The data giant CoStar Group, operator of Homes.com and Apartments.com among other real estate businesses, set a confident atmosphere during its Q1 2026 earnings call; Founder and CEO Andy Florance touted “60 consecutive quarters of consistent, double-digit revenue growth” during the earnings call and the corresponding press release.
Citing its ongoing success, CoStar shared plans to raise subscription prices for new members on May 1. Asked about this plan during the investor Q&A section of the earnings call and why it’s the right time to raise prices, Florance argued that Homes.com can continue to grow its user base and raise prices at the same time.
CoStar’s own cited research found an 11-times return on investment for members; member commission gains averaged $36,400, compared to the annual subscription price of $3,400.
“We can grow the user base and capture more of the value. Particularly for the folks who are earning under $250,000 a year—there are many of those agents. I am looking at the close rates for the folks who are well trained and who are in the upper half of Homes.com salespeople, and the close rates are extremely high—north of 50%. Once you get to that high close rate, you start to feel that you need to bring the price up,” said Florance, though he indicated price raises may not be universal for all profiles of agents.
“There are a couple of places, looking at the different cohorts of agents and profiles of agents, where we will probably bring the pricing down a touch,” Florance added. “In the biggest cohorts of agents, we are leaving too much on the table. We are providing a lot of value, and I think we can push (the) price and keep member count growing.”
CoStar Chief Financial Officer Chris Lown said that the company expects Homes.com growth to be “meaningfully faster than our other brands.”
During Q1 2026, CoStar and Florance faced a contest for control with activist investor Daniel Loeb, with Loeb’s hedge fund Third Point and the investment company D.E. Shaw seeking to replace a majority of CoStar’s board.
The activist investors specifically called for CoStar to abandon Homes.com, which Florance called a “complete misunderstanding of our business, industry, and the strong progress we are making.” In April, Third Point confirmed it was not continuing this proxy battle, with Loeb confirming in a letter to shareholders the hedge fund had sold its stake in CoStar altogether.
On the earnings call, Florance characterized that “distraction” as “behind us.”
Financial and partnerships
On top of revenue growth, CoStar cited its expanded partnership with eXp Realty to let eXp agents display pre-market listings on Homes.com, as well as the success of implementing new AI features into Homes.com—which Florance claimed resulted in a 119% boost to organic search traffic.
“We have also continued our strong momentum in adding Homes.com members and today have (35,175), up more than 200% from the same period a year ago,” said Florance.
In Q1 2025, Homes had about 10,000 members.
He also pointed to CoStar signing data feed agreements with 663 homebuilders across the U.S. who were “looking to reach the Homes.com audience.” Florance estimated that these data feeds “now reach roughly 75% of all new-home activity in the U.S.”
“These data feeds provide a better consumer experience to home searchers on Homes.com and are a foundational building block to power a valuable new-homes information product within CoStar,” said Florance.
For Q1 2026, CoStar posted a 23% annual revenue increase of $897 million total. Commercial revenue made up $472 million (a 15% increase), while residential revenue made up $425 million (a 32% increase). The press release explicitly noted that management expects to reach profitability from the residential sector in Q2 2026. Revenue from Homes.com was $26 million, up 58%, driven by the 205% increase in agent subscriber count to $35,175.
CoStar’s earnings before interest, taxes, depreciation and amortization (EBITDA) was $132 million in Q1, a year-over-year doubling of EBITDA that exceeded the midpoint of expectations by 26%. In his opening statement, Florance stated that “we are on track for the highest full-year adjusted EBITDA in CoStar Group, Inc.’s history.”
In January, CoStar had announced a moderation of its investment in Homes.com, scaling it at $300 million in 2026 to $100 million by 2030. During the earnings call Q&A, Lown assured investors that “we are fully committed to our stated Homes.com net investment number. We are well on track to hit that number this year, and we gave you guidance through 2030, and we will hit those numbers.”
Despite this strong earnings report, stock prices on the CoStar Group fell by 4% on the morning of April 29, the day after the earnings call the prior evening on April 28.
