CoStar's Net New Bookings Fall To $37 Million From $84 Million As Sales Headcount Shrinks
CEO Andy Florance says the sales force of about 2,000 is down about 10% and growth will shift to field reps in top cities.
CoStar Group's annualized net new bookings fell to $37 million in the third quarter from $84 million a year earlier, and founder and CEO Andy Florance said on the company's earnings call Tuesday that a shrunken sales force is a big reason. CoStar, which runs commercial real estate data and online property marketplaces including Apartments.com and Homes.com, plans to steer most sales hiring toward experienced field reps.
A sales force down about 10%
Florance said bookings came in below management's expectations, which he attributed to economic headwinds and slower-than-expected sales force growth. CoStar has about 2,000 sales professionals, "Down about 10% from the prior year," he said.
CFO Robin Rossmann, on his first earnings call in the role, said the decline was concentrated in residential. Apartments.com was hurt by a tough economy compounded by insufficient sales capacity, while Homes.com bookings moderated after the sales force reduction earlier this year. Only LoopNet added sales headcount among the largest brands, with its North American team up 20%, and it posted its strongest bookings quarter of 2026.
Richmond's mixed results
Homes.com launched with a large centralized inside sales team in Richmond, many of them without prior sales experience, Florance said. "Many have succeeded. Others have not," he said.
Asked by an analyst from Bank of America whether CoStar cut too deep, Florance said recruiting and management at CoStar and Apartments.com "could have done a better job." He said most sales attrition sits in the Homes.com inside team, mainly among lower performers.
Homes.com inside reps fell from a peak of 655 a year ago to 267 today, he said, and the unit still produced $7 million of annualized net new bookings.
Field reps and a new HR chief
Recruiting is being decentralized from Richmond into about 20 top cities, with recruiters reporting to field sales leadership, Florance said. Sales growth is being written into sales managers' pay plans, and a new chief human resources officer will be named within two weeks.
Apartments.com field reps averaged $6,355 of gross monthly sales each, which management cited as proof that demand exists and capacity is the constraint. Its sales team has grown 21% since the first quarter of 2023 while revenue rose 53%, and renewal rates dipped to 98.4%.
Low point, then recovery
Rossmann said the third quarter should be the low point for bookings, with sequential improvement in the fourth quarter. Sales headcount stabilized in the quarter, and Florance expects sales force growth to re-accelerate in 2027.
The bookings miss, plus weaker Domain transaction volume, lowered full-year revenue guidance by $35 million excluding Zonda, to $3.75 billion to $3.77 billion. Third-quarter revenue rose 14% to $952 million, and adjusted EBITDA hit a record $229 million; full-year adjusted EBITDA guidance rose to $820 million to $840 million. CoStar also agreed to buy Vexcel for about $730 million.
Florance said the company remains committed to its $1.25 billion adjusted EBITDA target for 2028.
Sources
- CoStar Group (CSGP) Q3 Earnings and Revenues Beat Estimates — Yahoo Finance
- CoStar Group to acquire Vexcel Group for $730M (CSGP:NASDAQ) | Seeking Alpha — seekingalpha.com
- CoStar Group to Report Financial Results for Third Quarter on October 27, 2026 – Company Announcement - FT.com — Financial Times
- U.S. Retail Asking Rent Growth Decelerated in the Third Quarter of 2026 – Company Announcement - FT.com — Financial Times
- IN RE: COSTAR GROUP, INC., ET AL., ANTITRUST LITIGATION — law360.com
