CoStar Group, Inc. (CSGP) Balance Sheet

The asset mix is also shifting: net PPE has risen from $922.5M in 2024Q2 to $1.6B in 2026Q3, lifting PPE's share of total assets from roughly 10% to 15%, which implies a larger forward depreciation and amortization drag consistent with the extreme FFO-to-net-income divergence observed in the income statement. Meanwhile, equity has slipped from $8.6B to $8.0B while NOI expanded 37% to $741M — the balance sheet is not compounding book value in proportion to operating growth, suggesting either capital return, impairment, or acquisition-intangible amortization is offsetting retained earnings.

Roughly $1.8B of resources were deployed in a single quarter, as cash fell ~$800M alongside ~$970M of debt retirement, which suggests a near-total extinguishment of funded borrowings rather than a scheduled maturity event. For a subscription data business with 75% gross margins, that removes refinancing and floating-rate exposure almost entirely, but it also implies management has chosen to surrender balance-sheet optionality at the very moment the residential investment case is least validated — a trade-off that warrants monitoring given the guidance withdrawal.

Fixed-charge burden is now de minimis, so coverage ratios computed on interest expense would flatter the picture; the binding constraint is operating, not financial, because AFFO of $15.0M covers only a fraction of the marketing outlays reported elsewhere in this analysis. With no dividend obligation and free cash flow having swung to +$345M in 2026Q3, CoStar retains genuine flexibility, but the average quarterly cash decline of roughly $440M across the ten-quarter window suggests that a sustained positive FCF print would need to be durable rather than quarter-specific before the liquidity profile can be called comfortable again.

Equity has declined from 82.5% to 77.7% of total assets, so capitalization remains conservative in absolute terms, yet the quality of that equity is questionable: an $8.0B base generating $0.9% ROE is earning well below any plausible cost of equity, meaning reported book value is not being economically compounded. Quarterly stock-based compensation of $30M–$71M further dilutes per-share book value without appearing in the headline equity figure's trajectory, and the growing capitalized PPE and intangible stack means D&A will continue to suppress GAAP book earnings even if cash generation inflects.