PRESS RELEASE DETAIL


Oct 25, 2017

CoStar Group Announces Third Quarter Revenue Growth of 16%, Net Income Increases 48% and Company Raises Full Year Revenue and Earnings Guidance

CoStar Group, Inc. (NASDAQ:CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, announced today that revenue for the quarter ended September 30, 2017 was $248 million, an increase of 16% over revenue of $213 million in the third quarter of 2016. Net income for the third quarter of 2017 increased to $34 million or $1.04 per diluted share compared to $23 million in the third quarter of 2016, an increase of 48%. EBITDA in the third quarter of 2017 was $73 million, an increase of 26% over the third quarter of 2016.

"In the third quarter, we built upon our solid momentum in 2017 driving excellent growth with profitable revenue and strong sales," said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. "Company-wide net new bookings continued to be exceptionally strong at $34 million in the third quarter of 2017, up 31% year-over-year. Our marketplace businesses are performing extremely well as we achieved year-over-year revenue growth in the third quarter of 25% in Multifamily and 21% in Commercial property and land. CoStar Suite revenue accelerated to 14% year-over-year growth. Margins are also expanding, as we achieved 34% adjusted EBITDA margins in the third quarter, up 1,100 basis points from 23% in the second quarter of this year."

Florance continued, "We have successfully completed the integration of our CoStar and LoopNet databases. At that time, we converted LoopNet.com to a pure pay-to-list marketing site eliminating free listings and creating more value for our paid listers. Beginning in early October, our sales force hit the ground running with our focused cross-selling campaign to convert LoopNet information users to CoStar Suite and sell more paid advertising on LoopNet. In the first twelve days of the campaign, we closed over 500 deals. The response from our sales teams, clients, and prospects has been overwhelmingly positive. We believe this will ultimately result in significant revenue opportunities for the next several years."


Year 2016-2017 Quarterly Results - Unaudited
(in millions, except per share data)
2016 2017
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Revenues $ 200 $ 207 $ 213 $ 218 $ 227 $ 237 $ 248
Net income 17 16 23 30 22 22 34
Net income per share - diluted 0.52 0.48 0.72 0.91 0.68 0.68 1.04
Weighted average outstanding shares - diluted 32.4 32.4 32.4 32.5 32.6 32.7 32.8
EBITDA 48 46 58 64 55 44 73
Adjusted EBITDA 58 56 67 75 64 54 84
Non-GAAP net income 31 29 36 42 34 28 46
Non-GAAP net income per share - diluted 0.95 0.91 1.11 1.29 1.05 0.86 1.41

Non-GAAP net income (defined below) for the quarter ended September 30, 2017 was $46 million or $1.41 per diluted share, an increase of $10 million versus the third quarter of 2016. Adjusted EBITDA (which excludes stock-based compensation and other items as defined below) was $84 million for the third quarter of 2017, an increase of 25% over the third quarter of 2016.

As of September 30, 2017, the Company had approximately $633 million in cash, cash equivalents and long term investments, while short and long-term debt outstanding, net of debt issuance costs, totaled approximately $305 million. Subsequent to the end of the third quarter, the Company completed a public offering of common stock on October 3, 2017. The proceeds from the stock offering net of underwriting discounts and commissions totaled $833 million. In addition, the Company restructured its outstanding credit facility on October 19, 2017, by increasing the size of its revolving credit facility to $750 million, putting in place a new five-year term, and prepaying the outstanding term loan in full. The Company intends to use the proceeds from the public stock offering and the revolving credit facility to support future growth, to fund all or a portion of any strategic acquisitions, for working capital and other general corporate purposes.

2017 Outlook
"We exceeded our third quarter top and bottom line estimates, and we are raising our full year 2017 earnings and revenue guidance," stated Scott Wheeler, Chief Financial Officer of CoStar Group.

The Company expects revenue to be in a range of approximately $962 million to $965 million for the full year of 2017, increasing the midpoint of the revenue outlook by approximately $7 million. For the fourth quarter, the Company expects revenue in a range of $251 million to $254 million.

Adjusted EBITDA for the full year of 2017 is expected to be in a range of $287 million to $291 million, an increase of $17 million at the midpoint from the prior outlook. For the fourth quarter, the Company expects adjusted EBITDA in a range of $85 million to $89 million.

For the full year of 2017, the Company expects non-GAAP net income per diluted share (defined below) in a range of approximately $4.65 to $4.73. The non-GAAP net income per diluted share outlook includes a $0.31 increase at the midpoint versus the previous outlook from strong operating performance, partially offset by approximately $0.09 net dilution related to the Companys recent common stock offering and debt reduction, for a net increase of $0.22 per diluted share. For the fourth quarter, the Company expects non-GAAP net income per diluted share in a range of $1.31 to $1.38, which includes net dilution of $0.11 from the common stock offering and debt restructuring.

The Companys outlook excludes any impact from the pending acquisition of ForRent, which was announced September 12, 2017. Based on preliminary estimates and assuming a close date at the end of November 2017, the Company expects that ForRent will contribute $6 million - $8 million in revenue in the fourth quarter of 2017, and be slightly dilutive on a non-GAAP net income per share basis due to the impact of integration and purchase accounting adjustments.

The preceding forward-looking statements reflect CoStar Groups expectations as of October 25, 2017, including forward-looking non-GAAP financial measures on a consolidated basis. We are not able to forecast with certainty whether or when certain events, such as acquisition-related costs, closing of the ForRent acquisition, the exact amounts or timing of investments, transition, restructuring, settlements or impairments will occur in any given quarter. Given the risk factors, uncertainties and assumptions discussed above, actual results may differ materially. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.

Reconciliation of EBITDA, adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share and all of the disclosed non-GAAP financial measures to their GAAP basis results are shown in detail below, along with definitions for those terms. A reconciliation of forward-looking non-GAAP guidance to the most directly comparable GAAP measure, net income, can be found within the tables included in this release.

Non-GAAP Financial Measures
For information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Companys financial condition and results of operations, please refer to the Companys latest periodic report.

EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before (i) interest income (expense), (ii) provision for income taxes, and (iii) depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before (i) stock-based compensation expense, (ii) acquisition and integration related costs, (iii) restructuring charges and related costs, and (iv) settlements and impairments incurred outside the Companys normal business operations.

Non-GAAP net income is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before (i) amortization of acquired intangible assets, (ii) stock-based compensation expense, (iii) acquisition and integration related costs, (iv) purchase accounting adjustments, (v) restructuring charges and related costs, (vi) settlements and impairments and (vii) debt restructuring costs. From this figure, we then subtract an assumed provision for income taxes to arrive at non-GAAP net income. The company assumes a 38% tax rate in order to approximate our long-term effective corporate tax rate.

Non-GAAP net income per diluted share (also referred to as non-GAAP EPS) is a non-GAAP financial measure that represents non-GAAP net income divided by the number of diluted shares outstanding for the period. For periods with GAAP net losses and non-GAAP net income, the weighted-average outstanding shares used to calculate non-GAAP net income per share includes potentially dilutive securities that were excluded from the calculation of GAAP net income per share as the effect was anti-dilutive.

Earnings Conference Call
Management will conduct a conference call at 11:00 AM EDT on Thursday, October 26, 2017 to discuss earnings results for the third quarter of 2017 and the Companys outlook. The audio portion of the conference call will be broadcast live over the Internet at www.costargroup.com/investors/events. To join the conference call by telephone, please dial (800) 230-1096 (from the United States and Canada) or (612) 288-0340 (from all other countries) and refer to conference code 431618. An audio recording of the conference call will be available for replay approximately one hour after the call's completion and will remain available for a period of time following the call. To access the recorded conference call, please dial (800) 475-6701 (from the U.S. and Canada) or (320) 365-3844 (from all other countries) using access code 431618. The webcast replay will also be available in the Investors section of CoStar Group's website for a period of time following the call.


CoStar Group, Inc.
Condensed Consolidated Statements of Operations-Unaudited
(in thousands, except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2017 2016 2017 2016
Revenues $ 247,533 $ 212,711 $ 711,239 $ 619,319
Cost of revenues 55,483 42,222 162,102 127,801
Gross margin 192,050 170,489 549,137 491,518
Operating expenses:
Selling and marketing 72,705 75,414 240,833 231,086
Software development 21,536 19,357 67,054 56,539
General and administrative 35,998 30,572 104,550 88,275
Customer base amortization 4,298 5,550 13,642 17,602
134,537 130,893 426,079 393,502
Income from operations 57,513 39,596 123,058 98,016
Interest and other income 555 344 1,589 587
Interest and other expense (2,901 ) (2,498 ) (8,280 ) (7,462 )
Income before income taxes 55,167 37,442 116,367 91,141
Income tax expense 20,990 14,241 37,876 35,643
Net income $ 34,177 $ 23,201 $ 78,491 $ 55,498
Net income per share - basic $ 1.05 $ 0.72 $ 2.42 $ 1.73
Net income per share - diluted $ 1.04 $ 0.72 $ 2.40 $ 1.71
Weighted average outstanding shares - basic 32,444 32,186 32,375 32,152
Weighted average outstanding shares - diluted 32,814 32,440 32,705 32,423


CoStar Group, Inc.
Reconciliation of Non-GAAP Financial Measures-Unaudited
(in thousands, except per share data)
Reconciliation of Net Income to Non-GAAP Net Income
Three Months Ended
September 30,
Nine Months Ended
September 30,
2017 2016 2017 2016
Net income $ 34,177 $ 23,201 $ 78,491 $ 55,498
Income tax expense 20,990 14,241 37,876 35,643
Income before income taxes 55,167 37,442 116,367 91,141
Amortization of acquired intangible assets 8,498 11,286 28,731 34,721
Stock-based compensation expense 9,743 9,311 29,203 26,981
Acquisition and integration related costs 1,224 1,996 2,258
Restructuring and related costs 66 66
Settlements and impairments (760 )
Non-GAAP income before income taxes 74,632 58,105 175,537 155,167
Assumed rate for income tax expense * 38 % 38 % 38 % 38 %
Assumed provision for income tax expense (28,360 ) (22,080 ) (66,704 ) (58,963 )
Non-GAAP net income $ 46,272 $ 36,025 $ 108,833 $ 96,204
Net income per share - diluted $ 1.04 $ 0.72 $ 2.40 $ 1.71
Non-GAAP net income per share - diluted $ 1.41 $ 1.11 $ 3.33 $ 2.97
Weighted average outstanding shares - basic 32,444 32,186 32,375 32,152
Weighted average outstanding shares - diluted 32,814 32,440 32,705 32,423
* A 38% tax rate is assumed, which approximates our long-term effective corporate tax rate.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Three Months Ended
September 30,
Nine Months Ended
September 30,
2017 2016 2017 2016
Net income $ 34,177 $ 23,201 $ 78,491 $ 55,498
Amortization of acquired intangible assets in cost of revenues 4,200 5,736 15,089 17,119
Amortization of acquired intangible assets in operating expenses 4,298 5,550 13,642 17,602
Depreciation and other amortization 6,621 6,794 19,546 18,320
Interest and other income (555 ) (344 ) (1,589 ) (587 )
Interest and other expense 2,901 2,498 8,280 7,462
Income tax expense 20,990 14,241 37,876 35,643
EBITDA $ 72,632 $ 57,676 $ 171,335 $ 151,057
Stock-based compensation expense 9,743 9,311 29,203 26,981
Acquisition and integration related costs 1,224 1,996 2,258
Settlements and impairments (760 )
Restructuring and related costs 66 66
Adjusted EBITDA $ 83,599 $ 67,053 $ 201,774 $ 180,362


CoStar Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30,
2017
December 31,
2016
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 622,995 $ 567,223
Accounts receivable, net 60,871 48,537
Income tax receivable 129
Prepaid expenses and other current assets 16,215 11,602
Total current assets 700,081 627,491
Long-term investments 9,952 9,952
Deferred income taxes, net 6,477 7,273
Property and equipment, net 84,326 87,568
Goodwill 1,283,190 1,254,866
Intangible assets, net 191,178 195,965
Deposits and other assets 5,392 1,948
Total assets $ 2,280,596 $ 2,185,063
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and other current liabilities $ 94,109 $ 83,916
Current portion of long-term debt 36,910 31,866
Deferred revenue 45,568 39,164
Total current liabilities 176,587 154,946
Long-term debt, less current portion 268,586 306,473
Deferred gain on sale of building 16,823 18,715
Deferred rent 30,090 31,589
Deferred income taxes, net 22,101 18,386
Income taxes payable 3,982 741
Stockholders' equity 1,762,427 1,654,213
Total liabilities and stockholders' equity $ 2,280,596 $ 2,185,063


CoStar Group, Inc.
Condensed Consolidated Statements of Cash Flows - Unaudited
(in thousands, unaudited)
Nine Months Ended
September 30,
2017 2016
Operating activities:
Net income $ 78,491 $ 55,498
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 48,277 53,041
Amortization of debt issuance costs 2,157 2,407
Stock-based compensation expense 29,203 26,981
Deferred income tax expense, net 6,087 5,554
Provision for losses on accounts receivable 3,992 6,462
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable (15,809 ) (13,808 )
Prepaid expenses and other current assets (3,561 ) (1,398 )
Deposits and other assets (3,387 ) 473
Accounts payable and other liabilities 11,888 12,864
Deferred revenue 5,969 386
Net cash provided by operating activities 163,307 148,460
Investing activities:
Proceeds from sale and settlement of investments 4,700
Purchases of property and equipment and other assets (19,754 ) (11,692 )
Acquisitions, net of cash acquired (47,767 ) (10,443 )
Net cash used in investing activities (67,521 ) (17,435 )
Financing activities:
Payments of long-term debt (35,000 ) (20,000 )
Payments of issuance costs (643 )
Repurchase of restricted stock to satisfy tax withholding obligations (14,309 ) (14,573 )
Proceeds from exercise of stock options and employee stock purchase plan 9,058 4,791
Net cash used in financing activities (40,894 ) (29,782 )
Effect of foreign currency exchange rates on cash and cash equivalents 880 (962 )
Net increase in cash and cash equivalents 55,772 100,281
Cash and cash equivalents at the beginning of period 567,223 421,818
Cash and cash equivalents at the end of period $ 622,995 $ 522,099


CoStar Group, Inc.
Results of Segments-Unaudited
(in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2017 2016 2017 2016
Revenues
North America $ 239,537 $ 205,637 $ 688,704 $ 598,757
International
External customers 7,996 7,074 22,535 20,562
Intersegment revenues * 5 3 27 24
Total International revenues 8,001 7,077 22,562 20,586
Intersegment eliminations (5 ) (3 ) (27 ) (24 )
Total revenues $ 247,533 $ 212,711 $ 711,239 $ 619,319
EBITDA
North America $ 72,267 $ 56,305 $ 170,064 $ 148,296
International 365 1,371 1,271 2,761
Total EBITDA $ 72,632 $ 57,676 $ 171,335 $ 151,057
*Intersegment revenues recorded were attributable to services performed for the Company's wholly owned subsidiary, CoStar Portfolio Strategy by Grecam S.A.S. (Grecam), a wholly owned subsidiary of CoStar Limited, the Companys wholly owned U.K. holding company. Intersegment revenues are recorded at an amount the Company believes approximates fair value. North America EBITDA includes a corresponding cost for the services performed by Grecam for CoStar Portfolio Strategy.


CoStar Group, Inc.
Revenues by Services-Unaudited
(in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2017 2016 2017 2016
Information and analytics
CoStar Suite $ 117,314 $ 103,261 $ 341,087 $ 301,969
Information services 18,716 19,486 55,364 58,336
Online marketplaces
Multifamily 72,257 57,654 204,324 164,752
Commercial property and land 39,246 32,310 110,464 94,262
Total revenues $ 247,533 $ 212,711 $ 711,239 $ 619,319


CoStar Group, Inc.
Reconciliation of Non-GAAP Financial Measures with 2016-2017 Quarterly Results - Unaudited
(in millions, except per share data)
Reconciliation of Net Income to Non-GAAP Net Income
2016 2017
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Net income $ 16.7 $ 15.6 $ 23.2 $ 29.6 $ 22.1 $ 22.2 $ 34.2
Income tax expense 11.2 10.2 14.2 16.0 13.3 3.6 21.0
Income before income taxes 27.9 25.8 37.4 45.5 35.4 25.8 55.2
Amortization of acquired intangible assets 11.9 11.5 11.3 10.8 10.9 9.3 8.5
Stock-based compensation expense 8.3 9.3 9.3 9.4 9.4 10.1 9.7
Acquisition and integration related costs 1.5 0.8 0.4 0.4 1.2
Restructuring and related costs 0.1 1.8
Settlements and impairments (0.8 )
Non-GAAP income before income taxes 49.6 47.5 58.1 67.5 55.3 45.6 74.6
Assumed rate for income tax expense * 38 % 38 % 38 % 38 % 38 % 38 % 38 %
Assumed provision for income tax expense (18.9 ) (18.0 ) (22.1 ) (25.6 ) (21.0 ) (17.3 ) (28.4 )
Non-GAAP net income $ 30.7 $ 29.4 $ 36.0 $ 41.8 $ 34.3 $ 28.3 $ 46.3
Non-GAAP net income per share - diluted $ 0.95 $ 0.91 $ 1.11 $ 1.29 $ 1.05 $ 0.86 $ 1.41
Weighted average outstanding shares - basic 32.1 32.2 32.2 32.2 32.3 32.4 32.4
Weighted average outstanding shares - diluted 32.4 32.4 32.4 32.5 32.6 32.7 32.8
* A 38% tax rate is assumed, which approximates our long-term effective corporate tax rate.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
2016 2017
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Net income $ 16.7 $ 15.6 $ 23.2 $ 29.6 $ 22.1 $ 22.2 $ 34.2
Amortization of acquired intangible assets 11.9 11.5 11.3 10.8 10.9 9.3 8.5
Depreciation and other amortization 5.6 5.9 6.8 6.3 6.4 6.5 6.6
Interest and other income (0.1 ) (0.2 ) (0.3 ) (1.2 ) (0.4 ) (0.6 ) (0.6 )
Interest and other expense 2.5 2.5 2.5 2.6 2.7 2.7 2.9
Income tax expense 11.2 10.2 14.2 15.9 13.3 3.6 21.0
EBITDA $ 47.8 $ 45.6 $ 57.7 $ 64.0 $ 55.0 $ 43.7 $ 72.6
Stock-based compensation expense 8.3 9.3 9.3 9.4 9.4 10.1 9.7
Acquisition and integration related costs 1.5 0.8 0.4 0.4 1.2
Restructuring and related costs 0.1 1.8
Settlements and impairments (0.8 )
Adjusted EBITDA $ 57.6 $ 55.7 $ 67.1 $ 75.2 $ 63.9 $ 54.3 $ 83.6


CoStar Group, Inc.
Reconciliation of Forward-Looking Guidance-Unaudited
(in thousands, except per share data)
Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income
Guidance Range Guidance Range
For the Three Months For the Twelve Months
Ended December 31, 2017 Ended December 31, 2017
Low High Low High
Net income $ 33,500 $ 38,200 $ 112,000 $ 116,700
Income tax expense 17,100 19,500 55,000 57,400
Income before income taxes 50,600 57,700 167,000 174,100
Amortization of acquired intangible assets 8,300 8,300 37,000 37,000
Stock-based compensation expense 11,800 9,800 41,000 39,000
Acquisition and integration related costs 3,000 2,000 5,000 4,000
Restructuring and related costs
Settlements and impairments (800 ) (800 )
Debt restructuring costs 3,000 3,000 3,000 3,000
Non-GAAP income before income taxes 76,700 80,800 252,200 256,300
Assumed rate for income tax expense * 38 % 38 % 38 % 38 %
Assumed provision for income tax expense (29,100 ) (30,700 ) (95,800 ) (97,400 )
Non-GAAP net income $ 47,600 $ 50,100 $ 156,400 $ 158,900
Net income per share - diluted $ 0.93 $ 1.06 $ 3.33 $ 3.47
Non-GAAP net income per share - diluted $ 1.31 $ 1.38 $ 4.65 $ 4.73
Weighted average outstanding shares - diluted 36,200 36,200 33,600 33,600
* A 38% tax rate is assumed, which approximates our long-term effective corporate tax rate.
Reconciliation of Forward-Looking Guidance, Net Income to Adjusted EBITDA
Guidance Range Guidance Range
For the Three Months For the Twelve Months
Ended December 31, 2017 Ended December 31, 2017
Low High Low High
Net income $ 33,500 $ 38,200 $ 112,000 $ 116,700
Amortization of acquired intangible assets 8,300 8,300 37,000 37,000
Depreciation and other amortization 7,400 7,400 27,000 27,000
Interest and other expense, net 4,200 4,200 11,000 11,000
Income tax expense 17,100 19,500 55,000 57,400
Stock-based compensation expense 11,800 9,800 41,000 39,000
Acquisition and integration related costs 3,000 2,000 5,000 4,000
Restructuring and related costs
Settlements and impairments (800 ) (800 )
Adjusted EBITDA $ 85,300 $ 89,400 $ 287,200 $ 291,300


All Contacts

Scott Wheeler
Chief Financial Officer
(202) 336-6920
swheeler@costar.com

Richard Simonelli
Vice President, Investor Relations
(202) 346-6394
rsimonelli@costar.com

About CoStar Group, Inc.

CoStar Group, Inc. (NASDAQ:CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. LoopNet is the most heavily trafficked commercial real estate marketplace online with over 5 million monthly unique visitors per month. Apartments.com, ApartmentFinder.com, ApartmentHomeLiving.com, Westside Rentals and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Through an exclusive partnership with Move, a subsidiary of News Corporation, Apartments.com is the exclusive provider of apartment community listings across Moves family of websites, which include realtor.com, doorsteps.com and move.com. CoStar Groups websites attracted an average of approximately 37 million unique monthly visitors in aggregate in the third quarter of 2017. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Canada with a staff of over 3,600 worldwide, including the industrys largest professional research organization. For more information, visit www.costargroup.com.

CONTACT: Scott Wheeler, Chief Financial Officer, (202) 336-6920, swheeler@costar.com; Richard Simonelli, Vice President, Investor Relations, (202) 346-6394, rsimonelli@costar.com


 

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about CoStar Group's financial expectations, the Company's plans, objectives, expectations and intentions and other statements including words such as hope, "anticipate," "may," "believe," "expect," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or other comparable terminology. Such statements are based upon the current beliefs and expectations of management of CoStar Group and are subject to significant risks and uncertainties. Actual results may differ materially from the results anticipated in the forward-looking statements. The following factors, among others, could cause or contribute to such differences: the risk that the trends stated or implied by this release cannot or will not be sustained at the current pace, including trends related to revenue, bookings, sales, margins, and earnings; the risk that the Company is unable to sustain current revenue and earnings growth rates or increase them; the risk that returns on the Companys CoStar and LoopNet integration efforts, related investments and sales efforts will not continue in line with early results or that those efforts and investments will not result in significant sales and revenue opportunities for CoStar and LoopNet for the next several years as expected; the risk that revenues for the fourth quarter and full year 2017 will not be as stated in this press release; the risk that net income for the fourth quarter and full year 2017 will not be as stated in this press release; the risk that adjusted EBITDA for the fourth quarter and full year 2017 will not be as stated in this press release; the risk that non-GAAP net income and non-GAAP net income per diluted share for the fourth quarter and full year 2017 will not be as stated in this press release; the risk that the acquisition of ForRent does not close when expected or at all; the risk that the businesses of ForRent, Apartments.com, and CoStar may not be combined successfully or in a timely and cost-efficient manner; the risk that the combination does not produce the expected results or benefits; the risk that business disruption relating to the ForRent acquisition may be greater than expected; the risk that synergies and expected operating efficiencies from the acquisition of ForRent may not be as expected, may not be fully realized, may take longer to realize than expected or may not drive revenue and earnings growth; the risk that the combination and integration of ForRent will disrupt CoStar's operations or result in the loss of consumers, property owners or key employees; the risk that the companys estimates and assumptions regarding ForRent change from current expectations, including as a result of the timing of the acquisition; the risk that the amount of fourth quarter 2017 revenue from the ForRent acquisition differs from expectations and that dilution on a non-GAAP net income per share basis due to the impact of integration and purchase accounting adjustments as a result of the ForRent acquisition differs from expectations; and the risk that costs actually incurred in connection with the Xceligent litigation differ from estimates included within the Companys forecast, which differences may be material. Additional factors that could cause results to differ materially from those anticipated in the forward-looking statements can be found in CoStars Annual Report on Form 10-K for the year ended December 31, 2016, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, each of which is filed with the SEC, including in the Risk Factors section of those filings, and the Companys other filings with the SEC available at the SECs website (www.sec.gov). CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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