CoStar Group CEO Andy Florance dove again into the controversies surrounding rival portal Zillow in the company’s recent Q3 2025 earnings call.
While discussing financials for the company and its subsidiaries—Homes.com, Apartments.com, Matterport, LoopNet, Domain and more—and the increasing traffic and success seen in the portal space, Florance pivoted to discuss an “uncomfortable but important matter,” Zillow.
“Zillow is under siege facing an unprecedented wave of lawsuits,” he claimed. “I’m not sure that the market grasps the sheer magnitude of the risk bearing down on Zillow from all sides.”
Florance continued, saying that these lawsuits “are not isolated instances,” and “collectively target the heart of Zillow’s operations, exposing alleged antitrust violations, widespread copyright theft and blatant consumer deception.”
“With private plaintiffs and government regulators now alert to Zillow’s misconduct, I predict even more aggressive legal and regulatory action in the months ahead,” he added.
Florance has been outspoken against Zillow’s listing standards and stood with Compass in its battle against the portal, something he touched upon again in the call. He called Zillow’s listing standards and enforcement of them “pretty aggressive,” and said it appeared that “Zillow was targeting Compass” in its listing bans.
CoStar is also a direct competitor to Zillow through its huge investment in Homes.com, with Florance having made no secret of his aspirations to challenge the incumbent top consumer portal for market share.
In response to Zillow’s actions, Compass has filed and been fighting a lawsuit against the portal, which Florance characterized as an attempt at “exposing Zillow’s so-called Zillow ban for what it truly is: a ruthless scheme to strangle competition, trap home sellers inside a Zillow’s walled garden.”
Florance also turned to the recent acquisition of Anywhere Real Estate by Compass, something that has been the “talk of the town,” so to speak, amongst the real estate industry. He said he believes that “Zillow’s actions pushed Compass into defensively merging with Anywhere.”
“When the Compass/Anywhere merger is completed, the combined company will be by far the largest real estate brokerage in the U.S. with, as I understand, as many as 300,000-plus agents,” Florance continued. “I’m pretty sure that Zillow just picked a fight it cannot win. Compass will have the most important listing content in real estate, and Zillow will need them a lot more than Compass needs Zillow.”
Florance also touched on CoStar’s own lawsuit against Zillow for copyright infringement, which he said the company filed in order to “put an end to Zillow’s brazen theft and monetization of CoStar’s intellectual property.” He said the “scale of this infringement is staggering,” and that Zillow “undoubtedly has used content stolen from Apartments.com to unfairly build their rental business.”
Speaking of Zillow’s rental business, Florance also noted the FTC’s recent lawsuit filed against Zillow and Redfin over an alleged illegal agreement to suppress competition. He said that “if Zillow is ordered by federal courts, the FTC or Attorney Generals of States to discourage their allegedly illegally gained department revenue and content, I believe it will seriously damage Zillow’s reputation in the apartment industry.”
“These lawsuits will take years to resolve the full extent of Zillow’s contact as alleged in these complaints and the various remedies from these lawsuits is yet to be seen,” he added.
Technology and AI
Taking a turn from the Zillow controversies, Florance also dove into AI and technological advancements CoStar is making across its companies.
“I believe we are about to see our products hyper accelerated by some of the most exciting facilitating AI technologies I could have ever imagined,” he said.
Homes.com had rolled out its AI initiative Smart Search earlier this month, which is the company’s “own artificial intelligence capability we’re engineering in and we’re doing it in partnership with Microsoft,” according to Florance, that allows consumers to “use their own voice to precisely search for a home” through conversational or complex language.
Florance said that in Q3, Smart Search has already produced “significant improvement in user engagement.”
“Users of AI Smart Search used 69% more search filters and viewed 37% more listing pages per session and were five times more likely returned to the site within the following week,” he continued.
Florance noted that CoStar is now investing “50% of our Homes.com software development efforts in the fourth quarter and beyond towards building a range of AI empowered features.” He also explained in the following Q&A that this 50% of efforts comes from already existing resources and does not reflect an increase in total spend.
“All of our products have boundless new opportunities opened up by the enormous potential of generative AI,” Florance added. “AI offers transformative opportunities to unlock tremendous value in real estate.”
The numbers for Q3
As for CoStar’s Q3 2025 earnings, the company reported in the release coinciding with the company’s earnings call that it saw its “58th consecutive quarter of double-digit revenue growth,” and is “one quarter closer to potentially 100 sequential quarters of revenue.”
Revenue for Q3 clocked in at $834 million, up 6% from the $781 million seen last quarter. CoStar also reported a net loss of $31 million, but the 20% increase in revenue from Q3 2024 contrasts the loss.
In addition, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) came in at $115 million, up 35% from last quarter’s $85 million, and up a whopping 51% from Q3 2024.
Wall Street was not impressed, however, as the company’s stock fell sharply Wednesday, down over 12% at press time.
The company’s residential portals saw 22.7% revenue growth from last quarter and 31.3% growth year-over-year. Net new bookings in Q3 came in at $84 million, up 92% year-over-year.
CoStar noted that the Homes.com Network remains the “second largest” portal in the U.S. industry, with “115 million average monthly unique visitors.”
Looking ahead, the company stated it expects Q4 revenue “in the range of $885 million to $895 million, representing revenue growth of approximately 25% year-over-year at the midpoint of the range.” It also expects adjusted EBITDA in the range of $150 million to $160 million.
