PRESS RELEASE DETAIL


Oct 26, 2016

CoStar Group Grows Net Income $28 Million Year-over-Year

Margins Expand Dramatically and EBITDA Increases 161% Year-over-Year

WASHINGTON, Oct. 26, 2016 -- 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, 2016 was $213 million, an increase of 12.5% over revenue of $189 million in the third quarter of 2015. Net income for the third quarter of 2016 increased to $23 million or $0.72 per diluted share compared to a net loss of $(5) million in the third quarter of 2015. EBITDA in the third quarter of 2016 was $58 million compared to $22 million in the third quarter of 2015, an increase of 161%. EBITDA margin was 27% in the third quarter of 2016 compared to 12% in the third quarter of 2015.

"We achieved another strong quarter of profitable revenue growth in the third quarter of 2016," said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. "Our focus on investing in growth and cost management has generated net income and EBITDA through the first nine months of 2016 that is as high or higher than in any other 12 month period in our history. Net new sales of our flagship service CoStar Suite continued to accelerate. Year-to-date in 2016, we have outpaced CoStar Suite net new sales over the same time period in 2015 by 33%."

"Our expansion into multifamily has been a tremendous success. In just two and a half years, we have transformed Apartments.com. At the time of the acquisition in the first quarter of 2014, Apartments.com averaged 7.8 million visits a month according to comScore and generated annual revenue of $86 million, placing it third among internet listing sites. In the third quarter of 2016, Apartments.com is now number one in visits averaging 21 million visits a month according to comScore and we believe we are number one in annualized revenue we generate in the multifamily space. From November 2015 to September 2016, Apartments.com visits are up 39% while our next closest competitor is down 10% according to comScore."

Year 2015-2016 Quarterly Results - Unaudited


(in millions, except per share data)



2015


2016


Q1

Q2

Q3

Q4


Q1

Q2

Q3










Revenues

$

159


$

171


$

189


$

193



$

200


$

207


$

213


Net income (loss)

(6)


(15)


(5)


23



17


16


23


Net income (loss) per share - diluted

(0.19)


(0.47)


(0.17)


0.71



0.52


0.48


0.72


Weighted average outstanding shares - diluted

31.8


31.9


32.0


32.3



32.4


32.4


32.4











EBITDA

14


(1)


22


55



48


46


58


Adjusted EBITDA

24


11


36


65



58


56


67


Non-GAAP Net Income

11


2


17


36



31


29


36


Non-GAAP Net Income per share - diluted

0.34


0.08


0.53


1.10



0.95


0.91


1.11


 

CoStar Suite revenue for the third quarter of 2016 of $103 million increased 13% versus the third quarter of 2015 and 14% excluding the impact of foreign currency movements. Compared to the third quarter of 2015, multifamily revenue increased 17% in the third quarter of 2016, and 22% for the same period on a pro forma basis (defined below), adjusting for non-core services that were shut down after the Apartment Finder acquisition.

Non-GAAP net income (defined below) for the quarter ended September 30, 2016 was $36 million or $1.11 per diluted share, an increase of $19 million compared to non-GAAP net income of $17 million in the third quarter of 2015. Adjusted EBITDA (which excludes stock-based compensation and other items as defined below) was $67 million for the third quarter of 2016 versus $35 million in the third quarter of 2015, which is an increase of 89% year-over-year. Adjusted EBITDA margin was 32% for the third quarter of 2016 versus 19% for the third quarter of 2015.

Company-wide net bookings were $26 million in the third quarter of 2016. This is the sixth quarter in a row of over $25 million in quarterly net bookings. Strong net bookings in the third quarter were achieved in spite of headwinds that resulted from our plan to shut down the LoopNet information products and our reduced sales efforts for LoopNet Premium Searcher ahead of the planned integration with CoStar Suite.

As of September 30, 2016, the Company had approximately $533 million in cash, cash equivalents and investments, which is an increase of approximately $58 million in the third quarter of 2016. Short and long-term debt outstanding, net of debt issuance costs, totaled approximately $338 million as of September 30, 2016.

2016 Outlook
"The Company continued to deliver strong revenue growth and better than expected earnings in the third quarter of 2016," stated Scott T. Wheeler, Chief Financial Officer of CoStar Group. "With our continued focus on profitable growth, we are again increasing our full-year earnings forecast."

The Company expects revenue of approximately $835 million to $838 million for the full year of 2016. For the fourth quarter of 2016, the Company expects revenue of approximately $216 million to $219 million.

For the full year of 2016, the Company expects non-GAAP net income per diluted share (defined below) in a range of approximately $4.20 to $4.25, raising the midpoint by $0.13 from the prior outlook, and by $0.55 from the Company's initial 2016 guidance. For the fourth quarter of 2016, the Company expects non-GAAP net income per diluted share of approximately $1.23 to $1.28.

The preceding forward-looking statements reflect CoStar Group's expectations as of October 26, 2016, 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, 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 Company's financial condition and results of operations, please refer to the Company's 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 Company's normal business operations.

Non-GAAP net income is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group before (i) purchase amortization and other related costs, (ii) stock-based compensation expense, (iii) acquisition and integration related costs, (iv) purchase accounting adjustments, (v) restructuring charges and related costs, and (vi) settlements and impairments. 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.

Pro-forma Revenue Definition
Pro-forma revenue growth rates presented in this release include the addition of Apartment Finder core online marketplace revenue recognized prior to the June 1, 2015 acquisition date and exclude any pre- or post- acquisition revenue for discontinued Apartment Finder services such as Finder Social.

Earnings Conference Call
Management will conduct a conference call at 11:00 AM EDT on Thursday, October 27, 2016 to discuss earnings results for the third quarter of 2016 and the Company's 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) 398-9367 (from the United States and Canada) or (612) 332-0632 (from all other countries) and refer to conference code 403281. 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 403281. 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,



2016


2015


2016


2015



















Revenues


$

212,711



$

189,078



$

619,319



$

518,755


Cost of revenues


42,222



53,728



127,801



143,758


Gross margin


170,489



135,350



491,518



374,997











Operating expenses:









  Selling and marketing


75,414



80,506



231,086



242,418


  Software development


19,357



17,048



56,539



49,040


  General and administrative


30,572



31,074



88,275



86,346


  Purchase amortization


5,550



7,153



17,602



21,260




130,893



135,781



393,502



399,064











Income (loss) from operations


39,596



(431)



98,016



(24,067)


Interest and other income


344



42



587



473


Interest and other expense


(2,498)



(2,363)



(7,462)



(7,060)


Income (loss) before income taxes


37,442



(2,752)



91,141



(30,654)


Income tax expense (benefit), net


14,241



2,610



35,643



(4,199)


Net income (loss)


$

23,201



$

(5,362)



$

55,498



$

(26,455)











Net income (loss) per share - basic


$

0.72



$

(0.17)



$

1.73



$

(0.83)


Net income (loss) per share - diluted


$

0.72



$

(0.17)



$

1.71



$

(0.83)











Weighted average outstanding shares - basic


32,186



31,980



32,152



31,934


Weighted average outstanding shares - diluted


32,440



31,980



32,423



31,934


 

CoStar Group, Inc.

Reconciliation of Non-GAAP Financial Measures-Unaudited

(in thousands, except per share data)










Reconciliation of Net Income (Loss) to Non-GAAP Net Income



Three Months Ended

September 30,


Nine Months Ended

September 30,



2016


2015


2016


2015










Net income (loss)


$

23,201



$

(5,362)



$

55,498



$

(26,455)


Income tax expense (benefit), net


14,241



2,610



35,643



(4,199)


Income (loss) before income taxes


37,442



(2,752)



91,141



(30,654)


Purchase amortization and other related costs


11,286



17,117



34,721



44,147


Stock-based compensation expense


9,311



9,312



26,981



25,169


Acquisition and integration related costs




1,787



2,258



5,347


Restructuring and related costs


66



2,279



66



2,279


Settlements and impairments








2,778


Non-GAAP income before income taxes


58,105



27,743



155,167



49,066


Assumed rate for income tax expense, net *


38

%


38

%


38

%


38

%

Assumed provision for income tax expense, net


(22,080)



(10,542)



(58,963)



(18,645)


Non-GAAP net income


$

36,025



$

17,201



$

96,204



$

30,421











Net income (loss) per share - diluted


$

0.72



$

(0.17)



$

1.71



$

(0.83)


Non-GAAP net income per share - diluted**


$

1.11



$

0.53



$

2.97



$

0.94











Weighted average outstanding  shares - basic


32,186



31,980



32,152



31,934


Weighted average outstanding  shares - diluted**


32,440



32,229



32,423



32,229











* A 38% tax rate is assumed in order to approximate the Company's long-term effective corporate tax rate.

** 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.










Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA



Three Months Ended

September 30,


Nine Months Ended

September 30,



2016


2015


2016


2015










Net income (loss)


$

23,201



$

(5,362)



$

55,498



$

(26,455)


Purchase amortization in cost of revenues


5,736



9,964



17,119



22,887


Purchase amortization in operating expenses


5,550



7,153



17,602



21,260


Depreciation and other amortization


6,794



5,403



18,320



14,860


Interest income


(344)



(42)



(587)



(473)


Interest expense


2,498



2,363



7,462



7,060


Income tax expense (benefit), net


14,241



2,610



35,643



(4,199)


EBITDA


$

57,676



$

22,089



$

151,057



$

34,940


Stock-based compensation expense


9,311



9,312



26,981



25,169


Acquisition and integration related costs




1,787



2,258



5,347


Settlements and impairments








2,778


Restructuring and related costs


66



2,279



66



2,279


Adjusted EBITDA


$

67,053



$

35,467



$

180,362



$

70,513


 

CoStar Group, Inc.

Condensed Consolidated Balance Sheets - Unaudited

(in thousands)








September 30,

2016


December 31,

2015



(Unaudited)



ASSETS





Current assets:





  Cash and cash equivalents


$

522,099



$

421,818


  Short-term investments


1,171




  Accounts receivable, net


47,461



40,276


  Income tax receivable


1,049



430


  Prepaid expenses and other current assets


11,663



10,209


Total current assets


583,443



472,733







Long-term investments


9,911



15,507


Deferred income taxes, net


8,153



9,107


Property and equipment, net


85,366



88,311


Goodwill


1,256,353



1,252,945


Intangible assets, net


207,113



238,318


Deposits and other assets


2,248



2,650


Total assets


$

2,152,587



$

2,079,571







LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





  Accounts payable and accrued expenses


$

89,770



$

76,397


  Current portion of long-term debt


21,825



16,746


  Deferred revenue


41,864



42,138


Total current liabilities


153,459



135,281







Long-term debt, less current portion


315,694



338,366


Deferred gain on sale of building


19,346



21,239


Deferred rent


29,193



29,628


Deferred income taxes, net


9,185



4,585


Income taxes payable


7,012



6,692







Stockholders' equity


1,618,698



1,543,780


Total liabilities and stockholders' equity


$

2,152,587



$

2,079,571


 

CoStar Group, Inc.

Results of Segments-Unaudited

(in thousands)










Three Months Ended

September 30,


Nine Months Ended

September 30,


2016


2015


2016


2015

Revenues








North America

$

205,637



$

182,556



$

598,757



$

500,059


International








    External customers

7,074



6,522



20,562



18,696


    Intersegment revenue *

3



4



24



25


Total International revenue

7,077



6,526



20,586



18,721


Intersegment eliminations

(3)



(4)



(24)



(25)


Total revenues

$

212,711



$

189,078



$

619,319



$

518,755










EBITDA








North America **

$

56,305



$

20,993



$

148,296



$

32,816


International ***

1,371



1,096



2,761



2,124


Total EBITDA

$

57,676



$

22,089



$

151,057



$

34,940










*Intersegment revenue recorded during 2015 and 2016 was 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 Company's wholly owned U.K. holding company.









**North America EBITDA includes an allocation of approximately $70,000 and $225,000 for the three months ended September 30, 2016 and 2015, respectively. North America EBITDA includes an allocation of approximately $379,000 and $763,000 for the nine months ended September 30, 2016 and 2015, respectively. This allocation represents costs incurred for International employees involved in development activities of the Company's North America operating segment.









***International EBITDA includes a corporate allocation of approximately $113,000 and $74,000 for the three months ended September 30, 2016 and 2015, respectively.  International EBITDA includes a corporate allocation of approximately $246,000 and $200,000 for the nine months ended September 30, 2016 and 2015, respectively. This allocation represents costs incurred for North America employees involved in management and expansion activities of the Company's International operating segment.

 

CoStar Group, Inc.

Revenues by Services-Unaudited

(in thousands)












Three Months Ended

September 30,


Nine Months Ended

September 30,



2016


2015


2016


2015










Information and analytics









  CoStar Suite


$

103,261



$

91,350



$

301,969



$

266,931


  Information services


19,486



19,126



58,336



56,415


Online marketplaces









  Multifamily


57,654



49,312



164,752



110,187


  Commercial property and land


32,310



29,290



94,262



85,222


Total revenues


$

212,711



$

189,078



$

619,319



$

518,755


 

CoStar Group, Inc.

 

Reconciliation of Non-GAAP Financial Measures with 2015-2016 Quarterly Results - Unaudited

 

 

 

 


(in millions, except per share data)












Reconciliation of Net Income (Loss) to Non-GAAP Net Income













2015


2016



Q1

Q2

Q3

Q4


Q1

Q2

Q3











Net income (loss)


$

(6.1)


$

(15.0)


$

(5.4)


$

23.0



$

16.7


$

15.6


$

23.2


Income tax expense (benefit), net


0.6


(7.4)


2.6


10.2



11.2


10.2


14.2


Income (loss) before income taxes


(5.5)


(22.4)


(2.8)


33.2



27.9


25.8


37.4


Purchase amortization and other related costs


13.5


13.5


17.1


13.9



11.9


11.5


11.3


Stock-based compensation expense


7.4


8.4


9.3


9.4



8.3


9.3


9.3


Acquisition and integration related costs


0.6


2.9


1.8


1.0



1.5


0.8



Restructuring and related costs




2.3


(0.3)





0.1


Settlements and impairments


1.4


1.4








Non-GAAP income before income taxes


17.4


3.9


27.7


57.2



49.6


47.5


58.1


Assumed rate for income tax expense, net *


38

%

38

%

38

%

38

%


38

%

38

%

38

%

Assumed provision for income tax expense, net


(6.6)


(1.5)


(10.5)


(21.7)



(18.9)


(18.0)


(22.1)


Non-GAAP net income


$

10.8


$

2.4


$

17.2


$

35.5



$

30.7


$

29.4


$

36.0












Non-GAAP net income per share - diluted**


$

0.34


$

0.08


$

0.53


$

1.10



$

0.95


$

0.91


$

1.11












Weighted average outstanding  shares - basic


31.8


32.0


32.0


32.0



32.1


32.2


32.2


Weighted average outstanding  shares - diluted**


32.2


32.3


32.2


32.3



32.4


32.4


32.4












* A 38% tax rate is assumed in order to approximate the Company's long-term effective corporate tax rate.



** 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.






Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA













2015


2016



Q1

Q2

Q3

Q4


Q1

Q2

Q3











Net income (loss)


$

(6.1)


$

(15.0)


$

(5.4)


$

23.0



$

16.7


$

15.6


$

23.2


Purchase amortization


13.5


13.5


17.1


13.9



11.9


11.5


11.3


Depreciation and other amortization


4.3


5.1


5.4


5.7



5.6


5.9


6.8


Interest income


(0.3)


(0.1)


(0.0)

(0.1)



(0.1)


(0.2)


(0.3)


Interest expense


2.3


2.4


2.4


2.3



2.5


2.5


2.5


Income tax expense (benefit), net


0.6


(7.4)


2.6


10.2



11.2


10.2


14.2


EBITDA


$

14.3


$

(1.5)


$

22.1


$

55.0



$

47.8


$

45.6


$

57.7


Stock-based compensation expense


7.4


8.4


9.3


9.4



8.3


9.3


9.3


Acquisition and integration related costs


0.6


2.9


1.8


1.0



1.5


0.8



Restructuring and related costs




2.3


(0.3)





0.1


Settlements and impairments


1.4


1.4








Adjusted EBITDA


$

23.7


$

11.2


$

35.5


$

65.1



$

57.6


$

55.7


$

67.1


 

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, 2016


Ended December 31, 2016


Low


High


Low


High









Net income

$

24,400



$

27,300



$

79,900



$

82,700


Income tax expense, net

15,700



17,500



51,300



53,100


Income before income taxes

40,100



44,800



131,200



135,800


Purchase amortization and other related costs

11,200



11,200



46,000



46,000


Stock-based compensation expense

10,000



9,000



37,000



36,000


Acquisition and integration related costs





2,300



2,300


Restructuring and related costs

3,000



2,000



3,000



2,000


Settlements and Impairments








Non-GAAP income before income taxes

64,300



67,000



219,500



222,100


Assumed rate for income tax expense, net *

38

%


38

%


38

%


38

%

Assumed provision for income tax expense, net

(24,400)



(25,500)



(83,400)



(84,400)


Non-GAAP net income

$

39,900



$

41,500



$

136,100



$

137,700










Net income per share - diluted

$

0.75



$

0.84



$

2.47



$

2.55


Non-GAAP net income per share - diluted

$

1.23



$

1.28



$

4.20



$

4.25










Weighted average outstanding  shares - diluted

32,500



32,500



32,400



32,400










* A 38% tax rate is assumed in order to approximate the Company's 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, 2016


Ended December 31, 2016


Low


High


Low


High

Net income

$

24,400



$

27,300



$

79,900



$

82,700


Purchase amortization and other related costs

11,200



11,200



46,000



46,000


Depreciation and other amortization

6,200



6,200



24,600



24,600


Interest and other expense (income), net

2,500



2,500



9,300



9,300


Income tax expense, net

15,700



17,500



51,300



53,100


Stock-based compensation expense

10,000



9,000



37,000



36,000


Acquisition and integration related costs





2,300



2,300


Restructuring and related costs

3,000



2,000



3,000



2,000


Settlements and impairments








Adjusted EBITDA

$

73,000



$

75,700



$

253,400



$

256,000


 

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 more than 10 million registered members. Apartments.com, ApartmentFinder.com and ApartmentHomeLiving.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 Move's family of websites, which include realtor.com®, doorsteps.com and move.com.  CoStar Group's websites attracted an average of nearly 25 million unique monthly visitors in aggregate in the third quarter of 2016. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Canada with a staff of approximately 2,800 worldwide, including the industry's 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 sales, bookings, earnings, profitability, revenue, unique visitors and total visits; the risk that the Company is unable to sustain current revenue and earnings growth rates or increase them; the risk that cost management efforts do not produce the expected results or continue to produce historical results; the risk that the Company's plans with respect to the LoopNet information products, related sales efforts and the planned integration with CoStar Suite may change; the risk that revenues for the fourth quarter and full year 2016 will not be as stated in this press release; the risk that net income for the fourth quarter and full year 2016 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 2016 will not be as stated in this press release; the risk that adjusted EBITDA for the fourth quarter and full year 2016 will not be as stated in this press release. Additional factors that could cause results to differ materially from those anticipated in the forward-looking statements can be found in CoStar's Annual Report on Form 10-K for the year ended December 31, 2015, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, and the Company's other filings with the SEC available at the SEC's 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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