CoStar Group, Inc. (CSGP) Income Statement

Revenue climbed from $677.8M in 2024Q2 to $952.0M in 2026Q3, but year-over-year growth has compressed from 26.9% to 14.2% across the last five quarters, implying the acquisition-driven lift from Apartments.com and Matterport integration is normalizing. Core subscription revenue appears resilient, yet the residential expansion is contributing less incremental top-line lift than the earlier growth trajectory would have implied. Investors should monitor net new bookings and MUVs for evidence of reacceleration, as these are the clearest forward indicators of whether the residential platform is approaching monetization scale.

NOI margin has oscillated between 73.9% and 80.1% over the ten-quarter period, with the 2026Q3 print of 77.8% still below the 2024Q4 peak, suggesting the property-like margin structure of the subscription business is being disrupted by episodic advertising spend. The -2.2% operating margin alongside a 75.2% gross margin indicates that personnel and marketing costs are absorbing essentially all gross profit, leaving no cushion for incremental operating leverage. This spread between healthy gross profitability and negative operating results implies the company has not yet reached the maintenance-phase inflection point management has previously signaled.

The $172.0M FFO figure in 2026Q3 represents the strongest quarterly result in the dataset, but the concurrent $15.0M AFFO implies a roughly $157M wedge of non-cash adjustments that may relate to capitalized commissions, stock-based compensation, or amortization of acquired intangibles. GAAP net income of $74.0M in the same quarter is directionally improved but remains thin relative to headline revenue, reinforcing that FFO is the more informative earnings proxy here. The absence of a meaningful dividend yield, combined with retained cash deployment toward marketing, limits downside protection for holders and concentrates risk in the residential investment thesis.

Management's prior framing of a 'profitability inflection point' has become difficult to validate without an updated outlook, and the subsequent 2026Q3 results—$0.18 EPS and 77.8% NOI margin—suggest stabilization rather than a decisive turn. The decision to withdraw guidance may indicate elevated internal uncertainty around the duration of the residential spending cycle, which remains the dominant swing factor for near-term earnings power. Until AFFO shows sustained convergence toward FFO and operating margin turns positive, the bull case appears dependent on execution that the reported financials do not yet confirm.