Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 19, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | COSTAR GROUP INC | |
Entity Central Index Key | 0001057352 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 36,541,576 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 328,425 | $ 273,718 |
Cost of revenues | 71,153 | 62,477 |
Gross profit | 257,272 | 211,241 |
Operating expenses: | ||
Selling and marketing (excluding customer base amortization) | 88,094 | 88,490 |
Software development | 27,928 | 22,913 |
General and administrative | 40,076 | 40,590 |
Customer base amortization | 7,682 | 5,803 |
Total operating expenses | 163,780 | 157,796 |
Income from operations | 93,492 | 53,445 |
Interest and other income | 4,945 | 2,987 |
Interest and other expense | (732) | (690) |
Income before income taxes | 97,705 | 55,742 |
Income tax expense | 12,536 | 3,511 |
Net income | $ 85,169 | $ 52,231 |
Net income per share-basic (in dollars per share) | $ 2.35 | $ 1.46 |
Net income per share-diluted (in dollars per share) | $ 2.33 | $ 1.44 |
Weighted average outstanding shares-basic (in shares) | 36,237 | 35,893 |
Weighted average outstanding shares-diluted (in shares) | 36,567 | 36,350 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 85,169 | $ 52,231 |
Other comprehensive income, net of tax | ||
Foreign currency translation adjustment | 380 | 951 |
Total other comprehensive income | 380 | 951 |
Total comprehensive income | $ 85,549 | $ 53,182 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,232,817 | $ 1,100,416 |
Accounts receivable, less allowance of $4,790 and $5,709 as of March 31, 2019 and December 31, 2018, respectively | 92,841 | 89,192 |
Prepaid expenses and other current assets | 20,713 | 23,690 |
Total current assets | 1,346,371 | 1,213,298 |
Long-term investments | 10,070 | 10,070 |
Deferred income taxes, net | 6,451 | 7,469 |
Property and equipment, net | 85,978 | 83,303 |
Lease right-of-use assets | 112,042 | 0 |
Goodwill | 1,612,065 | 1,611,535 |
Intangible assets, net | 275,750 | 288,911 |
Deferred commission costs, net | 77,375 | 76,031 |
Deposits and other assets | 7,274 | 7,432 |
Income tax receivable | 14,908 | 14,908 |
Total assets | 3,548,284 | 3,312,957 |
Current liabilities: | ||
Accounts payable | 7,919 | 6,327 |
Accrued wages and commissions | 49,264 | 45,588 |
Accrued expenses | 36,291 | 29,821 |
Deferred gain on the sale of building | 0 | 2,523 |
Income taxes payable | 22,536 | 14,288 |
Deferred rent | 0 | 4,153 |
Lease liabilities | 26,062 | 0 |
Deferred revenue | 56,155 | 51,459 |
Total current liabilities | 198,227 | 154,159 |
Deferred gain on the sale of building | 0 | 13,669 |
Deferred rent | 0 | 31,944 |
Deferred income taxes, net | 76,682 | 69,857 |
Income taxes payable | 17,443 | 17,386 |
Lease and other long-term liabilities | 127,318 | 4,000 |
Total liabilities | 419,670 | 291,015 |
Total stockholders’ equity | 3,128,614 | 3,021,942 |
Total liabilities and stockholders’ equity | $ 3,548,284 | $ 3,312,957 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Allowance for doubtful accounts | $ 4,790 | $ 5,709 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] |
Balance at January 1, 2019 | $ 2,705,714 | $ 361 | $ 2,339,253 | $ (9,020) | $ 375,120 |
Balance (in shares) at Dec. 31, 2017 | 36,107,000 | ||||
Beginning balance at Dec. 31, 2017 | 2,651,250 | $ 361 | 2,339,253 | (9,020) | 320,656 |
Net income | 52,231 | 52,231 | |||
Other comprehensive income | 951 | 951 | |||
Exercise of stock options (in shares) | 111,000 | ||||
Exercise of stock options | 9,328 | $ 1 | 9,327 | ||
Restricted stock grants (in shares) | 114,000 | ||||
Restricted stock grants | 0 | $ 1 | (1) | ||
Restricted stock grants surrendered (in shares) | (47,000) | ||||
Restricted stock grants surrendered | (15,392) | $ 0 | (15,392) | ||
Stock-based compensation expense | 10,335 | 10,335 | |||
Employee stock purchase plan (in shares) | 4,000 | ||||
Employee stock purchase plan | 1,431 | $ 0 | 1,431 | ||
Stock issued for acquisitions (in shares) | 103,000 | ||||
Stock issued for acquisitions | 36,366 | $ 1 | 36,365 | ||
Balance (in shares) at Mar. 31, 2018 | 36,392,000 | ||||
Ending balance at Mar. 31, 2018 | 2,800,964 | $ 364 | 2,381,318 | (8,069) | 427,351 |
Balance at January 1, 2019 | 3,033,999 | $ 364 | 2,419,812 | (11,688) | 625,511 |
Balance (in shares) at Dec. 31, 2018 | 36,446,000 | ||||
Beginning balance at Dec. 31, 2018 | 3,021,942 | $ 364 | 2,419,812 | (11,688) | 613,454 |
Net income | 85,169 | 85,169 | |||
Other comprehensive income | 380 | 380 | |||
Exercise of stock options (in shares) | 79,000 | ||||
Exercise of stock options | 10,638 | $ 1 | 10,637 | ||
Restricted stock grants (in shares) | 132,000 | ||||
Restricted stock grants | 0 | $ 1 | (1) | ||
Restricted stock grants surrendered (in shares) | (43,000) | ||||
Restricted stock grants surrendered | (18,679) | $ 0 | (18,679) | ||
Stock-based compensation expense | 12,034 | 12,034 | |||
Management stock purchase plan | 3,491 | ||||
Employee stock purchase plan (in shares) | 4,000 | ||||
Employee stock purchase plan | 1,582 | $ 0 | 1,582 | ||
Balance (in shares) at Mar. 31, 2019 | 36,618,000 | ||||
Ending balance at Mar. 31, 2019 | $ 3,128,614 | $ 366 | $ 2,428,876 | $ (11,308) | $ 710,680 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities: | ||
Net income | $ 85,169 | $ 52,231 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 19,659 | 16,983 |
Amortization of deferred commissions costs | 12,407 | 12,006 |
Amortization of debt issuance costs | 219 | 219 |
Stock-based compensation expense | 12,029 | 10,412 |
Deferred income taxes, net | 3,702 | 1,851 |
Bad debt expense | 2,185 | 1,431 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (5,835) | (2,511) |
Prepaid expenses and other current assets | 206 | (9,522) |
Deferred commissions | (13,729) | (16,263) |
Lease right-of-use and other assets | 5,138 | (3,412) |
Accounts payable and other liabilities | 18,636 | 4,288 |
Deferred revenue | 8,708 | 5,272 |
Net cash provided by operating activities | 148,494 | 72,985 |
Investing activities: | ||
Purchases of property and equipment and other assets | (9,429) | (8,617) |
Cash paid for acquisitions, net of cash acquired | 0 | (340,074) |
Net cash used in investing activities | (9,429) | (348,691) |
Financing activities: | ||
Repurchase of restricted stock to satisfy tax withholding obligations | (18,679) | (15,392) |
Proceeds from exercise of stock options and employee stock purchase plan | 12,061 | 10,616 |
Net cash used in financing activities | (6,618) | (4,776) |
Effect of foreign currency exchange rates on cash and cash equivalents | (46) | 448 |
Net increase (decrease) in cash and cash equivalents | 132,401 | (280,034) |
Cash and cash equivalents at the beginning of period | 1,100,416 | 1,211,463 |
Cash and cash equivalents at the end of period | 1,232,817 | 931,429 |
Supplemental cash flow disclosures: | ||
Interest paid | 519 | 381 |
Income taxes paid | 521 | 533 |
Supplemental non-cash investing and financing activities: | ||
Stock issued in connection with acquisition - ForRent | $ 0 | $ 36,366 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION CoStar Group, Inc. (the “Company” or “CoStar”) provides information, analytics and online marketplace services to the commercial real estate and related business community through its comprehensive, proprietary database of commercial real estate information covering the United States (“U.S.”), the United Kingdom (“U.K.”), and parts of Canada, Spain, Germany and France. The Company provides online marketplaces for commercial real estate, apartment rentals, lands for sale and businesses for sale. The Company operates within two operating segments, North America and International, and its services are typically distributed to its clients under subscription-based license agreements that renew automatically, a majority of which have a term of one year . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Accounting policies are consistent for each operating segment. Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. In the opinion of the Company’s management, the financial statements reflect all adjustments, consisting only of a normal recurring nature, necessary to present fairly the Company’s financial position at March 31, 2019 and December 31, 2018 , the results of its operations for the three months ended March 31, 2019 and 2018 , its comprehensive income for the three months ended March 31, 2019 and 2018 , its changes in stockholders' equity for the three months ended March 31, 2019 and 2018 , and its cash flows for the three months ended March 31, 2019 and 2018 . Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts, useful lives of property and equipment and intangible assets, recoverability of long-lived assets and intangible assets with definite lives, goodwill, income taxes, fair value of equity instruments, fair value of auction rate securities, accounting for business combinations, stock-based compensation, estimating the Company's incremental borrowing rate for its leases, and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ from these estimates. Revenue Recognition The Company derives revenues primarily by (i) providing access to its proprietary database of commercial real estate information and (ii) providing online marketplaces for professional property management companies, property owners, brokers, and landlords, in each case typically through a fixed monthly fee for its subscription-based services. The Company's subscription-based services consist primarily of information, analytics and online marketplace services offered over the Internet to commercial real estate industry and related professionals. Subscription contract rates are based on the number of sites, number of users, organization size, the client’s business focus, geography, the number and types of services to which a client subscribes, the number of properties a client advertises and the prominence and placement of a client's advertised properties in the search results. The Company’s subscription-based license agreements renew automatically, and a majority have a term of one year . The Company analyzes contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers, (ii) identification of distinct performance obligations in the contract, (iii) determination of contract transaction price, (iv) allocation of contract transaction price to the performance obligations and (v) determination of revenue recognition based on timing of satisfaction of the performance obligation(s). The Company recognizes revenues upon the satisfaction of its performance obligation(s) (upon transfer of control of promised services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those services. Revenues from subscription-based services are recognized on a straight-line basis over the term of the agreement. The Company's contracts with customers often include promises to transfer multiple services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. Determining whether services are considered distinct performance obligations may require significant judgment. Judgment is required to determine the standalone selling price (“SSP”) for each distinct performance obligation. In instances where SSP is not directly observable, such as when the Company does not sell the services separately, the Company determines the SSP using available information, including market conditions and other observable inputs. Deferred revenue results from amounts billed in advance to customers or cash received from customers in advance of the sale of subscription licenses and is recognized over the term of the license agreement. Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Contract assets are generated when contractual billing schedules differ from revenue recognition timing. Certain sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions incurred for obtaining new contracts are deferred and then amortized as selling and marketing expenses on a straight-line basis over a period of benefit that the Company has determined to be three years . The three-year amortization period was determined based on several factors, including the nature of the technology and proprietary data underlying the services being purchased, customer contract renewal rates, and industry competition. Certain commission costs are not capitalized as they do not represent incremental costs of obtaining a contract. See Note 3 for further discussion of the Company's revenue recognition. Cost of Revenues Cost of revenues principally consists of salaries, benefits, bonuses and stock-based compensation expenses for the Company's researchers who collect and analyze the commercial real estate data that is the basis for the Company's information, analytics and online marketplaces. Additionally, cost of revenues includes the cost of data from third-party data sources, credit card and other transaction fees relating to processing customer transactions, which are expensed as incurred, and the amortization of acquired trade names, technology and other intangible assets. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs include e-commerce, television, radio, print and other media advertising. Advertising costs were approximately $33 million and $23 million for the three months ended March 31, 2019 and 2018 , respectively. Foreign Currency Translation The Company’s functional currency in its foreign locations is the local currency. Assets and liabilities are translated into U.S. dollars using the exchange rates as of the balance sheet dates. Revenues, expenses, gains and losses are translated at the average exchange rates in effect during each period. Gains and losses resulting from translation are included in accumulated other comprehensive loss. Currency g ains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature are also included in accumulated other comprehensive loss. Net gains or losses resulting from foreign currency exchange transactions are included in the condensed consolidated statements of operations. There were no material gains or losses from foreign currency exchange transactions for the three months ended March 31, 2019 and 2018 . Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss were as follows (in thousands): March 31, December 31, Foreign currency translation adjustment $ (10,578 ) $ (10,958 ) Net unrealized loss on investments, net of tax (730 ) (730 ) Total accumulated other comprehensive loss $ (11,308 ) $ (11,688 ) There were no amounts reclassified out of accumulated other comprehensive loss to the condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018 . The foreign currency translation adjustment includes intra-entity foreign currency transactions that are of a long-term investment nature. See Note 5 for additional information regarding unrealized gains and losses recognized on investments. Income Taxes Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and the basis reported in the Company's condensed consolidated financial statements. Deferred tax liabilities and assets are determined based on the difference between the financial statement and the tax basis of assets and liabilities using enacted rates in effect during the year in which the Company expects differences to reverse. Valuation allowances are provided against assets, including net operating losses, if the Company determines it is more likely than not that some portion or all of an asset may not be realized. Interest and penalties related to income tax matters are recognized in income tax expense. See Note 11 for additional information regarding income taxes. Net Income Per Share Net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period on a basic and diluted basis. The following table sets forth the calculation of basic and diluted net income per share (in thousands, except per share data): Three Months Ended Numerator: 2019 2018 Net income $ 85,169 $ 52,231 Denominator: Denominator for basic net income per share — weighted-average outstanding shares 36,237 35,893 Effect of dilutive securities: Stock options and restricted stock awards 330 457 Denominator for diluted net income per share — weighted-average outstanding shares 36,567 36,350 Net income per share — basic $ 2.35 $ 1.46 Net income per share — diluted $ 2.33 $ 1.44 The Company’s potentially dilutive securities include outstanding stock options, unvested performance-based restricted stock awards and restricted stock units and awards. Shares underlying restricted common stock awards that vest based on Company performance and service conditions that have not been achieved as of the end of the period are not included in the computation of basic or diluted earnings per share. The following table summarizes the shares underlying the performance-based restricted stock awards excluded from the basic and diluted earnings per share calculations (in thousands): Three Months Ended 2019 2018 Performance-based restricted stock awards 89 84 Diluted net income per share considers the impact of potentially dilutive securities except when the inclusion of the potentially dilutive securities would have an anti-dilutive effect. Stock options to purchase approximately 52,000 and 83,000 shares that were outstanding for the three months ended March 31, 2019 and 2018 , respectively, were not included in the computation of diluted net income per share because the inclusion of the potentially dilutive securities would have an anti-dilutive effect. Stock-Based Compensation Equity instruments issued in exchange for services performed by officers, employees, and directors of the Company are accounted for using a fair value based method where the fair value of such equity instruments is recognized as expense in the condensed consolidated statements of operations as they are earned. For stock-based awards that vest over set time periods, compensation expense is measured based on the fair value of the awards at the grant date, and is recognized on a straight-line basis over the vesting periods of the awards, net of an estimated forfeiture rate. For equity instruments that vest based on a performance condition and a market condition, the Company estimates the fair value of each equity instrument granted on the date of grant using a Monte-Carlo simulation model. This pricing model uses multiple simulations to evaluate the probability of achieving the market condition to calculate the fair value of the awards. Stock-based compensation expense is updated based on the expected achievement of the related performance conditions at the end of each reporting period. If the Company's initial estimates of the achievement of the performance conditions change, the related stock-based compensation expense and timing may fluctuate from period to period based on those estimates. If the performance conditions are not met, no stock-based compensation expense will be recognized, and any previously recognized stock-based compensation expense will be reversed. Stock-based compensation expense for stock options and restricted stock awards issued under equity incentive plans and stock purchases under the Employee Stock Purchase Plan included in the Company’s results of operations were as follows (in thousands): Three Months Ended 2019 2018 Cost of revenues $ 2,058 $ 1,431 Selling and marketing (excluding customer base amortization) 1,638 1,835 Software development 2,056 1,729 General and administrative 6,277 5,417 Total stock-based compensation expense $ 12,029 $ 10,412 Leases On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases , later codified as Accounting Standards Codification ("ASC") 842 ( "ASC 842" ), using the modified retrospective method. For periods presented prior to the adoption date, the Company continues to follow its previous policy under ASC 840, Leases . Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on February 28, 2019, for further details of the Company’s policy prior to adoption of ASC 842 . The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at lease commencement, at which time the Company also measures and recognizes a right-of-use ("ROU") asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. For the purposes of recognizing ROU assets and lease liabilities associated with the Company’s leases, the Company has elected the practical expedient to not recognize a ROU asset or lease liability for short-term leases, which are leases with a term of twelve months or less. The lease term is defined as the noncancelable portion of the lease term plus any periods covered by an option to extend the lease if it is reasonably certain that that the option will be exercised. In determining the amount of lease payments used in measuring ROU assets and lease liabilities, the Company has elected the practical expedient not to separate non-lease components from lease components for all classes of underlying assets. Consideration considered part of the lease payments used to measure ROU assets and lease liabilities generally includes fixed payments and variable payments based on either an index or a rate. The ROU asset also includes any lease prepayments, offset by lease incentives. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The rates implicit within the Company's leases are generally not determinable, therefore, the Company's incremental borrowing rate is used to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. Because the Company currently has no outstanding debt, the incremental borrowing rate for each lease is primarily based on publicly-available information for companies within the same industry and with similar credit profiles. The rate is then adjusted for the impact of collateralization, the lease term and other specific terms included in the Company’s lease arrangements. The incremental borrowing rate is determined at lease commencement, or as of January 1, 2019 for operating leases in existence upon adoption of ASC 842 . The incremental borrowing rate is subsequently reassessed upon a modification to the lease arrangement. ROU assets are subsequently assessed for impairment in accordance with the Company’s accounting policy for long-lived assets. Lease costs related to the Company's operating leases are generally recognized as a single ratable lease cost over the lease term. See Note 7 for further discussion of the Company’s accounting for leases. Long-Lived Assets, Intangible Assets and Goodwill Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Goodwill is tested annually for impairment by each reporting unit on October 1 of each year or more frequently if an event or other circumstance indicates that we may not recover the carrying value of the asset. The Company may first assess qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount or elect to bypass such assessment. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, or the Company elects to bypass such assessment, the Company then determines the fair value of each reporting unit. The fair value of each reporting unit is compared to the carrying amount of the reporting unit. If the carrying value of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference. Debt Issuance Costs Costs incurred in connection with the issuance of long term debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method for term debt and on a straight-line basis for revolving debt. To the extent that debt is outstanding, these amounts are reflected in the consolidated balance sheets as direct deductions from a combination of the current and long-term portions of debt, otherwise, they are reflected as current and long-term assets. Upon a refinancing or amendment, previously capitalized debt issuance costs are expensed and included in loss on extinguishment of debt if the Company determines that there has been a substantial modification of the related debt. If the Company determines that there has not been a substantial modification of the related debt, any previously capitalized debt issuance costs are amortized as interest expense over the term of the new debt instrument. See Note 10 for additional information regarding the Company's revolving credit facility. Business Combinations The Company allocates the purchase consideration related to business combinations to the identifiable tangible and intangible assets acquired, and liabilities assumed based on their estimated fair values. The purchase consideration is determined based on the fair value of the assets transferred, liabilities incurred and equity interests issued, after considering any transactions that are separate from the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets and contingent liabilities. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer bases, acquired technology and acquired trade names, useful lives, royalty rates and discount rates. Any adjustments to provisional amounts that are identified during the measurement period are recorded in the reporting period in which the adjustment amounts are determined. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. For a given acquisition, the Company may identify certain pre-acquisition contingencies as of the acquisition date and may extend its review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether the Company includes these contingencies as a part of the fair value estimates of assets acquired and liabilities assumed and, if so, to determine their estimated amounts. If the Company cannot reasonably determine the fair value of a pre-acquisition contingency (non-income tax related) by the end of the measurement period, which is generally the case given the nature of such matters, the Company will recognize an asset or a liability for such pre-acquisition contingency if: (i) it is probable that an asset existed or a liability had been assumed at the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated. Subsequent to the measurement period, changes in the Company's estimates of such contingencies will affect earnings and could have a material effect on its results of operations and financial position. In addition, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. The Company reevaluates these items based upon facts and circumstances that existed as of the acquisition date with any adjustments to its preliminary estimates being recorded to goodwill provided that the Company is within the measurement period. Subsequent to the measurement period, changes to these uncertain tax positions and tax related valuation allowances will affect the Company's provision for income taxes in its condensed consolidated statements of operations and comprehensive income and could have a material impact on its results of operations and financial position. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements On January 1, 2019, the Company adopted ASU 2016-02, Leases , using the modified retrospective method which allows for the application of the transition provisions at the beginning of the period of adoption, rather than at the beginning of the earliest comparative period presented in these condensed consolidated financial statements. As permitted by the guidance, the Company elected to retain the original lease classification and historical accounting for initial direct costs for leases existing prior to the adoption date and did not reassess contracts entered into prior to the adoption date for the existence of a lease. The Company also did not recognize ROU assets and lease liabilities for short-term leases, which are leases in existence as of the adoption date with an original term of twelve months or less. As a result of the adoption of the standard, the Company recognized ROU assets of $116 million , including prepaid rent and deferred rent that was reclassified and recognized as of the adoption date as a component of the ROU asset, as well as lease liabilities of $150 million , on its condensed consolidated balance sheet. The assets and liabilities recognized upon application of the transition provisions were primarily associated with existing office leases. The Company also recognized a cumulative-effect adjustment to beginning retained earnings of $12 million , net of tax, as of January 1, 2019 to recognize the remaining deferred gain on the sale-leaseback of the Company's corporate headquarters building, pursuant to the guidance in ASC 842 . Recent Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (subsequent to adoption of ASU 2018-13, Fair Value Measurement). The ASU was issued to eliminate certain disclosure requirements for fair value measurements, and add and modify other disclosure requirements, as part of its disclosure framework project, including additional requirements for public companies to disclose certain information about the significant unobservable inputs for Level 3 fair value measurements. This guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The Company is currently evaluating the impact this guidance will have on its financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Accounting Standards Codification 350-40 to determine which implementation costs to defer and recognize as an asset. For public business entities, the guidance is effective for annual and interim periods beginning after December 15, 2019. The Company is currently evaluating the impact this guidance will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is designed to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. When determining such expected credit losses, the guidance requires companies to apply a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance is effective on a modified retrospective basis for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. C ompanies may adopt the standard as early as annual reporting periods beginning after December 15, 2018 . The Company is currently evaluating the impact this guidance will have on its financial statements and related disclosures. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregated Revenue The Company provides information, analytics and online marketplaces to the commercial real estate industry and related professionals. The revenues by operating segment and type of service consist of the following (in thousands): Three Months Ended March 31, 2019 2018 North America International Total North America International Total Information and analytics CoStar Suite $ 140,973 $ 6,728 $ 147,701 $ 123,886 $ 6,475 $ 130,361 Information services 16,591 2,259 18,850 12,612 2,448 15,060 Online marketplaces Multifamily 114,268 — 114,268 87,683 — 87,683 Commercial property and land 47,405 201 47,606 40,614 — 40,614 Total revenues $ 319,237 $ 9,188 $ 328,425 $ 264,795 $ 8,923 $ 273,718 Deferred Revenue Changes in deferred revenue for the period were as follows (in thousands): Balance at December 31, 2018 $ 51,459 Revenue recognized in the current period from the amounts in the beginning balance (30,015 ) New deferrals, net of amounts recognized in the current period 38,723 Effects of foreign currency 134 Balance at March 31, 2019 (1) $ 60,301 __________________________ (1) Deferred revenue is comprised of $56 million of current liabilities and $4 million of noncurrent liabilities classified within lease and other long-term liabilities on the Company’s condensed consolidated balance sheet as of March 31, 2019 . Contract Assets The Company had contract assets of $2 million as of March 31, 2019 and December 31, 2018 , which are generated when contractual billing schedules differ from revenue recognition timing. Contract assets represent a conditional right to consideration for satisfied performance obligations that becomes a receivable when the conditions are satisfied. Commissions The Company recognized $12 million of amortization of deferred commissions included in selling and marketing expense in the Company's condensed consolidated statements of operations for both the three months ended March 31, 2019 and 2018 . The Company determined that no deferred commissions were impaired as of March 31, 2019 . Commissions expense activity for the three months ended March 31, 2019 and 2018 was as follows (in thousands): Three Months Ended 2019 2018 Commissions incurred $ 18,551 $ 23,595 Commissions capitalized in the current period (13,729 ) (16,263 ) Amortization of deferred commissions costs 12,407 12,006 Total commissions expense $ 17,229 $ 19,338 Unsatisfied Performance Obligations Remaining contract consideration for which revenue has not been recognized due to unsatisfied performance obligations was approximately $206 million at March 31, 2019 , which the Company expects to recognize over the next five years . This amount does not include contract consideration for contracts with a duration of one year or less. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On February 21, 2018 (the "Acquisition Date"), the Company acquired all of the issued and outstanding capital stock of DE Holdings, Inc., including its ForRent division ("ForRent"), a wholly owned subsidiary of Dominion Enterprises ("Seller"), for a purchase price of approximately $376 million . The purchase price was comprised of approximately $340 million in cash and 103,280 shares of Company common stock, valued at approximately $36 million . ForRent's primary service is digital advertising provided through a network of four multifamily websites. The acquisition is expected to yield increased revenue, significant cost synergies and an improved competitive position in the industry. The Company applied the acquisition method to account for the ForRent transaction, which requires that assets acquired and liabilities assumed be recorded at their fair values as of the acquisition date. The following table summarizes the amounts recorded for acquired assets and assumed liabilities recorded at their fair values as of the Acquisition Date (in thousands): Final: February 21, 2018 Cash and cash equivalents $ 59 Accounts receivable 8,769 Indemnification asset 5,443 Goodwill 266,595 Intangible assets 141,300 Deferred tax liabilities (34,032 ) Contingent sales tax liability (6,260 ) State uncertain income tax position liability (2,047 ) Other assets and liabilities (3,535 ) Fair value of identifiable net assets acquired $ 376,292 The net assets of ForRent were recorded at their estimated fair values. In valuing acquired assets and assumed liabilities, fair value estimates were based primarily on future expected cash flows, market rate assumptions for contractual obligations, and appropriate discount rates. Measurement period adjustments related to the determination of working capital as of the Acquisition Date and recognized in 2018 , were not material. The acquired customer base for the acquisition is composed of acquired customer contracts and the related customer relationships, and has a weighted average estimated useful life of ten years . The acquired technology has an estimated useful life of three years . The acquired trade name has a weighted average estimated useful life of ten years . The acquired building photography has an estimated useful life of one year . Amortization of the acquired customer base is recognized on an accelerated basis related to the expected economic benefit of the intangible asset, while amortization of the acquired technology, acquired building photography and acquired trade names and other intangible assets is recognized on a straight-line basis over their respective estimated useful lives. Goodwill recorded in connection with this acquisition is not amortized, but is subject to an annual impairment test. The $267 million of goodwill recorded as part of the acquisition is associated with the Company's North America operating segment. $8 million of the goodwill recognized is expected to be deductible for income tax purposes in future periods. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recorded as part of the ForRent acquisition includes but is not limited to: (i) the expected synergies and other benefits that the Company believes will result from combining its operations with ForRent's operations; and (ii) any intangible assets that do not qualify for separate recognition, such as the assembled workforce. Upon acquisition, the Company assessed the (i) probability of a contingent sales tax liability and (ii) a state uncertain income tax position liability due to apportionment factors, and recorded accruals of $6 million and $2 million , respectively. The Company could not determine the fair value for the pre-acquisition state sales tax liability and therefore estimated a liability in accordance with ASC 450 Contingencies , using a state-by-state assessment. The uncertain income tax position was determined in accordance with the provisions of ASC 740 Income Tax, and was recorded as part of the purchase price allocation. The Seller has provided an indemnity for tax liabilities related to periods prior to the acquisition. The Seller's indemnification for sales taxes in the state of Texas is limited to approximately $2 million . The total indemnification asset established as of the acquisition date was $5 million . $1 million of the uncertain income tax position liability and related indemnification asset recognized as of the acquisition date was reversed during 2018 , upon expiration of the statute of limitations applicable to the uncertain income tax position. As part of the ForRent acquisition, the Company incurred $3 million of transaction costs during the three months ended March 31, 2018 . Additionally, the Company paid $12 million cash into a cash escrow account for retention compensation for certain ForRent employees, payable if they remained employed by the Company for a defined six-month period following the acquisition or were earlier terminated without cause or resigned for good reason. In the event funds remained in the escrow account after the employees were compensated and the defined six-month period ended, those funds were remitted to the Seller. The Company expensed all of the retention compensation as the services were performed in the post-combination period in 2018 . Other Acquisitions On October 12, 2018, the Company acquired Realla Ltd. ("Realla"), the operator of a commercial property listings and data management platform in the U.K., for £12 million ( $15 million ). The purchase agreement required an initial payment of £10 million ( $13 million ), net of cash acquired, at the time of closing, and the remainder of the purchase price is due one year following the acquisition date. In connection with the acquisition, the Company recorded goodwill and intangible assets of £8 million ( $10 million ) and £4 million ( $5 million ), respectively. The net assets of Realla were recorded at their estimated fair value. The estimated fair values are preliminary, subject to the final determination of net working capital as of the acquisition date and completion of the Company's assessment of certain tax matters. On November 8, 2018, the Company acquired Cozy Services, Ltd. ("Cozy"), a leading provider of online rental solutions that provides a broad spectrum of services to both landlords and tenants, for $65 million , net of cash acquired. As part of the acquisition, the Company recorded goodwill and intangible assets of $53 million and $11 million , respectively. The net assets of Cozy were recorded at their estimated fair value. The estimated fair values are preliminary, subject to the final determination of net working capital and completion of the Company's assessment of certain tax matters. Pro Forma Financial Information The unaudited pro forma financial information presented below summarizes the combined results of operations for the Company and ForRent as though the companies were combined as of January 1, 2017. The unaudited pro forma financial information for all periods presented includes amortization charges from acquired intangible assets, retention compensation, as referenced above, and the related tax effects, along with certain other accounting effects, but excludes the impacts of any expected operational synergies. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2017. The unaudited pro forma financial information for the three months ended March 31, 2018 combine the historical results of the Company for the three months ended March 31, 2018 and the historical results of ForRent for the period prior to the Acquisition Date and the effects of the pro forma adjustments listed above. The unaudited pro forma financial information was as follows (in thousands, except per share data): Three Months Ended 2018 Revenue $ 287,470 Net income $ 52,839 Net income per share - basic 1.47 Net income per share - diluted 1.45 Revenue and net loss attributable to ForRent from February 21, 2018 through March 31, 2018 were $8 million and $8 million , respectively. The net loss was primarily due to personnel costs, including retention compensation, and the amortization of intangible assets upon acquisition. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The Company's investments consist of long-term variable rate debt instruments with an auction reset feature, referred to as auction rate securities ("ARS"), classified as available-for-sale and carried at fair value. Scheduled maturities of investments classified as available-for-sale as of March 31, 2019 are as follows (in thousands): Maturity Fair Value Due: April 1, 2019 — March 31, 2020 $ — April 1, 2020 — March 31, 2024 — April 1, 2024 — March 31, 2029 — After March 31, 2029 10,070 Available-for-sale investments $ 10,070 The Company had no realized gains or losses on its investments for each of the three months ended March 31, 2019 and 2018 , respectively. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis. Changes in unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of accumulated other comprehensive loss in stockholders’ equity until realized. A decline in market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Dividend and interest income are recognized when earned. As of March 31, 2019 , the amortized cost basis and fair value of investments classified as available-for-sale were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Auction rate securities $ 10,800 $ — $ (730 ) $ 10,070 Available-for-sale investments $ 10,800 $ — $ (730 ) $ 10,070 As of December 31, 2018 , the amortized cost basis and fair value of investments classified as available-for-sale were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Auction rate securities $ 10,800 $ — $ (730 ) $ 10,070 Available-for-sale investments $ 10,800 $ — $ (730 ) $ 10,070 The unrealized losses on the Company’s investments as of March 31, 2019 and December 31, 2018 were generated primarily from changes in interest rates and ARS that failed to settle at auction, due to adverse conditions in the global credit markets. The losses are considered temporary, as the contractual terms of these investments do not permit the issuer to settle the security at a price less than the amortized cost of the investment. Because the Company does not intend to sell these instruments and it is not more likely than not that the Company will be required to sell these instruments prior to anticipated recovery, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired as of March 31, 2019 and December 31, 2018 . See Note 6 for further discussion of the fair value of the Company’s financial assets. The components of the Company’s investments in an unrealized loss position for twelve months or longer were as follows (in thousands): March 31, December 31, Aggregate Fair Value Gross Unrealized Losses Aggregate Fair Value Gross Unrealized Losses Auction rate securities $ 10,070 $ (730 ) $ 10,070 $ (730 ) Investments in an unrealized loss position $ 10,070 $ (730 ) $ 10,070 $ (730 ) The Company did not have any investments in an unrealized loss position for less than twelve months as of March 31, 2019 and December 31, 2018 , respectively. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. There is a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following table represents the Company's fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of March 31, 2019 (in thousands): Level 1 Level 2 Level 3 Total Assets: Money market funds $ 594,036 $ — $ — $ 594,036 Auction rate securities — — 10,070 10,070 Total assets measured at fair value $ 594,036 $ — $ 10,070 $ 604,106 The following table represents the Company's fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of December 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Assets: Money market funds $ 590,567 $ — $ — $ 590,567 Auction rate securities — — 10,070 10,070 Total assets measured at fair value $ 590,567 $ — $ 10,070 $ 600,637 The carrying value of accounts receivable, accounts payable and accrued expenses approximates fair value. The Company’s Level 3 assets consist of ARS, whose underlying assets are primarily student loan securities supported by guarantees from the Federal Family Education Loan Program (“FFELP”) of the U.S. Department of Education. The following table summarizes changes in fair value of the Company’s Level 3 assets from December 31, 2017 to March 31, 2019 (in thousands): Auction Rate Securities Balance at December 31, 2017 $ 10,070 Decrease in unrealized loss included in accumulated other comprehensive loss — Balance at December 31, 2018 10,070 Decrease in unrealized loss included in accumulated other comprehensive loss — Balance at March 31, 2019 $ 10,070 ARS are variable rate debt instruments whose interest rates are reset approximately every 28 days . The underlying securities have contractual maturities greater than twenty years . The ARS are recorded at fair value. As of March 31, 2019 , the Company held ARS with $11 million par value, all of which failed to settle at auction. The majority of these investments are of high credit quality and are primarily student loan securities supported by guarantees from the FFELP of the U.S. Department of Education. The Company may not be able to liquidate and fully recover the carrying value of the ARS in the near term. As a result, these securities are classified as long-term investments on the Company’s condensed consolidated balance sheet as of March 31, 2019 . See Note 5 for further discussion of the scheduled maturities of investments classified as available-for-sale. While the Company continues to earn interest on its ARS investments at the contractual rate, these investments are not currently actively trading and therefore do not currently have a readily determinable market value. The estimated fair value of the ARS no longer approximates par value. The Company used a discounted cash flow model to determine the estimated fair value of its investment in ARS as of March 31, 2019 . The assumptions used in preparing the discounted cash flow model include estimates for interest rates, credit spreads, timing and amount of contractual cash flows, liquidity risk premiums, expected holding periods and default risk. The Company updates the discounted cash flow model on a quarterly basis to reflect any changes in the assumptions used in the model and settlements of ARS investments that occurred during the period. The only significant unobservable input in the discounted cash flow model is the discount rate. The discount rate used represents the Company's estimate of the yield expected by a market participant from the ARS investments. The weighted average discount rate used in the discounted cash flow models as of March 31, 2019 and December 31, 2018 was approximately 6% . Selecting another discount rate within the range used in the discounted cash flow model would not result in a significant change to the fair value of the ARS. Based on this assessment of fair value, as of March 31, 2019 , the Company determined there was no decline in the fair value of its ARS investments. If the issuers are unable to successfully close future auctions and/or their credit ratings deteriorate, the Company may be required to record unrealized losses in accumulated other comprehensive loss or an other-than-temporary impairment charge to earnings on these investments. |
LEASES LEASES
LEASES LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating leases for its office facilities, data centers and certain vehicles, as well as finance leases for office equipment. The Company's leases have remaining terms of less than one year to ten years . The leases contain various renewal and termination options. The period which is subject to an option to extend the lease is included in the lease term if it is reasonably certain that the option will be exercised. The period which is subject to an option to terminate the lease is included if it is reasonably certain that the option will not be exercised. Lease costs related to the Company's operating leases included in the condensed consolidated statement of operations were as follows (in thousands): Three Months Ended Operating lease costs: Cost of revenues $ 3,238 Software development 952 Selling and marketing (excluding customer base amortization) 2,191 General and administrative 292 Total operating lease costs $ 6,673 The impact of lease costs related to finance leases and short-term leases was not material for the three months ended March 31, 2019 . Rent expense related to operating leases for office facilities was $7 million for the three months ended March 31, 2018 . Supplemental balance sheet information related to operating leases was as follows (in thousands): Balance Balance Sheet Location March 31, 2019 Long-term lease liabilities Lease and other long-term liabilities $ 119,172 Weighted average remaining lease term in years 5.7 Weighted average discount rate 4.2 % Balance sheet information related to finance leases was not material as of March 31, 2019 . Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 7,716 ROU assets obtained in exchange for lease obligations: Operating leases $ 170 Maturities of operating lease liabilities at March 31, 2019 were as follows (in thousands): April 1, 2019 - March 31, 2020 $ 31,652 April 1, 2020 - March 31, 2021 30,116 April 1, 2021 - March 31, 2022 27,193 April 1, 2022 - March 31, 2023 26,377 April 1, 2023 - March 31, 2024 24,421 Thereafter 23,941 Total lease payments 163,700 Less imputed interest (18,466 ) Present value of lease liabilities $ 145,234 |
GOODWILL
GOODWILL | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill [Abstract] | |
GOODWILL | GOODWILL The changes in the carrying amount of goodwill by operating segment consist of the following (in thousands): North America International Total Goodwill, December 31, 2017 $ 1,253,494 $ 29,963 $ 1,283,457 Acquisitions 319,594 10,344 329,938 Effect of foreign currency translation — (1,860 ) (1,860 ) Goodwill, December 31, 2018 1,573,088 38,447 1,611,535 Effect of foreign currency translation — 530 530 Goodwill, March 31, 2019 $ 1,573,088 $ 38,977 $ 1,612,065 The Company recorded goodwill of approximately $267 million in connection with the February 21, 2018 acquisition of ForRent, a digital advertising service provided through a network of four multifamily websites. The Company recorded goodwill of approximately $10 million in connection with the October 12, 2018 acquisition of Realla, the operator of a commercial property listings and data management platform in the U.K., including a free-to-list search engine for commercial property listings. The Company recorded goodwill of approximately $53 million in connection with the November 8, 2018 acquisition of Cozy, a leading provider of online rental solutions that provides a broad spectrum of services to both landlords and tenants, including property listings, rent estimates, rental applications, tenant screening, online rent payments and expense tracking. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets consist of the following (in thousands, except amortization period data): March 31, December 31, Weighted- Average Amortization Period (in years) Capitalized product development cost $ 2,173 $ 2,173 4 Accumulated amortization (2,173 ) (2,173 ) Capitalized product development cost, net — — Building photography 9,087 9,035 2 Accumulated amortization (8,949 ) (8,809 ) Building photography, net 138 226 Acquired technology 101,887 103,128 5 Accumulated amortization (85,963 ) (85,344 ) Acquired technology, net 15,924 17,784 Acquired customer base 339,685 339,574 10 Accumulated amortization (207,199 ) (199,405 ) Acquired customer base, net 132,486 140,169 Acquired trade names and other intangible assets 190,614 190,717 12 Accumulated amortization (63,412 ) (59,985 ) Acquired trade names and other intangible assets, net 127,202 130,732 Intangible assets, net $ 275,750 $ 288,911 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On October 19, 2017, the Company entered into an amended and restated 2017 Credit Agreement (the "2017 Credit Agreement"), which amended and restated in its entirety, the existing 2014 Credit Agreement dated April 1, 2014 (the "2014 Credit Agreement"). The 2017 Credit Agreement provides for a $750 million revolving credit facility with a term of five years from a syndicate of financial institutions as lenders and issuing banks. The 2017 facility may be used for working capital and other general corporate purposes of the Company and its subsidiaries. Up to $20 million of the revolving credit facility is available for the issuance of letters of credit. The Company had an irrevocable standby letter of credit outstanding totaling $0.2 million as of March 31, 2019 and December 31, 2018 , which was required to secure its San Francisco office lease. The letter of credit was established in 2014 and automatically renews through January 31, 2025. The loans under the 2017 Credit Agreement bear interest during any interest period selected by the Company, at either (i) the London interbank offered rate for deposits in U.S. dollars with a maturity comparable to such interest period, adjusted for statutory reserves (“LIBOR”), plus an initial spread of 1.25% per annum, subject to adjustment based on the First Lien Secured Leverage Ratio (as defined in the 2017 Credit Agreement) of the Company, or (ii) at the greatest of (x) the prime rate from time to time announced by JPMorgan Chase Bank, N.A., (y) the federal funds effective rate plus half of 1% and (z) LIBOR for a one-month interest period plus 1.00% , plus an initial spread of 0.25% per annum, subject to adjustment based on the First Lien Secured Leverage Ratio of the Company. If an event of default occurs under the 2017 Credit Agreement, the interest rate on overdue amounts will increase by 2.00% per annum. The obligations under the 2017 Credit Agreement are guaranteed by all material subsidiaries of the Company and are secured by a lien on substantially all of the assets of the Company and its material subsidiaries, in each case subject to certain exceptions, pursuant to security and guarantee agreements entered into on the closing date of the 2017 Credit Agreement. The 2017 Credit Agreement requires the Company to maintain (i) a First Lien Secured Leverage Ratio not exceeding 3.50 to 1.00 and (ii) after the incurrence of additional indebtedness under certain specified exceptions in the 2017 Credit Agreement, a Total Leverage Ratio (as defined in the 2017 Credit Agreement) not exceeding 4.50 to 1.00. The 2017 Credit Agreement also includes other covenants, including ones that, subject to certain exceptions, restrict the ability of the Company and its subsidiaries to (i) incur additional indebtedness, (ii) create, incur, assume or permit to exist any liens, (iii) enter into mergers, consolidations or similar transactions, (iv) make investments and acquisitions, (v) make certain dispositions of assets, (vi) make dividends, distributions and prepayments of certain indebtedness, and (vii) enter into certain transactions with affiliates. The Company was in compliance with the covenants in the 2017 Credit Agreement as of March 31, 2019 . The Company had no outstanding long-term debt at March 31, 2019 and December 31, 2018 . For the three months ended March 31, 2019 and 2018 , the Company recognized interest expense of $0.7 million , including amortization of debt issuance costs of $0.2 million and commitment fees of $0.5 million , on its revolving credit facility. The Company had $3 million of deferred debt issuance costs included in deposits and other assets on the Company's condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018 . |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for the three months ended March 31, 2019 and 2018 reflects an effective tax rate of approximately 13% and 6% , respectively. The increase in the effective tax rate was primarily due to higher income before income taxes for the three months ended March 31, 2019 , partially offset by an increase in excess tax benefits. The amounts for other discrete items for the three months ended March 31, 2019 and 2018 were consistent. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company leases office facilities under various non-cancelable operating leases. The leases contain various renewal options. See Note 7 for further discussion of the Company's operating lease commitments. In addition, the Company has other commitments related to purchase obligations for goods and services. Currently, and from time to time, the Company is involved in litigation incidental to the conduct of its business. In accordance with GAAP, the Company records a provision for a liability when it is both probable that a liability has been incurred and the amount can be reasonably estimated. While it is reasonably possible that an unfavorable outcome may occur as a result of one or more of the Company’s current litigation matters, at this time management has concluded that the resolutions of these matters are not expected to have a material adverse effect on the Company's consolidated financial position, future results of operations or liquidity. Legal defense costs are expensed as incurred. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Segment Information The Company manages its business geographically in two operating segments, with the primary areas of measurement and decision-making being North America, which includes the U.S. and Canada, and International, which includes the U.K., Spain, Germany and France. Management relies on an internal management reporting process that provides revenue and operating segment net income before interest and other income (expense), loss on debt extinguishment, income taxes, depreciation and amortization (“EBITDA”). Management believes that operating segment EBITDA is an appropriate measure for evaluating the operational performance of the Company’s operating segments. EBITDA is used by management to internally measure operating and management performance and to evaluate the performance of the business. However, this measure should be considered in addition to, not as a substitute for or superior to, income from operations or other measures of financial performance prepared in accordance with GAAP. Summarized information by operating segment consists of the following (in thousands): Three Months Ended 2019 2018 EBITDA North America $ 115,268 $ 71,055 International (2,117 ) (627 ) Total EBITDA $ 113,151 $ 70,428 The reconciliation of net income to EBITDA consists of the following (in thousands): Three Months Ended 2019 2018 Net income $ 85,169 $ 52,231 Amortization of acquired intangible assets in cost of revenues 5,513 4,608 Amortization of acquired intangible assets in operating expenses 7,682 5,803 Depreciation and other amortization 6,464 6,572 Interest and other income (4,945 ) (2,987 ) Interest and other expense 732 690 Income tax expense 12,536 3,511 EBITDA $ 113,151 $ 70,428 Summarized information by operating segment consists of the following (in thousands): March 31, December 31, Property and equipment, net North America $ 81,867 $ 79,493 International 4,111 3,810 Total property and equipment, net $ 85,978 $ 83,303 Goodwill North America $ 1,573,088 $ 1,573,088 International 38,977 38,447 Total goodwill $ 1,612,065 $ 1,611,535 Assets North America $ 3,475,272 $ 3,253,035 International 73,012 59,922 Total assets $ 3,548,284 $ 3,312,957 Liabilities North America $ 386,122 $ 272,776 International 33,548 18,239 Total liabilities $ 419,670 $ 291,015 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 12, 2018, the Company acquired all of the issued share capital of Realla Ltd., the operator of a commercial property listings and data management platform in the U.K., including a free-to-list search engine for commercial property listings. The determination of the final purchase price is subject to customary working capital and other post-closing adjustments. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Accounting policies are consistent for each operating segment. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts, useful lives of property and equipment and intangible assets, recoverability of long-lived assets and intangible assets with definite lives, goodwill, income taxes, fair value of equity instruments, fair value of auction rate securities, accounting for business combinations, stock-based compensation, estimating the Company's incremental borrowing rate for its leases, and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition The Company derives revenues primarily by (i) providing access to its proprietary database of commercial real estate information and (ii) providing online marketplaces for professional property management companies, property owners, brokers, and landlords, in each case typically through a fixed monthly fee for its subscription-based services. The Company's subscription-based services consist primarily of information, analytics and online marketplace services offered over the Internet to commercial real estate industry and related professionals. Subscription contract rates are based on the number of sites, number of users, organization size, the client’s business focus, geography, the number and types of services to which a client subscribes, the number of properties a client advertises and the prominence and placement of a client's advertised properties in the search results. The Company’s subscription-based license agreements renew automatically, and a majority have a term of one year . The Company analyzes contracts to determine the appropriate revenue recognition using the following steps: (i) identification of contracts with customers, (ii) identification of distinct performance obligations in the contract, (iii) determination of contract transaction price, (iv) allocation of contract transaction price to the performance obligations and (v) determination of revenue recognition based on timing of satisfaction of the performance obligation(s). The Company recognizes revenues upon the satisfaction of its performance obligation(s) (upon transfer of control of promised services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those services. Revenues from subscription-based services are recognized on a straight-line basis over the term of the agreement. The Company's contracts with customers often include promises to transfer multiple services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. Determining whether services are considered distinct performance obligations may require significant judgment. Judgment is required to determine the standalone selling price (“SSP”) for each distinct performance obligation. In instances where SSP is not directly observable, such as when the Company does not sell the services separately, the Company determines the SSP using available information, including market conditions and other observable inputs. Deferred revenue results from amounts billed in advance to customers or cash received from customers in advance of the sale of subscription licenses and is recognized over the term of the license agreement. Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Contract assets are generated when contractual billing schedules differ from revenue recognition timing. Certain sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions incurred for obtaining new contracts are deferred and then amortized as selling and marketing expenses on a straight-line basis over a period of benefit that the Company has determined to be three years . The three-year amortization period was determined based on several factors, including the nature of the technology and proprietary data underlying the services being purchased, customer contract renewal rates, and industry competition. Certain commission costs are not capitalized as they do not represent incremental costs of obtaining a contract. |
Cost of Revenues | Cost of Revenues Cost of revenues principally consists of salaries, benefits, bonuses and stock-based compensation expenses for the Company's researchers who collect and analyze the commercial real estate data that is the basis for the Company's information, analytics and online marketplaces. Additionally, cost of revenues includes the cost of data from third-party data sources, credit card and other transaction fees relating to processing customer transactions, which are expensed as incurred, and the amortization of acquired trade names, technology and other intangible assets. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising costs include e-commerce, television, radio, print and other media advertising. |
Foreign Currency Translation | Foreign Currency Translation The Company’s functional currency in its foreign locations is the local currency. Assets and liabilities are translated into U.S. dollars using the exchange rates as of the balance sheet dates. Revenues, expenses, gains and losses are translated at the average exchange rates in effect during each period. Gains and losses resulting from translation are included in accumulated other comprehensive loss. Currency g ains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature are also included in accumulated other comprehensive loss. Net gains or losses resulting from foreign currency exchange transactions are included in the condensed consolidated statements of operations. |
Income Taxes | Income Taxes Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and the basis reported in the Company's condensed consolidated financial statements. Deferred tax liabilities and assets are determined based on the difference between the financial statement and the tax basis of assets and liabilities using enacted rates in effect during the year in which the Company expects differences to reverse. Valuation allowances are provided against assets, including net operating losses, if the Company determines it is more likely than not that some portion or all of an asset may not be realized. Interest and penalties related to income tax matters are recognized in income tax expense. |
Net Income Per Share | The Company’s potentially dilutive securities include outstanding stock options, unvested performance-based restricted stock awards and restricted stock units and awards. Shares underlying restricted common stock awards that vest based on Company performance and service conditions that have not been achieved as of the end of the period are not included in the computation of basic or diluted earnings per share. Net Income Per Share Net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period on a basic and diluted basis. |
Stock-Based Compensation | Stock-Based Compensation Equity instruments issued in exchange for services performed by officers, employees, and directors of the Company are accounted for using a fair value based method where the fair value of such equity instruments is recognized as expense in the condensed consolidated statements of operations as they are earned. For stock-based awards that vest over set time periods, compensation expense is measured based on the fair value of the awards at the grant date, and is recognized on a straight-line basis over the vesting periods of the awards, net of an estimated forfeiture rate. For equity instruments that vest based on a performance condition and a market condition, the Company estimates the fair value of each equity instrument granted on the date of grant using a Monte-Carlo simulation model. This pricing model uses multiple simulations to evaluate the probability of achieving the market condition to calculate the fair value of the awards. Stock-based compensation expense is updated based on the expected achievement of the related performance conditions at the end of each reporting period. If the Company's initial estimates of the achievement of the performance conditions change, the related stock-based compensation expense and timing may fluctuate from period to period based on those estimates. If the performance conditions are not met, no stock-based compensation expense will be recognized, and any previously recognized stock-based compensation expense will be reversed. |
Leases | Leases On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases , later codified as Accounting Standards Codification ("ASC") 842 ( "ASC 842" ), using the modified retrospective method. For periods presented prior to the adoption date, the Company continues to follow its previous policy under ASC 840, Leases . Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on February 28, 2019, for further details of the Company’s policy prior to adoption of ASC 842 . The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at lease commencement, at which time the Company also measures and recognizes a right-of-use ("ROU") asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. For the purposes of recognizing ROU assets and lease liabilities associated with the Company’s leases, the Company has elected the practical expedient to not recognize a ROU asset or lease liability for short-term leases, which are leases with a term of twelve months or less. The lease term is defined as the noncancelable portion of the lease term plus any periods covered by an option to extend the lease if it is reasonably certain that that the option will be exercised. In determining the amount of lease payments used in measuring ROU assets and lease liabilities, the Company has elected the practical expedient not to separate non-lease components from lease components for all classes of underlying assets. Consideration considered part of the lease payments used to measure ROU assets and lease liabilities generally includes fixed payments and variable payments based on either an index or a rate. The ROU asset also includes any lease prepayments, offset by lease incentives. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The rates implicit within the Company's leases are generally not determinable, therefore, the Company's incremental borrowing rate is used to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. Because the Company currently has no outstanding debt, the incremental borrowing rate for each lease is primarily based on publicly-available information for companies within the same industry and with similar credit profiles. The rate is then adjusted for the impact of collateralization, the lease term and other specific terms included in the Company’s lease arrangements. The incremental borrowing rate is determined at lease commencement, or as of January 1, 2019 for operating leases in existence upon adoption of ASC 842 . The incremental borrowing rate is subsequently reassessed upon a modification to the lease arrangement. ROU assets are subsequently assessed for impairment in accordance with the Company’s accounting policy for long-lived assets. |
Debt Issuance Costs | Debt Issuance Costs Costs incurred in connection with the issuance of long term debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method for term debt and on a straight-line basis for revolving debt. To the extent that debt is outstanding, these amounts are reflected in the consolidated balance sheets as direct deductions from a combination of the current and long-term portions of debt, otherwise, they are reflected as current and long-term assets. Upon a refinancing or amendment, previously capitalized debt issuance costs are expensed and included in loss on extinguishment of debt if the Company determines that there has been a substantial modification of the related debt. If the Company determines that there has not been a substantial modification of the related debt, any previously capitalized debt issuance costs are amortized as interest expense over the term of the new debt instrument. |
Business Combinations | Business Combinations The Company allocates the purchase consideration related to business combinations to the identifiable tangible and intangible assets acquired, and liabilities assumed based on their estimated fair values. The purchase consideration is determined based on the fair value of the assets transferred, liabilities incurred and equity interests issued, after considering any transactions that are separate from the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets and contingent liabilities. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer bases, acquired technology and acquired trade names, useful lives, royalty rates and discount rates. Any adjustments to provisional amounts that are identified during the measurement period are recorded in the reporting period in which the adjustment amounts are determined. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. For a given acquisition, the Company may identify certain pre-acquisition contingencies as of the acquisition date and may extend its review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether the Company includes these contingencies as a part of the fair value estimates of assets acquired and liabilities assumed and, if so, to determine their estimated amounts. If the Company cannot reasonably determine the fair value of a pre-acquisition contingency (non-income tax related) by the end of the measurement period, which is generally the case given the nature of such matters, the Company will recognize an asset or a liability for such pre-acquisition contingency if: (i) it is probable that an asset existed or a liability had been assumed at the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated. Subsequent to the measurement period, changes in the Company's estimates of such contingencies will affect earnings and could have a material effect on its results of operations and financial position. In addition, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. The Company reevaluates these items based upon facts and circumstances that existed as of the acquisition date with any adjustments to its preliminary estimates being recorded to goodwill provided that the Company is within the measurement period. Subsequent to the measurement period, changes to these uncertain tax positions and tax related valuation allowances will affect the Company's provision for income taxes in its condensed consolidated statements of operations and comprehensive income and could have a material impact on its results of operations and financial position. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements On January 1, 2019, the Company adopted ASU 2016-02, Leases , using the modified retrospective method which allows for the application of the transition provisions at the beginning of the period of adoption, rather than at the beginning of the earliest comparative period presented in these condensed consolidated financial statements. As permitted by the guidance, the Company elected to retain the original lease classification and historical accounting for initial direct costs for leases existing prior to the adoption date and did not reassess contracts entered into prior to the adoption date for the existence of a lease. The Company also did not recognize ROU assets and lease liabilities for short-term leases, which are leases in existence as of the adoption date with an original term of twelve months or less. As a result of the adoption of the standard, the Company recognized ROU assets of $116 million , including prepaid rent and deferred rent that was reclassified and recognized as of the adoption date as a component of the ROU asset, as well as lease liabilities of $150 million , on its condensed consolidated balance sheet. The assets and liabilities recognized upon application of the transition provisions were primarily associated with existing office leases. The Company also recognized a cumulative-effect adjustment to beginning retained earnings of $12 million , net of tax, as of January 1, 2019 to recognize the remaining deferred gain on the sale-leaseback of the Company's corporate headquarters building, pursuant to the guidance in ASC 842 . Recent Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (subsequent to adoption of ASU 2018-13, Fair Value Measurement). The ASU was issued to eliminate certain disclosure requirements for fair value measurements, and add and modify other disclosure requirements, as part of its disclosure framework project, including additional requirements for public companies to disclose certain information about the significant unobservable inputs for Level 3 fair value measurements. This guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The Company is currently evaluating the impact this guidance will have on its financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Accounting Standards Codification 350-40 to determine which implementation costs to defer and recognize as an asset. For public business entities, the guidance is effective for annual and interim periods beginning after December 15, 2019. The Company is currently evaluating the impact this guidance will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is designed to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. When determining such expected credit losses, the guidance requires companies to apply a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance is effective on a modified retrospective basis for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. C ompanies may adopt the standard as early as annual reporting periods beginning after December 15, 2018 . The Company is currently evaluating the impact this guidance will have on its financial statements and related disclosures. |
Investment | The Company's investments consist of long-term variable rate debt instruments with an auction reset feature, referred to as auction rate securities ("ARS"), classified as available-for-sale and carried at fair value. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of accumulated other comprehensive loss | The components of accumulated other comprehensive loss were as follows (in thousands): March 31, December 31, Foreign currency translation adjustment $ (10,578 ) $ (10,958 ) Net unrealized loss on investments, net of tax (730 ) (730 ) Total accumulated other comprehensive loss $ (11,308 ) $ (11,688 ) |
Calculation of basic and diluted net income (loss) per share | The following table sets forth the calculation of basic and diluted net income per share (in thousands, except per share data): Three Months Ended Numerator: 2019 2018 Net income $ 85,169 $ 52,231 Denominator: Denominator for basic net income per share — weighted-average outstanding shares 36,237 35,893 Effect of dilutive securities: Stock options and restricted stock awards 330 457 Denominator for diluted net income per share — weighted-average outstanding shares 36,567 36,350 Net income per share — basic $ 2.35 $ 1.46 Net income per share — diluted $ 2.33 $ 1.44 |
Schedule of anti-dilutive securities excluded from computation of earnings per share | The following table summarizes the shares underlying the performance-based restricted stock awards excluded from the basic and diluted earnings per share calculations (in thousands): Three Months Ended 2019 2018 Performance-based restricted stock awards 89 84 Diluted net income per share considers the impact of potentially dilutive securities except when the inclusion of the potentially dilutive securities would have an anti-dilutive effect. Stock options to purchase approximately 52,000 and 83,000 shares that were outstanding for the three months ended March 31, 2019 and 2018 , respectively, were not included in the computation of diluted net income per share because the inclusion of the potentially dilutive securities would have an anti-dilutive effect. |
Stock-based compensation expense for stock options and restricted stock | Stock-based compensation expense for stock options and restricted stock awards issued under equity incentive plans and stock purchases under the Employee Stock Purchase Plan included in the Company’s results of operations were as follows (in thousands): Three Months Ended 2019 2018 Cost of revenues $ 2,058 $ 1,431 Selling and marketing (excluding customer base amortization) 1,638 1,835 Software development 2,056 1,729 General and administrative 6,277 5,417 Total stock-based compensation expense $ 12,029 $ 10,412 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company provides information, analytics and online marketplaces to the commercial real estate industry and related professionals. The revenues by operating segment and type of service consist of the following (in thousands): Three Months Ended March 31, 2019 2018 North America International Total North America International Total Information and analytics CoStar Suite $ 140,973 $ 6,728 $ 147,701 $ 123,886 $ 6,475 $ 130,361 Information services 16,591 2,259 18,850 12,612 2,448 15,060 Online marketplaces Multifamily 114,268 — 114,268 87,683 — 87,683 Commercial property and land 47,405 201 47,606 40,614 — 40,614 Total revenues $ 319,237 $ 9,188 $ 328,425 $ 264,795 $ 8,923 $ 273,718 |
Contract with Customer, Asset and Liability | Changes in deferred revenue for the period were as follows (in thousands): Balance at December 31, 2018 $ 51,459 Revenue recognized in the current period from the amounts in the beginning balance (30,015 ) New deferrals, net of amounts recognized in the current period 38,723 Effects of foreign currency 134 Balance at March 31, 2019 (1) $ 60,301 __________________________ (1) Deferred revenue is comprised of $56 million of current liabilities and $4 million of noncurrent liabilities classified within lease and other long-term liabilities on the Company’s condensed consolidated balance sheet as of March 31, 2019 . |
Schedule of Commissions Expense | Commissions expense activity for the three months ended March 31, 2019 and 2018 was as follows (in thousands): Three Months Ended 2019 2018 Commissions incurred $ 18,551 $ 23,595 Commissions capitalized in the current period (13,729 ) (16,263 ) Amortization of deferred commissions costs 12,407 12,006 Total commissions expense $ 17,229 $ 19,338 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the amounts recorded for acquired assets and assumed liabilities recorded at their fair values as of the Acquisition Date (in thousands): Final: February 21, 2018 Cash and cash equivalents $ 59 Accounts receivable 8,769 Indemnification asset 5,443 Goodwill 266,595 Intangible assets 141,300 Deferred tax liabilities (34,032 ) Contingent sales tax liability (6,260 ) State uncertain income tax position liability (2,047 ) Other assets and liabilities (3,535 ) Fair value of identifiable net assets acquired $ 376,292 |
Business Acquisition, Pro Forma Information | The unaudited pro forma financial information was as follows (in thousands, except per share data): Three Months Ended 2018 Revenue $ 287,470 Net income $ 52,839 Net income per share - basic 1.47 Net income per share - diluted 1.45 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Scheduled maturities of investments classified as available-for-sale | Scheduled maturities of investments classified as available-for-sale as of March 31, 2019 are as follows (in thousands): Maturity Fair Value Due: April 1, 2019 — March 31, 2020 $ — April 1, 2020 — March 31, 2024 — April 1, 2024 — March 31, 2029 — After March 31, 2029 10,070 Available-for-sale investments $ 10,070 |
Schedule of available for sale securities reconciliation | As of March 31, 2019 , the amortized cost basis and fair value of investments classified as available-for-sale were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Auction rate securities $ 10,800 $ — $ (730 ) $ 10,070 Available-for-sale investments $ 10,800 $ — $ (730 ) $ 10,070 As of December 31, 2018 , the amortized cost basis and fair value of investments classified as available-for-sale were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Auction rate securities $ 10,800 $ — $ (730 ) $ 10,070 Available-for-sale investments $ 10,800 $ — $ (730 ) $ 10,070 |
Schedule of unrealized loss on investments for twelve months or longer | The components of the Company’s investments in an unrealized loss position for twelve months or longer were as follows (in thousands): March 31, December 31, Aggregate Fair Value Gross Unrealized Losses Aggregate Fair Value Gross Unrealized Losses Auction rate securities $ 10,070 $ (730 ) $ 10,070 $ (730 ) Investments in an unrealized loss position $ 10,070 $ (730 ) $ 10,070 $ (730 ) |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis | The following table represents the Company's fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of March 31, 2019 (in thousands): Level 1 Level 2 Level 3 Total Assets: Money market funds $ 594,036 $ — $ — $ 594,036 Auction rate securities — — 10,070 10,070 Total assets measured at fair value $ 594,036 $ — $ 10,070 $ 604,106 The following table represents the Company's fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of December 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Assets: Money market funds $ 590,567 $ — $ — $ 590,567 Auction rate securities — — 10,070 10,070 Total assets measured at fair value $ 590,567 $ — $ 10,070 $ 600,637 |
Summary of changes in the fair value of the company's level 3 assets | The following table summarizes changes in fair value of the Company’s Level 3 assets from December 31, 2017 to March 31, 2019 (in thousands): Auction Rate Securities Balance at December 31, 2017 $ 10,070 Decrease in unrealized loss included in accumulated other comprehensive loss — Balance at December 31, 2018 10,070 Decrease in unrealized loss included in accumulated other comprehensive loss — Balance at March 31, 2019 $ 10,070 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Components of lease expense | ease costs related to the Company's operating leases included in the condensed consolidated statement of operations were as follows (in thousands): Three Months Ended Operating lease costs: Cost of revenues $ 3,238 Software development 952 Selling and marketing (excluding customer base amortization) 2,191 General and administrative 292 Total operating lease costs $ 6,673 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to operating leases was as follows (in thousands): Balance Balance Sheet Location March 31, 2019 Long-term lease liabilities Lease and other long-term liabilities $ 119,172 Weighted average remaining lease term in years 5.7 Weighted average discount rate 4.2 % |
Schedule of Supplemental Cash Flow Information for Leases | Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 7,716 ROU assets obtained in exchange for lease obligations: Operating leases $ 170 |
Lessee, Operating Lease, Liability, Maturity | Maturities of operating lease liabilities at March 31, 2019 were as follows (in thousands): April 1, 2019 - March 31, 2020 $ 31,652 April 1, 2020 - March 31, 2021 30,116 April 1, 2021 - March 31, 2022 27,193 April 1, 2022 - March 31, 2023 26,377 April 1, 2023 - March 31, 2024 24,421 Thereafter 23,941 Total lease payments 163,700 Less imputed interest (18,466 ) Present value of lease liabilities $ 145,234 Future minimum lease payments as of December 31, 2018 were as follows (in thousands): 2019 $ 30,485 2020 29,255 2021 27,421 2022 25,634 2023 24,515 Thereafter 31,768 Total future minimum lease payments $ 169,078 |
Lessee, Operating Lease Prior to ASC 842 Adoption | Future minimum lease payments as of December 31, 2018 were as follows (in thousands): 2019 $ 30,485 2020 29,255 2021 27,421 2022 25,634 2023 24,515 Thereafter 31,768 Total future minimum lease payments $ 169,078 |
GOODWILL (Tables)
GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill [Abstract] | |
Schedule of goodwill | The changes in the carrying amount of goodwill by operating segment consist of the following (in thousands): North America International Total Goodwill, December 31, 2017 $ 1,253,494 $ 29,963 $ 1,283,457 Acquisitions 319,594 10,344 329,938 Effect of foreign currency translation — (1,860 ) (1,860 ) Goodwill, December 31, 2018 1,573,088 38,447 1,611,535 Effect of foreign currency translation — 530 530 Goodwill, March 31, 2019 $ 1,573,088 $ 38,977 $ 1,612,065 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of acquired finite-lived intangible assets by major class | Intangible assets consist of the following (in thousands, except amortization period data): March 31, December 31, Weighted- Average Amortization Period (in years) Capitalized product development cost $ 2,173 $ 2,173 4 Accumulated amortization (2,173 ) (2,173 ) Capitalized product development cost, net — — Building photography 9,087 9,035 2 Accumulated amortization (8,949 ) (8,809 ) Building photography, net 138 226 Acquired technology 101,887 103,128 5 Accumulated amortization (85,963 ) (85,344 ) Acquired technology, net 15,924 17,784 Acquired customer base 339,685 339,574 10 Accumulated amortization (207,199 ) (199,405 ) Acquired customer base, net 132,486 140,169 Acquired trade names and other intangible assets 190,614 190,717 12 Accumulated amortization (63,412 ) (59,985 ) Acquired trade names and other intangible assets, net 127,202 130,732 Intangible assets, net $ 275,750 $ 288,911 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Summarized information by operating segment | Summarized information by operating segment consists of the following (in thousands): Three Months Ended 2019 2018 EBITDA North America $ 115,268 $ 71,055 International (2,117 ) (627 ) Total EBITDA $ 113,151 $ 70,428 |
Reconciliation of net income to EBITDA | The reconciliation of net income to EBITDA consists of the following (in thousands): Three Months Ended 2019 2018 Net income $ 85,169 $ 52,231 Amortization of acquired intangible assets in cost of revenues 5,513 4,608 Amortization of acquired intangible assets in operating expenses 7,682 5,803 Depreciation and other amortization 6,464 6,572 Interest and other income (4,945 ) (2,987 ) Interest and other expense 732 690 Income tax expense 12,536 3,511 EBITDA $ 113,151 $ 70,428 |
Summarized information by operating segment, assets and liabilities | Summarized information by operating segment consists of the following (in thousands): March 31, December 31, Property and equipment, net North America $ 81,867 $ 79,493 International 4,111 3,810 Total property and equipment, net $ 85,978 $ 83,303 Goodwill North America $ 1,573,088 $ 1,573,088 International 38,977 38,447 Total goodwill $ 1,612,065 $ 1,611,535 Assets North America $ 3,475,272 $ 3,253,035 International 73,012 59,922 Total assets $ 3,548,284 $ 3,312,957 Liabilities North America $ 386,122 $ 272,776 International 33,548 18,239 Total liabilities $ 419,670 $ 291,015 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 3 Months Ended |
Mar. 31, 2019operating_segments | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
Term of subscription-based license agreements (in years) | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , REVENUE RECOGNITION AND ADVERTISING COSTS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Term of subscription-based license agreements (in years) | 1 year | |
Advertising expense | $ 33 | $ 23 |
Deferred sales commission, amortization period | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , FOREIGN CURRENCY AND ACCUMULATED OTHER COMPREHENSIVE LOSS, NET OF TAX (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Material gains or losses from foreign currency transactions | $ 0 | $ 0 | |
Accumulated Other Comprehensive Loss Net of Tax [Abstract] | |||
Foreign currency translation adjustment | (10,578,000) | $ (10,958,000) | |
Accumulated net unrealized loss on investments, net of tax | (730,000) | (730,000) | |
Total accumulated other comprehensive loss | (11,308,000) | $ (11,688,000) | |
Reclassification out of accumulated other comprehensive loss | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income | $ 85,169 | $ 52,231 |
Denominator: | ||
Denominator for basic net income per share - weighted-average outstanding shares (in shares) | 36,237 | 35,893 |
Effect of dilutive securities: | ||
Stock options and restricted stock awards | 330 | 457 |
Denominator for diluted net income per share — weighted average outstanding shares (in shares) | 36,567 | 36,350 |
Net income per share - basic (in dollars per share) | $ 2.35 | $ 1.46 |
Net income per share - diluted (in dollars per share) | $ 2.33 | $ 1.44 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 89 | 84 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 52 | 83 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , STOCK BASED COMPENSATION EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock-Based Compensation Expense [Abstract] | ||
Compensation expense | $ 12,029 | $ 10,412 |
Cost of Revenues [Member] | ||
Stock-Based Compensation Expense [Abstract] | ||
Compensation expense | 2,058 | 1,431 |
Selling and Marketing (excluding customer base amortization) [Member] | ||
Stock-Based Compensation Expense [Abstract] | ||
Compensation expense | 1,638 | 1,835 |
Software Development [Member] | ||
Stock-Based Compensation Expense [Abstract] | ||
Compensation expense | 2,056 | 1,729 |
General and Administrative [Member] | ||
Stock-Based Compensation Expense [Abstract] | ||
Compensation expense | $ 6,277 | $ 5,417 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , DEBT ISSUANCE COSTS (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Deferred Finance Costs, Own-share Lending Arrangement, Issuance Costs, Net [Abstract] | |
Capitalized debt issuance costs | $ 3 |
Amortization of debt issuance costs | $ 0.2 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , RECENT ACCOUNTING PRONOUCEMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease right-of-use assets | $ 112,042 | $ 0 | ||
Lease liability | $ 145,234 | |||
Cumulative effect of adoption of new accounting standard, net of tax | $ 12,057 | $ 54,464 | ||
Accounting Standards Update 2016-02 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease right-of-use assets | 116,000 | |||
Lease liability | 150,000 | |||
Cumulative effect of adoption of new accounting standard, net of tax | $ 12,000 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS , DISAGGREGATED REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 328,425 | $ 273,718 |
Information And Analytics [Member] | CoStar Suite [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 147,701 | 130,361 |
Information And Analytics [Member] | Information services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 18,850 | 15,060 |
Online Marketplaces [Member] | Multifamily Online Marketplace [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 114,268 | 87,683 |
Online Marketplaces [Member] | Commercial property and land [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 47,606 | 40,614 |
North America [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 319,237 | 264,795 |
North America [Member] | Information And Analytics [Member] | CoStar Suite [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 140,973 | 123,886 |
North America [Member] | Information And Analytics [Member] | Information services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 16,591 | 12,612 |
North America [Member] | Online Marketplaces [Member] | Multifamily Online Marketplace [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 114,268 | 87,683 |
North America [Member] | Online Marketplaces [Member] | Commercial property and land [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 47,405 | 40,614 |
International [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 9,188 | 8,923 |
International [Member] | Information And Analytics [Member] | CoStar Suite [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 6,728 | 6,475 |
International [Member] | Information And Analytics [Member] | Information services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,259 | 2,448 |
International [Member] | Online Marketplaces [Member] | Multifamily Online Marketplace [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 0 | 0 |
International [Member] | Online Marketplaces [Member] | Commercial property and land [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 201 | $ 0 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS , CONTRACT ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 51,459 | |
Revenue recognized in the current period from the amounts in the beginning balance | (30,015) | |
New deferrals, net of amounts recognized in the current period | 38,723 | |
Effects of foreign currency | 134 | |
Ending balance | 60,301 | |
Current liability | 56,155 | $ 51,459 |
Noncurrent liability | $ 4,000 |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS , CONTRACT ASSETS (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, asset, gross | $ 2 | $ 2 |
Revenue, remaining performance obligation | $ 206 |
REVENUE FROM CONTRACTS WITH C_6
REVENUE FROM CONTRACTS WITH CUSTOMERS , COMMISSIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Commissions | $ 17,229 | $ 19,338 |
Amortization of deferred commissions costs | 12,407 | 12,006 |
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Commissions | 18,551 | 23,595 |
Amortization of deferred commissions costs | 12,407 | 12,006 |
Restatement Adjustment [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Commissions | $ (13,729) | $ (16,263) |
REVENUE FROM CONTRACTS WITH C_7
REVENUE FROM CONTRACTS WITH CUSTOMERS , PERFORMANCE OBLIGATIONS (Details) $ in Millions | Mar. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 206 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 5 years |
ACQUISITIONS (Details)
ACQUISITIONS (Details) £ in Millions | Nov. 08, 2018USD ($) | Oct. 12, 2018GBP (£) | Oct. 12, 2018USD ($) | Feb. 21, 2018USD ($)shares | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 01, 2015USD ($) |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 1,612,065,000 | $ 1,611,535,000 | $ 1,283,457,000 | ||||||
Cash paid for acquisitions, net of cash acquired | 0 | $ 340,074,000 | |||||||
Acquisitions | $ 329,938,000 | ||||||||
ForRent, Division Of DE Holdings, Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Aggregate purchase price | $ 376,000,000 | ||||||||
Cash payment | $ 340,000,000 | ||||||||
Investment owned (shares) | shares | 103,280 | ||||||||
Purchase price, shares issued | $ 36,000,000 | ||||||||
Goodwill | 266,595,000 | $ 267,000,000 | |||||||
Goodwill, expected tax deductible amount | $ 8,000,000 | ||||||||
Indemnification asset | 6,260,000 | ||||||||
State uncertain income tax position liability | 2,047,000 | ||||||||
Indemnification asset | 5,443,000 | ||||||||
Indemnification asset | 1,000,000 | ||||||||
Transaction costs | 3,000,000 | ||||||||
Realla Ltd [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid for acquisitions, net of cash acquired | £ 12 | $ 15,000,000 | |||||||
Initial payments to acquire businesses, net of cash acquired | 10 | 13,000,000 | |||||||
Acquisitions | 8 | 10,000,000 | |||||||
Finite-lived intangible assets acquired | £ 4 | $ 5,000,000 | |||||||
Cozy Services Ltd [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid for acquisitions, net of cash acquired | $ 65,000,000 | ||||||||
Acquisitions | 53,000,000 | ||||||||
Finite-lived intangible assets acquired | $ 11,000,000 | ||||||||
Customer Relationships [Member] | ForRent, Division Of DE Holdings, Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted-average amortization period | 10 years | ||||||||
Database Rights [Member] | ForRent, Division Of DE Holdings, Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted-average amortization period | 3 years | ||||||||
Acquired trade names and other intangible assets [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted-average amortization period | 12 years | ||||||||
Acquired trade names and other intangible assets [Member] | ForRent, Division Of DE Holdings, Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted-average amortization period | 10 years | ||||||||
Acquired building photography [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted-average amortization period | 2 years | ||||||||
Acquired building photography [Member] | ForRent, Division Of DE Holdings, Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted-average amortization period | 1 year | ||||||||
Maximum [Member] | ForRent, Division Of DE Holdings, Inc. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
State uncertain income tax position liability | $ 2,000,000 | ||||||||
Employee retention bonus | $ 11,627,000 |
ACQUISITIONS , SCHEDULE OF IDEN
ACQUISITIONS , SCHEDULE OF IDENTIFIED ASSETS AND LIABILITIES ASSUMED (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Feb. 21, 2018 | Dec. 31, 2017 | Jun. 01, 2015 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,612,065 | $ 1,611,535 | $ 1,283,457 | ||
ForRent, Division Of DE Holdings, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 59 | ||||
Accounts receivable | 8,769 | ||||
Indemnification asset | 5,443 | ||||
Goodwill | 266,595 | $ 267,000 | |||
Intangible assets | 141,300 | ||||
Deferred tax liabilities | (34,032) | ||||
Contingent sales tax liability | (6,260) | ||||
State uncertain income tax position liability | (2,047) | ||||
Other assets and liabilities | (3,535) | ||||
Fair value of identifiable net assets acquired | $ 376,292 |
ACQUISITIONS , SCHEDULE OF PRO
ACQUISITIONS , SCHEDULE OF PRO FORMA INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | ||
Revenue | $ 287,470 | |
Net income | $ 52,839 | |
Net income per share - basic (usd per share) | $ 1.47 | |
Net income per share - diluted (usd per share) | $ 1.45 | |
Revenue since acquisition | $ 8,000 |
INVESTMENTS, SCHEDULED MATURITI
INVESTMENTS, SCHEDULED MATURITIES AND REALIZED GAINS AND LOSSES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Maturities Fair Value [Abstract] | ||
April 1, 2019 — March 31, 2020 | $ 0 | |
April 1, 2020 — March 31, 2024 | 0 | |
April 1, 2024 — March 31, 2029 | 0 | |
After March 31, 2029 | 10,070,000 | |
Available-for-sale investments | 10,070,000 | |
Available-for-sale securities, gross realized gains | 0 | $ 0 |
Available-for-sale securities, gross realized losses | $ 0 | $ 0 |
INVESTMENTS, AVAILABLE-FOR-SALE
INVESTMENTS, AVAILABLE-FOR-SALE SECURITIES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Available-for-sale Securities Reconciliation [Abstract] | |||
Amortized cost | $ 10,800,000 | $ 10,800,000 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (730,000) | (730,000) | |
Fair value | 10,070,000 | 10,070,000 | |
Available-For-Sale Securities, Unrealized Loss Positions [Abstract] | |||
Continuous unrealized loss position, 12 months or more, aggregated fair value | 10,070,000 | 10,070,000 | |
Continuous unrealized loss position, 12 months or more, gross unrealized losses | (730,000) | (730,000) | |
Continuous unrealized loss position, 12 months or less, gross unrealized losses | 0 | $ 0 | |
Auction Rate Securities [Member] | |||
Available-for-sale Securities Reconciliation [Abstract] | |||
Amortized cost | 10,800,000 | 10,800,000 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (730,000) | (730,000) | |
Fair value | 10,070,000 | 10,070,000 | |
Available-For-Sale Securities, Unrealized Loss Positions [Abstract] | |||
Continuous unrealized loss position, 12 months or more, aggregated fair value | 10,070,000 | 10,070,000 | |
Continuous unrealized loss position, 12 months or more, gross unrealized losses | $ (730,000) | $ (730,000) |
FAIR VALUE (Details)
FAIR VALUE (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Assets: | ||
Total assets measured at fair value | $ 604,106,000 | $ 600,637,000 |
Unobservable inputs assets (level 3) [Roll forward] | ||
Temporary impairment of the auction rates security investments, net of unrealized gain | (730,000) | (730,000) |
Money Market Funds [Member] | ||
Assets: | ||
Total assets measured at fair value | 594,036,000 | 590,567,000 |
Auction Rate Securities [Member] | ||
Assets: | ||
Total assets measured at fair value | 10,070,000 | 10,070,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Total assets measured at fair value | 594,036,000 | 590,567,000 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Assets: | ||
Total assets measured at fair value | 594,036,000 | 590,567,000 |
Fair Value, Inputs, Level 1 [Member] | Auction Rate Securities [Member] | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Auction Rate Securities [Member] | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Total assets measured at fair value | 10,070,000 | 10,070,000 |
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Auction Rate Securities [Member] | ||
Assets: | ||
Total assets measured at fair value | 10,070,000 | 10,070,000 |
Auction Rate Securities [Member] | ||
Unobservable inputs assets (level 3) [Roll forward] | ||
Beginning balance | 10,070,000 | 10,070,000 |
Change in unrealized gain (loss) included in accumulated other comprehensive loss | 0 | 0 |
Ending balance | $ 10,070,000 | $ 10,070,000 |
Auction rate securities variable rate debt instruments interest rate reset period | 28 days | |
The minimum contractual maturities on underlying securities involved in auction rate securities | 20 years | |
Par value of company held auction rate securities | $ 11,000,000 | |
Temporary impairment of the auction rates security investments, net of unrealized gain | $ 0 | |
Weighted Average | Measurement Input, Discount Rate | ||
Unobservable inputs assets (level 3) [Roll forward] | ||
Discount rate | 0.06 | 0.06 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 1 year |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 10 years |
Office Facilities [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating lease cost | $ 6,673 |
LEASES (Lease Cost) (Details)
LEASES (Lease Cost) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cost of Revenues [Member] | |
Lessee, Lease, Description [Line Items] | |
Total operating lease costs | $ 3,238 |
Software Development [Member] | |
Lessee, Lease, Description [Line Items] | |
Total operating lease costs | 952 |
Selling and Marketing [Member] | |
Lessee, Lease, Description [Line Items] | |
Total operating lease costs | 2,191 |
General and Administrative [Member] | |
Lessee, Lease, Description [Line Items] | |
Total operating lease costs | $ 292 |
LEASES (Supplemental Balance Sh
LEASES (Supplemental Balance Sheet Information Related to Leases) (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating leases | |
Long-term lease liabilities | $ 119,172 |
Weighted average remaining lease term in years | 5 years 8 months 12 days |
Weighted average discount rate | 4.20% |
LEASES (Supplemental Cash Flow
LEASES (Supplemental Cash Flow Information Related to Leases) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows used in operating leases | $ 7,716 |
ROU assets obtained in exchange for lease obligations: | |
Operating leases | $ 170 |
LEASES (Maturities of Operating
LEASES (Maturities of Operating Lease Liabilities) (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
April 1, 2019 - March 31, 2020 | $ 31,652 |
April 1, 2020 - March 31, 2021 | 30,116 |
April 1, 2021 - March 31, 2022 | 27,193 |
April 1, 2022 - March 31, 2023 | 26,377 |
April 1, 2023 - March 31, 2024 | 24,421 |
Thereafter | 23,941 |
Total future minimum lease payments | 163,700 |
Less imputed interest | (18,466) |
Present value of lease liabilities | $ 145,234 |
LEASES (Lessee, Operating Lease
LEASES (Lessee, Operating Lease Prior to ASC 842 Adoption) (Details) - Office Facilities [Member] $ in Thousands | Dec. 31, 2018USD ($) |
Lessee, Lease, Description [Line Items] | |
2019 | $ 30,485 |
2020 | 29,255 |
2021 | 27,421 |
2022 | 25,634 |
2023 | 24,515 |
Thereafter | 31,768 |
Total future minimum lease payments | $ 169,078 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 1,611,535 | $ 1,283,457 |
Acquisitions | 329,938 | |
Effect of foreign currency translation | 530 | (1,860) |
Goodwill, ending balance | 1,612,065 | 1,611,535 |
North America [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 1,573,088 | 1,253,494 |
Acquisitions | 319,594 | |
Effect of foreign currency translation | 0 | 0 |
Goodwill, ending balance | 1,573,088 | 1,573,088 |
International [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 38,447 | 29,963 |
Acquisitions | 10,344 | |
Effect of foreign currency translation | 530 | (1,860) |
Goodwill, ending balance | $ 38,977 | $ 38,447 |
GOODWILL (Narrative) (Details)
GOODWILL (Narrative) (Details) $ in Thousands, £ in Millions | Nov. 08, 2018USD ($) | Oct. 12, 2018GBP (£) | Oct. 12, 2018USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Feb. 21, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 01, 2015USD ($) |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 1,611,535 | $ 1,612,065 | $ 1,283,457 | |||||
Acquisitions | $ 329,938 | |||||||
ForRent, Division Of DE Holdings, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 266,595 | $ 267,000 | ||||||
Realla Ltd [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions | £ 8 | $ 10,000 | ||||||
Cozy Services Ltd [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions | $ 53,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | $ 275,750 | $ 288,911 |
Capitalized Product Development Costs [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 2,173 | 2,173 |
Finite-lived intangible assets, accumulated amortization | (2,173) | (2,173) |
Finite-lived intangible assets, net | $ 0 | 0 |
Weighted-average amortization period | 4 years | |
Acquired building photography [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 9,087 | 9,035 |
Finite-lived intangible assets, accumulated amortization | (8,949) | (8,809) |
Finite-lived intangible assets, net | $ 138 | 226 |
Weighted-average amortization period | 2 years | |
Acquired database technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 101,887 | 103,128 |
Finite-lived intangible assets, accumulated amortization | (85,963) | (85,344) |
Finite-lived intangible assets, net | $ 15,924 | 17,784 |
Weighted-average amortization period | 5 years | |
Acquired Customer Base [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 339,685 | 339,574 |
Finite-lived intangible assets, accumulated amortization | (207,199) | (199,405) |
Finite-lived intangible assets, net | $ 132,486 | 140,169 |
Weighted-average amortization period | 10 years | |
Acquired trade names and other intangible assets [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 190,614 | 190,717 |
Finite-lived intangible assets, accumulated amortization | (63,412) | (59,985) |
Finite-lived intangible assets, net | $ 127,202 | $ 130,732 |
Weighted-average amortization period | 12 years |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | Oct. 19, 2017USD ($) | Apr. 02, 2014 | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||||
Debt outstanding | $ 0 | |||
Interest expense, debt | $ 700,000 | |||
Amortization of debt issuance costs | 200,000 | |||
Commitment fee | 500,000 | |||
Capitalized debt issuance costs | 3,000,000 | |||
Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt outstanding | $ 200,000 | $ 0 | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Term of loan | 5 years | |||
Revolving Credit Facility [Member] | 2017 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 750,000,000 | |||
Term of loan | 5 years | |||
Covenant compliance, secured leverage ratio | 3.50 | |||
Covenant compliance, total leverage ratio | 4.50 | |||
Letter of Credit [Member] | 2017 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 20,000,000 | |||
Interest rate, increase (decrease) | 2.00% | |||
Letter of Credit [Member] | 2017 Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on federal funds rate (in percent) | 1.00% | |||
Letter of Credit [Member] | 2017 Credit Agreement [Member] | Federal Funds Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on federal funds rate (in percent) | 0.50% | |||
Initial Basis Spread [Member] | Letter of Credit [Member] | 2017 Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on federal funds rate (in percent) | 1.25% | |||
Initial Basis Spread One Month LIBOR [Member] | Letter of Credit [Member] | 2017 Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on federal funds rate (in percent) | 0.25% |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (in percent) | 13.00% | 6.00% |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)operating_segments | Mar. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of business segments | operating_segments | 2 | |
Reconciliation of EBITDA to net income (loss) [Abstract] | ||
Net income | $ 85,169 | $ 52,231 |
Amortization of acquired intangible assets in cost of revenues | 5,513 | 4,608 |
Amortization of acquired intangible assets in operating expenses | 7,682 | 5,803 |
Depreciation and other amortization | 6,464 | 6,572 |
Interest and other income | (4,945) | (2,987) |
Interest and other expense | 732 | 690 |
Income tax expense | 12,536 | 3,511 |
EBITDA | 113,151 | 70,428 |
North America [Member] | ||
Reconciliation of EBITDA to net income (loss) [Abstract] | ||
EBITDA | 115,268 | 71,055 |
International [Member] | ||
Reconciliation of EBITDA to net income (loss) [Abstract] | ||
EBITDA | $ (2,117) | $ (627) |
SEGMENT REPORTING, ASSETS AND L
SEGMENT REPORTING, ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | |||
Property and equipment, net | $ 85,978 | $ 83,303 | |
Goodwill | 1,612,065 | 1,611,535 | $ 1,283,457 |
Reconciliation of operating segment assets to total assets [Abstract] | |||
Total assets | 3,548,284 | 3,312,957 | |
Reconciliation of operating segment liabilities to total liabilities [Abstract] | |||
Total liabilities | 419,670 | 291,015 | |
North America [Member] | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 81,867 | 79,493 | |
Goodwill | 1,573,088 | 1,573,088 | 1,253,494 |
Reconciliation of operating segment assets to total assets [Abstract] | |||
Total assets | 3,475,272 | 3,253,035 | |
Reconciliation of operating segment liabilities to total liabilities [Abstract] | |||
Total liabilities | 386,122 | 272,776 | |
International [Member] | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 4,111 | 3,810 | |
Goodwill | 38,977 | 38,447 | $ 29,963 |
Reconciliation of operating segment assets to total assets [Abstract] | |||
Total assets | 73,012 | 59,922 | |
Reconciliation of operating segment liabilities to total liabilities [Abstract] | |||
Total liabilities | $ 33,548 | $ 18,239 |
Uncategorized Items - csgp-2019
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 54,464,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 12,057,000 |