CoStar Posts $74 Million Quarterly Profit, Lifts 2026 Outlook And Agrees To Pay $730 Million For Vexcel
Adjusted EBITDA doubled to $229 million, topping the company's own guidance, as the real estate data firm moved to buy an aerial-imagery provider.
CoStar Group, which runs online real estate marketplaces and data services, reported third-quarter net income of $74 million, up $105 million from a year-earlier loss, and raised its 2026 forecasts. The company also agreed to buy aerial-imagery provider Vexcel for $730 million in cash, it said in an 8-K filed Tuesday.
A quarter that beat its own guidance
Revenue rose 14% to $952 million from $834 million a year earlier. Earnings were $0.18 per diluted share, against a loss of $0.07.
Adjusted EBITDA, a profit measure that strips out items such as stock pay and deal costs, doubled to $229 million from $114 million. CEO Andy Florance said that was "considerably above the high end" of the $190 million to $210 million range the company had guided.
The residential segment, which includes Apartments.com and Homes.com, swung to adjusted EBITDA of $49 million from a $69 million loss. Commercial real estate adjusted EBITDA was $180 million, against $183 million a year earlier.
Higher targets and a bigger cost push
CoStar now expects full-year 2026 adjusted EBITDA of $820 million to $840 million, up $30 million at the midpoint from its July guidance. Revenue guidance rose to $3.75 billion to $3.77 billion. For the fourth quarter it expects adjusted EBITDA of $275 million to $295 million and revenue of $976 million to $996 million.
Florance said an ongoing expense review has found potential further savings of at least $200 million, which the company expects to realize over the next 12 to 18 months. He said that keeps CoStar on track for its 2028 adjusted EBITDA target of $1.25 billion.
In the first nine months of 2026, CoStar spent $668 million repurchasing its stock, versus $115 million a year earlier. Cash and equivalents stood at $500 million at September 30, down from $1.63 billion at the end of 2025.
Vexcel: aerial cameras and AI data
Vexcel runs a large aerial imagery program and designs and builds its own UltraCam cameras. It covers more than 45 countries and 99.6% of the U.S. population, and generated more than $140 million of revenue over the last twelve months at an adjusted EBITDA margin of about 20%.
Florance said CoStar believes AI can pull hundreds of data fields per property from Vexcel's imagery, and that its 2,000 salespeople can speed Vexcel's growth. CoStar expects to pay from cash on hand and its revolving credit facility, and says the deal should add to adjusted earnings per share in the first full year of ownership.
The deal needs antitrust clearance, including expiration of the Hart-Scott-Rodino waiting period, and is targeted to close in the first quarter of 2027. Vexcel's leadership, under CEO Erik Jorgensen, will stay in place.
CoStar holds its earnings call at 5:00 p.m. ET Tuesday to discuss the results and outlook.
