by segment. Did you cut too deep? I think there might be somewhat of an issue of not having the right tenured people in the right place. Are you seeing attrition? Just, if possible, sort of holistically, I guess, frame kind of what is going on.

Yes, sure. I think it is a different story based upon whatever -- which brand you are looking at. I think LoopNet has done a decent job keeping up with the growth in its sales force and still did not meet quite its expectations. I would say that CoStar and Apartments, the recruiting side and the management side could have done a better job at continuing to grow. I mean, this is the age-old story of, with a growing subscription base you have at a fixed renewal rate, you have a growing churn number you have to cover with your sales force. So it is -- frankly, we have made some changes in our recruiting team and HR team to pursue the performance that we expect to achieve in those areas. With the Homes sales force, there was -- growing a large inside sales team, there were a lot of people hired who were new to sales. And you are going to get some churn when you do that. Some folks who are right out of college will churn. We knew that over the five-year horizon, we wanted to have a very substantial field sales force for Homes.com. I believe in that very strongly. Not something you can do in the first year or two. It is just too complex to do initially. So growing national field sales teams is a difficult task and takes five years or so. And we are halfway into that process. But I have actually been going out with some of our field salespeople, attending open houses on Saturdays and the like, the way we do in Australia. Super effective. The agents, when you visit them in their open house, and you bring them an orchid and some cookies, they love to talk to you, and we are getting high demo counts from that activity. And as you know, we have very high close rates. And it also -- that field sales also allows us to service those accounts better. So, with 15 to 20 folks in, say, Washington, D.C., that allows you to have open houses alone, allows you to get 10,000 face-to-faces a year, which is about the size of the top prospects in the market. So I am very optimistic about that, and we will be focusing heavily on growing that field sales force. So I do not want to diminish the accomplishments of a lot of the inside sales teams. There are a number of successful folks in the inside sales teams who are growing and maturing. But it has been a process, and we are making changes to how we recruit and how we incent the managers to achieve their growth targets.

Our next question comes from Jeff Meuler with Baird.

Andy, just within Apartments.com, what are the specific metrics that give you the most confidence that the primary challenge is sales capacity? And then can you just address regrettable attrition among sales force headcount in a tougher selling environment or tougher macro, just given that you have been talking about the need to expand sales capacity for a while?

Yes. I would -- so I would say that the vast majority of the attrition in the sales force is in the inside sales team, with Homes.com in Richmond, and that's directly attributable to hiring people right out of college with no prior sales experience. So all attrition, I would say, is regrettable. But I look closely at what percent of the attrition from that group is from the top 25% of performers, and it is actually pretty low. Most of the attrition is in the lower performing ranks. The attrition inside of the Apartments.com and the CoStar and the LoopNet area is not a big driver here. There is some elevated attrition in a tougher selling environment, but not notable. And then, in terms of what metrics give me optimism around Apartments.com, I think I ran through them. The unique audience we have, the very high brand awareness we have, the growth -- continued growth in lead flow, the growth in lead flow from Homes.com. So I spoke with Fred yesterday, just reviewing all those things. Fred Saint, who is the President of Homes.com. We both feel pretty optimistic about our ability to accelerate bookings into 2027.

I think, Andy, the one that I'd add to that you also mentioned is the gross monthly sales by our field sales team is 6,350 per month per rep, which is by far the highest in the group.

Any sales force. That is an important point. So preserving the price, we are holding the same ASPs and the gross sales production from the reps in the field is huge. So if you look at 6,000 some, that is 72,000 annual gross sales bookings per month. There is a lot of demand out there to buy the product, so that is clearly the case.

Yes. When you add the extra sales reps, your cancellations also come down because you have more time to service those customers. So we are confident on the gross level, and we are confident that adding reps reduces the cancellation rate back to its more normal levels.

And I also have to say that the leadership in Apartments.com from Paige Forrest, who is running the whole group, from the RVPs down to the RDs, this is a seasoned, seasoned team that is quite capable of guiding the group back into the growth numbers we are looking for.

Our next question comes from Brett Huff with Stephens.

Appreciate the time. Question on Apartments.com, a little bit different. We're still getting lots of questions on sort of the changes in AI, top of funnel, LLM discovery and things like that. Andy, you've talked about that. So any update on that would be helpful, just to give us some comfort that we've wrangled that. And then related to AI on Apartments.com, we're still getting lots of questions on how are we keeping the data proprietary, what percentage of the data is proprietary for Apartments because I think that is maybe getting convoluted with some of the competitive questions that people have. I don't know if that makes sense but would love any updates on those.

Sure. So I hope you noticed when ChatGPT released their latest model, they featured Apartments.com in their release PR as an example of an outstanding solution connected to ChatGPT. So the GAO still remains a LLM sourcing of leads into any of these sites still remains low single digit, but we are getting direct connections in from a lot of the models. So I think we're doing quite well there. But when you look at our metrics, we're seeing growth in traffic to the site, in lead generation in the site. All the core metrics are continuing to grow and improve. Then when you look at Homes.com, up 450% on lead flow into Apartments.com. The metrics are positive and are going in the right direction. We are very optimistic about the Apartments AI. We have a lot of, I think, very good marketing with Jeff Goldblum, encouraging people to use the enhanced functionality of Apartments.com with Apartments AI. So I think that we are pretty optimistic about where things are going. And then overall, looking at all of the initiatives within CoStar Group around AI, there is a trend here towards us producing dramatically more content at higher quality, greater depth, at dramatically lower cost, and content that's proprietary. Whether it be the Vexcel acquisition or whether it is the project that we are doing in Australia that I am not going into detail on, or the way we are now capturing corporate America using our proprietary property data and our ground truth inspection of the properties. We are developing more and more data than we have ever done before. U.S. copyright law still stands with Apartments.com, and there are instances of people violating copyright law and taking copyrighted content, particularly imagery, that, though it may work its way through court over courses of years, still, the law is the law, and ultimately that will pay off for us, and not pay for the folks who are abusing those copyrights. So there is a lot of activity that has always been there, where people attempt to scrape sites and build information systems off the site, and you battle that continuously. But we still have the core of what we have got here is, I guess, 75% of our content is not visible to the broader internet. And the LLMs are definitely working with us in a positive way, sourcing us and directing content to us -- directing traffic to us.

Our next question comes from Stephen Sheldon with William Blair.

On the cost savings, can you just give some more detail on the $200 million that you are expecting to realize next year, some of the bigger components of that, and whether some could be reinvested? And then, are you including the planned reduction in profit drag from Homes.com of at least $100 million in that number, or is the $200 million, I guess, would that be on top of it? Any detail there would be appreciated.

It is on top. Let Robin dive into it. He is living in Claude.

Yes. At a high level, the $200 million you can split into three buckets. A third of it is organizational efficiencies. Just looking at places where we are doing things in silos, where we have roles that do not make sense anymore and becoming more efficient. So that is about a third of it. Another third of it is integration synergies. So these are known savings that we get as we continue to integrate products and systems into our core platforms. And another third of it is procurement-related savings, and improvements in marketing ROI.

Our next question comes from Surinder Thind with Jefferies.

Robin or Andy, can you maybe help me understand the reaffirmation of the 2028 adjusted EBITDA guidance, given the roughly $150 million in savings plus another $200 million? Is the idea that the bulk of that, I guess, gets reinvested into new projects? Or like why wouldn't the '28 adjusted EBITDA guide go higher?

Yes, we haven't gone through a whole new planning cycle and redone forecasts for the long term. So that's something we'll do as we go towards the end of this year. And what's this is really focusing on where we can make significant improvements in the short term that we'll realize over the next 12 to 18 months and giving us that confidence that we can reconfirm those targets. So, there are decisions we still need to make about how those savings are allocated to margin improvement or investments.

Got it. So it sounds like there's probably -- basically you still got to go through the longer-term planning cycle, but this is just what you've identified in the near term, and you'll make those decisions at a later point in time.

100% right.

That's right.

Our next question comes from Nick Jones with BNP Paribas.

On Apartments.com, I think you mentioned maybe a little bit of churn on the supply side due to some, I guess, lack of servicing on the sales force and kind of not being able to target on more, adding, I guess, new logos. I guess, can you speak to kind of what is driving the churn beyond just servicing? Are they going to competitors? Are they kind of going it themselves on Google or Meta? I guess just curious as to kind of what the conversations are as those are churning.

So I would say that the servicing at Apartments.com remains exceptional, as evidenced by the extraordinarily high NPS rates that we've got there. You always -- we do have headwinds here. So you have negative real growth in rents, and you still have elevated vacancy rates, likely well above people's pro forma expectations for their properties. So you'll have that relationship between the owner, the owner group, and the property manager, where the owner group is looking for cost savings aggressively, and the property manager is trying to figure out how to achieve that. So that creates some churn pressure in the system, always has. You will get people periodically, if you're a marketing manager for a property manager in a particular market, it's always appealing to explore your own SEM strategies to your website. But ultimately, as we mentioned, when you actually track core source or first source, we are the primary core source for those leads to your website. So usually that's a short-term adventure as they go into their roll your own SEM. And you do have aggressive pricing from competitors and very aggressive incentives to try things out. So that also creates some churn. But I am proud of the sales team for holding our value prop up and holding our ASP in a tough environment. And again, I'd point to -- the bigger issue, is that we've got a lot of folks that we don't have time to get to because of the growth of the core business.

The only thing I'd add to that is there is a bit of a mixed story there, too. As you'll know, we have significantly grown the inventory that we have in under 50 units. And those smaller properties tend to have cancellation rates that are 4x higher than the larger ones. So some of that growth is missed.

So during the churn at Rent.com and during the switch out as Redfin got out of that business with Rent.com, we picked up a mix shift to the smaller. And we don't regret it, but that smaller end does churn higher. And then also, there's been more growth in our sales force at the inside sales team. They tend to be selling at the lower end, and again, there's more churn at that lower end. Often, you're leasing up a 40-unit community. You have 4 units open, you lease 3, and you pull back your advertising because you've got 1 left. And then you may turn it back on a couple of months later when you have another vacancy or 2. We are shifting to prioritize more at the upper end and have more field salespeople, rather than continue to grow the inside sales team at the same pace.

Our next question comes from Andrew Boone with Citizens.

I wanted to go back to churning at Homes.com. You guys mentioned it in the prepared remarks, but can you give a little bit more qualitative analysis of what are agents thinking? How much more runway do you guys have? How is the whole process of rolling out Platinum?

Thank you for the question. It is and has always been a part of the thousand-year plan. So when you look at the successful and very profitable real estate portals, whether it be Apartments.com, LoopNet, Domain, REA Group, Rightmove, Scout24, any of them, the vast majority of the revenue from these platforms comes from depth advertising or advertising beyond the basic subscription. So with Apartments.com, I would imagine it's 80 some percent is in-depth advertising. With Domain, it's probably 87% -- 85%, 87% depth advertising. I think with, say, an REA Group, it's 90 some percent depth advertising. So everything we've been selling to date up until September with Homes.com was basic membership, just participation. So we went ahead and launched the Platinum advertising in September, and it sorts your -- it's -- if I am a member of Homes.com, similar to what we do with Domain, I get my 10 listings, and they are all above the basic listings, and they get 50x more exposure than a basic listing. When I go for Platinum, I select one of my properties, it is priced per property, and that one then sorts above the membership listings, and it typically gets approximately 233x the exposure, gets more audience boost. It also includes Photography services. And it is typically somewhere from the $400 a month on up to $1,700 a month, something in that neighborhood. It is an annual contract, and so you can rotate one property at a time up through that. You can put multiple properties in there. It has got a bigger placard, bigger presentation of the actual agent. I think a huge part of the appeal is that if I am a very successful agent in a market, say Orange County, my ability to have my name and likeness and brand pinned to the top rail of a site that has massive traffic and has huge share of Google SEO, SEM, that is just an amazing billboard in that market, since 100% of home shoppers are online. So we anticipate that that begins a 20-year journey of selling different depth levels. We are starting with Platinum. Through time, we will introduce more and more depth levels. So, with Apartments.com, I probably have seven or eight different depth levels. But this is the first one, and we begin that journey.

Our next question comes from Scott Wurtzel with Wolfe Research.

I am just wondering if we can maybe talk a little bit more about the bookings pipeline on the CoStar Suite side of the business, specifically around maybe some of these new products that you are introducing. Just wondering if that can help contribute to a re-acceleration there. Thanks.

Sure. So there are a number of new initiatives there. I am very optimistic about the Australian CoStar. There are some opportunities there that I think allow us to launch that product with a very compelling value proposition. The bulk of that would happen in -- those bookings would begin happening in the first and second quarter. There will be some bookings probably this year, but bulk of those bookings start happening first, second quarter next year. In new homes, we are now in the process of integrating Zonda and CoStar together. That will take a little bit longer to start accelerating that opportunity. The integration of Real Estate Manager and Visual Lease and CoStar, I think, is an incredibly compelling product offering. That will be occurring in the later part of 2027. With the Vexcel enhancements, I think that is probably a late 2027 initiative. With what is happening with CoStar Debt Solutions, that is near term, and that is very strong right now, and the benchmarking capabilities, I think, are outstanding. I think that is very compelling for any lender to have that view of their portfolio. Being able to see how my LTVs, my CECLs, my premiums compare to other lenders is incredibly valuable. So, I think that gives you a sense of it. But I think one of the big ones there is just the sales force growth has not kept up with my expectations and needs to improve, because there are many, many people that are good prospects that we are not reaching right now. I do think that the -- combining the go-to-market strategy at the middle lower end with LoopNet and CoStar will allow us to have a more productive sales force. It is -- the experiment in the U.K. is working. We are getting typically 50% of the CoStar customers who are not subscribing to LoopNet, and 50% of LoopNet subscribers who are not subscribing to CoStar. And by servicing them as one group at the middle and lower end, you can get good cross-selling. So I think that is another driver in the intermediate term. Short to intermediate term.

Our next question comes from Jason Haas with Wells Fargo.

I am curious if you envision consumers increasingly using personal AI agents to search for apartments, and if so, can you just talk about how that affects the Apartments.com business model and if there is any way to modify that?

We are seeing that. And ultimately, those models are bringing people back into Apartments.com to do the transaction. So as we improve these, and with Homes and Apartments, you are -- people do build agents, but it does lead them into the source sites where the content, the imagery, the Matterport, the ability to do the actual transaction applications in our site. So that is working, and we are seeing our integration with ChatGPT, we are seeing good results there. So again, you need systems of record and transaction systems, and you need the rich environments of imagery that we are providing. And none of our products are standing still. We are evolving those products rapidly and improving the quality and depth and the value of being brought there, for the ultimate sort of end stage of the transaction.

Our next question comes from Craig Huber with Huber Research Partners.

I have a housekeeping question first. Can you tell us what your losses were at Homes.com in the quarter? Were they roughly $125 million? In the past, you've said you think you're going to get to $550 million of losses this year, basically come hell or high water. But where were you at in the third quarter, please?

I can -- I do not know if we are disclosing at that level of granularity, but I would say we are doing slightly better than that goal. And I know exactly where it is. I asked just before the call. So we are doing better than that.

Yes. I would add we are definitely on track to hit our commitments of no more than $550 million for the year.

Okay. I appreciate that. If I just ask my main question, you talk a lot about your sales force. Can you just sort of, in your mind, give us a little more granularity on your expectations to grow your various sales forces, say, over the next 180 days? Where should we expect the biggest growth on a percentage basis to come from? What few areas, please?

Apartments.com, CoStar, and field home sales are where the greatest growth would come from. And again, transitioning from having a centralized recruiting team in Richmond, we will continue to have a centralized recruiting team, but identified, it's about 20 top cities where we typically have 30-plus salespeople. So in Chicago, we might have 50 salespeople working out of Chicago, field salespeople across all the brands. We are going to be putting a dedicated recruiter in each one of those offices. They report to the most senior sales leader in that office, that all sales leaders, then there is a dotted line to the sales -- straight line to the sales leader, dotted line back to recruiting. So we will be doing more in-person, face-to-face recruiting in the actual markets. That allows -- the bandwidth from someone like that allows us to more than comfortably cover normal turnover and then also achieve 30% field sales growth. Just to wake everyone up, putting both carrots and sticks in the compensation plans for all those managers to do the right thing at the right time. General sort of sales force health, but pretty straightforward. I remained very -- I'm very impressed with the production numbers we are getting from Apartments.com, moving 6,000, 7,000. And I am impressed with the reaction, the very positive reaction we are getting from real estate agents -- residential real estate agents in markets where they are interacting with our field salespeople. So I think that gives you some idea.

Our next question comes from Ashish Sabadra with RBC Capital Markets.

Maybe just a question on CoStar Suite. Have you seen any impact of higher interest rates on the bookings or on the sales environment? Have you seen any kind of elongations of sales cycle? Thanks.

There's a lot of different drivers in CoStar. You have dramatic improvement in leasing office space. Higher grade office space right now is normalizing return to office. But you'll probably be seeing some softness in investment sales or smaller prosumer investor sales as the interest rates are going up. There'll definitely be a slowing of volume there. But at the same time, you see more interest from banks in what is the risk -- where is the risk profile in their portfolios in a rising interest rate environment. So lots of different drivers there. We're not yet seeing a clear picture in the CoStar side. We definitely are seeing a clear negative in, say, Australia, U.K., residential real estate, U.S., where home sales are down. Home sales being down in the United States actually has two sides to it. We provide the only real marketing product that is trying to market the house instead of the marketing buyer agents. So in a time when it's hard to sell a house, we think we'll see a little pick up there. But we're not seeing anything specifically in CoStar that is clearly negative on interest rate rises at this point could change.

I would now like to turn the call back over to Andy Florance for any closing remarks.

Appreciate everyone joining us for this call, and it was great to be here for Robin's inaugural. You did a great job, Robin. So this quarter's EBITDA acceleration demonstrates CoStar Group's margin potential and our clear commitment to achieving the adjusted EBITDA targets we've laid out for all of you and for our investors. So we're simultaneously growing revenue at double-digit rate. We're launching significant new products. We're expanding internationally and having some real success doing that. We are integrating acquisitions that we think will create a lot of value, and we're investing aggressively in AI, and I think successfully. And most importantly, we're delivering record profitability. And I'm loving looking at the quarterly EBITDA numbers on charts, looking at it through time, and excited about the next two years ahead. Thank you for joining us.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.