Cover page
Cover page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 0-24531 | ||
Entity Registrant Name | CoStar Group, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 52-2091509 | ||
Entity Address, Address Line One | 1331 L Street, NW | ||
Entity Address, City or Town | Washington, | ||
Entity Address, State or Province | DC | ||
Entity Address, Postal Zip Code | 20005 | ||
City Area Code | 202) | ||
Local Phone Number | 346-6500 | ||
Title of 12(b) Security | Common Stock ($0.01 par value) | ||
Trading Symbol | CSGP | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Small Business Entity | false | ||
Emerging Growth | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Public Float | $ 23.7 | ||
Entity Common Stock, Shares Outstanding | 406,772,431 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement, which is expected to be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2022 are incorporated by reference into Part III of this Report. | ||
Entity Central Index Key | 0001057352 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Tysons, Virginia |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | ||
Income Statement [Abstract] | ||||
Revenues | $ 2,182,399 | $ 1,944,135 | $ 1,659,019 | |
Cost of revenues | 414,008 | 357,241 | 308,968 | |
Gross profit | 1,768,391 | 1,586,894 | 1,350,051 | |
Operating expenses: | ||||
Selling and marketing (excluding customer base amortization) | 684,222 | 622,007 | 535,778 | |
Software development | 220,923 | 201,022 | 162,916 | |
General and administrative | 338,737 | 256,711 | 299,698 | |
Customer base amortization | 73,560 | 74,817 | 62,457 | |
Total operating expenses | 1,317,442 | 1,154,557 | 1,060,849 | |
Income from operations | 450,949 | 432,337 | 289,202 | |
Interest income (expense), net | 32,125 | (31,621) | (17,395) | |
Other income (expense), net | 3,383 | 3,252 | (827) | |
Income before income taxes | 486,457 | 403,968 | 270,980 | |
Income tax expense | 117,004 | 111,404 | 43,852 | |
Net income | $ 369,453 | $ 292,564 | $ 227,128 | |
Net income per share — basic (in dollars per share) | $ / shares | [1] | $ 0.93 | $ 0.75 | $ 0.60 |
Net income per share — diluted (in dollars per share) | $ / shares | [1] | $ 0.93 | $ 0.74 | $ 0.59 |
Weighted average outstanding shares — basic (in shares) | shares | [1] | 396,284 | 392,210 | 380,726 |
Weighted average outstanding shares — diluted (in shares) | shares | [1] | 397,752 | 394,160 | 383,266 |
[1]Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 369,453 | $ 292,564 | $ 227,128 |
Other comprehensive (loss) income, net of tax | |||
Foreign currency translation adjustment | (23,317) | (4,869) | 6,966 |
Unrealized gain on investments | 0 | 0 | 189 |
Reclassification adjustment for realized loss on investments included in net income | 0 | 0 | 541 |
Total other comprehensive (loss) income, net of tax | (23,317) | (4,869) | 7,696 |
Total comprehensive income | $ 346,136 | $ 287,695 | $ 234,824 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Current assets: | ||
Cash and cash equivalents | $ 4,967,970 | $ 3,827,126 |
Accounts receivable | 166,140 | 138,191 |
Less: Allowance for credit losses | (12,195) | (13,374) |
Accounts receivable, net | 153,945 | 124,817 |
Prepaid expenses and other current assets | 63,952 | 36,182 |
Total current assets | 5,185,867 | 3,988,125 |
Deferred income taxes, net | 9,722 | 5,034 |
Lease right-of-use assets | 80,392 | 100,680 |
Property and equipment, net | 321,250 | 271,431 |
Goodwill | 2,314,759 | 2,321,015 |
Intangible assets, net | 329,306 | 435,662 |
Deferred commission costs, net | 142,482 | 101,879 |
Deposits and other assets | 16,687 | 21,762 |
Income tax receivable | 2,005 | 11,283 |
Total assets | 8,402,470 | 7,256,871 |
Current liabilities: | ||
Accounts payable | 28,460 | 22,244 |
Accrued wages and commissions | 104,988 | 81,794 |
Accrued expenses | 89,113 | 81,676 |
Income taxes payable | 10,438 | 31,236 |
Lease liabilities | 36,049 | 26,268 |
Deferred revenue | 103,567 | 95,471 |
Total current liabilities | 372,615 | 338,689 |
Long-term debt, net | 989,210 | 987,944 |
Deferred income taxes, net | 76,202 | 98,656 |
Income taxes payable | 14,001 | 12,496 |
Lease and other long-term liabilities | 80,321 | 107,414 |
Total liabilities | 1,532,349 | 1,545,199 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value; 2 million shares authorized; zero outstanding | 0 | 0 |
Common stock, $0.01 par value; 1.2 billion shares authorized; 394,936 and 394,285 issued and outstanding as of December 31, 2021 and 2020, respectively | 4,066 | 3,946 |
Additional paid-in capital | 5,065,511 | 4,253,318 |
Accumulated other comprehensive loss | (29,075) | (5,758) |
Retained earnings | 1,829,619 | 1,460,166 |
Total stockholders’ equity | 6,870,121 | 5,711,672 |
Total liabilities and stockholders’ equity | $ 8,402,470 | $ 7,256,871 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,200,000,000 | 1,200,000,000 |
Common stock, shares issued, (in shares) | 394,936,000 | |
Common stock, shares outstanding (in shares) | 394,936,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | ||||
Beginning Balance (in shares) at Dec. 31, 2019 | [1] | 366,806,000 | |||||||
Beginning Balance at Dec. 31, 2019 | $ 3,405,593 | $ 3,668 | [1] | $ 2,470,036 | [1] | $ (8,585) | $ 940,474 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 227,128 | 227,128 | |||||||
Other comprehensive income (loss) | 7,696 | 7,696 | |||||||
Exercise of stock options (in shares) | [1] | 953,000 | |||||||
Exercise of stock options | 21,871 | $ 10 | [1] | 21,861 | [1] | ||||
Restricted stock issued (in shares) | [1] | 1,012,000 | |||||||
Restricted stock issued | 0 | $ 10 | [1] | (10) | [1] | ||||
Restricted stock grants surrendered (in shares) | [1] | (952,000) | |||||||
Restricted stock grants surrendered | (38,866) | $ (9) | [1] | (38,857) | [1] | ||||
Stock-based compensation expense | 52,624 | 52,624 | [1] | ||||||
Employee stock purchase plan (in shares) | [1] | 130,000 | |||||||
Employee stock purchase plan | 9,343 | $ 1 | [1] | 9,342 | [1] | ||||
Stock issued for equity offerings, net of transaction costs (in shares) | [1] | (26,336,000) | |||||||
Stock issued for equity offerings, net of transaction costs | 1,689,970 | $ 263 | [1] | 1,689,707 | [1] | ||||
Ending Balance (in shares) at Dec. 31, 2020 | [1] | 394,285,000 | |||||||
Ending Balance at Dec. 31, 2020 | 5,375,359 | $ 3,943 | [1] | 4,204,703 | [1] | (889) | 1,167,602 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 292,564 | 292,564 | |||||||
Other comprehensive income (loss) | (4,869) | (4,869) | |||||||
Exercise of stock options (in shares) | [1] | 206,000 | |||||||
Exercise of stock options | 6,341 | $ 2 | [1] | 6,339 | [1] | ||||
Restricted stock issued (in shares) | [1] | 862,000 | |||||||
Restricted stock issued | 1 | $ 8 | [1] | (7) | [1] | ||||
Restricted stock grants surrendered (in shares) | [1] | (569,000) | |||||||
Restricted stock grants surrendered | (33,314) | $ (7) | [1] | (33,307) | [1] | ||||
Stock-based compensation expense | $ 62,585 | [1] | 62,585 | ||||||
Employee stock purchase plan (in shares) | 152,047 | 152,000 | [1] | ||||||
Employee stock purchase plan | $ 13,005 | $ 0 | [1] | 13,005 | [1] | ||||
Ending Balance (in shares) at Dec. 31, 2021 | [1] | 394,936,000 | |||||||
Ending Balance at Dec. 31, 2021 | 5,711,672 | $ 3,946 | [1] | 4,253,318 | [1] | (5,758) | 1,460,166 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 369,453 | 369,453 | |||||||
Other comprehensive income (loss) | (23,317) | (23,317) | |||||||
Restricted stock issued (in shares) | [1] | 1,512,000 | |||||||
Restricted stock issued | 0 | $ 16 | [1] | (16) | [1] | ||||
Restricted stock grants surrendered (in shares) | [1] | (657,000) | |||||||
Restricted stock grants surrendered | (23,108) | $ (7) | [1] | (23,101) | [1] | ||||
Stock-based compensation expense | $ 74,677 | 74,677 | [1] | ||||||
Employee stock purchase plan (in shares) | 223,596 | 224,000 | [1] | ||||||
Employee stock purchase plan | $ 15,044 | $ (4) | [1] | 15,040 | [1] | ||||
Stock issued for equity offerings, net of transaction costs (in shares) | [1] | (10,656,000) | |||||||
Stock issued for equity offerings, net of transaction costs | $ 745,700 | $ (107) | [1] | 745,593 | [1] | ||||
Ending Balance (in shares) at Dec. 31, 2022 | [1] | 406,671,000 | |||||||
Ending Balance at Dec. 31, 2022 | $ 6,870,121 | $ 4,066 | [1] | $ 5,065,511 | [1] | $ (29,075) | $ 1,829,619 | ||
[1]Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) | Jun. 07, 2021 |
Statement of Stockholders' Equity [Abstract] | |
Conversion ratio | 10 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net income | $ 369,453 | $ 292,564 | $ 227,128 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 137,885 | 139,558 | 116,944 |
Amortization of deferred commissions costs | 76,082 | 63,391 | 60,516 |
Amortization of Senior Notes discount and issuance costs | 2,365 | 2,327 | 1,658 |
Non-cash lease expense | 38,489 | 28,485 | 26,326 |
Stock-based compensation expense | 75,207 | 63,709 | 53,450 |
Deferred income taxes, net | (31,203) | 24,165 | (11,530) |
Credit loss expense | 18,309 | 10,928 | 25,212 |
Other operating activities, net | (2,439) | (654) | 288 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | (46,403) | (29,630) | (36,118) |
Prepaid expenses and other current assets | (17,910) | (14,873) | 1,936 |
Deferred commissions | (116,796) | (72,038) | (64,355) |
Accounts payable and other liabilities | 23,234 | (30,051) | 100,846 |
Lease liabilities | (37,396) | (30,904) | (30,497) |
Income taxes payable | (19,259) | 5,860 | 10,352 |
Deferred revenue | 6,785 | 17,396 | 2,188 |
Other assets | 2,217 | (502) | 1,762 |
Net cash provided by operating activities | 478,620 | 469,731 | 486,106 |
Investing activities: | |||
Proceeds from sale and settlement of investments | 864 | 0 | 10,259 |
Proceeds from sale of property and equipment and other assets | 30,097 | 612 | 0 |
Purchase of Richmond assets | (35,169) | (123,764) | 0 |
Purchases of property and equipment and other assets | (58,574) | (65,220) | (48,347) |
Cash paid for acquisitions, net of cash acquired | (6,273) | (192,971) | (426,075) |
Net cash used in investing activities | (69,055) | (381,343) | (464,163) |
Financing activities: | |||
Proceeds from long-term debt | 0 | 0 | 1,744,210 |
Payments of long-term debt | (2,155) | 0 | (745,000) |
Payments of debt issuance costs | 0 | 0 | (16,647) |
Repurchase of restricted stock to satisfy tax withholding obligations | (23,108) | (33,314) | (38,867) |
Proceeds from equity offering, net of transaction costs | 745,700 | 0 | 1,689,971 |
Proceeds from exercise of stock options and employee stock purchase plan | 13,540 | 18,046 | 30,280 |
Other financing activities | 0 | (411) | (1,650) |
Net cash provided by (used in) financing activities | 733,977 | (15,679) | 2,662,297 |
Effect of foreign currency exchange rates on cash and cash equivalents | (2,698) | (1,495) | 941 |
Net increase in cash and cash equivalents | 1,140,844 | 71,214 | 2,685,181 |
Cash and cash equivalents at beginning of year | 3,827,126 | 3,755,912 | 1,070,731 |
Cash and cash equivalents at end of year | 4,967,970 | 3,827,126 | 3,755,912 |
Supplemental cash flow disclosures: | |||
Interest paid | 29,947 | 31,510 | 5,948 |
Income taxes paid | 169,176 | 82,117 | 45,783 |
Supplemental non-cash investing and financing activities: | |||
Consideration owed for acquisitions | 0 | 60 | 793 |
Accrued capital expenditures and non-cash landlord incentives | $ 14,739 | $ 2,117 | $ 2,364 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION CoStar Group (the “Company”) provides information, analytics, online marketplaces and auction services to the commercial real estate and related business community through its comprehensive, proprietary database of commercial real estate information and related tools. The Company provides online marketplaces for commercial real estate, apartment rentals, residential real estate, land for sale and businesses for sale, and its services are typically distributed to its clients under subscription-based agreements that typically renew automatically, a majority of which have a term of at least one year. The Company operates within two operating segments, North America, which includes the U.S. and Canada, and International, which primarily includes Europe, Asia-Pacific and Latin America. The Company acquired Homes.com, BureauxLocaux and Business Immo in May 2021, October 2021 and April 2022, respectively. See Note 5 for further discussion of these acquisitions. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The 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 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 credit losses, the useful lives and recoverability of long-lived and intangible assets, goodwill, income taxes, 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, real estate agents and brokers and landlords, in each case, typically through a fixed monthly fee for its subscription-based services. Other subscription-based services include (i) real estate and lease management solutions to commercial customers, real estate investors and lenders, (ii) access to applications to manage workflow and advertising and marketing services for residential real estate agents through our acquisitions of Homes.com and Homesnap, (iii) benchmarking and analytics for the hospitality industry and (iv) market research, portfolio and debt analysis, management and reporting capabilities. Subscription contract rates are generally based on the number of sites, number of users, organization size, the client’s business focus, geography, the number of properties reported on or analyzed, 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 typically renew automatically, and a majority have a term of at least one year. Revenue from our subscription-based contracts was approximately 93%, 93% and 95% of total revenue for the years ended December 31, 2022, 2021 and 2020, respectively. The Company also derives revenues from transaction-based services including: (i) an online auction platform for commercial real estate through Ten-X, (ii) providing online tenant applications, including background and credit checks, and rental payment processing and (iii) ancillary products and services that sold on an ad hoc basis. 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 obligations. 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. Revenues from transaction-based services are recognized when the promised product or services are delivered, which, in the case of Ten-X auctions, is at the time of a successful closing for the sale of the property. In limited circumstances, the Company's contracts with customers include promises to transfer multiple services, such as contracts for its subscription-based services and professional services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct, which involves the determination of the standalone selling price for each distinct performance obligation. Deferred revenue results from amounts billed in advance to customers or cash received from customers in advance of the Company's fulfillment of its performance obligation(s) and is recognized as those obligations are satisfied. 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 See Note 3 for further discussion of the Company's revenue recognition. Cost of Revenues Cost of revenues principally consists of salaries, benefits, bonuses, stock-based compensation expenses and other indirect costs for the Company's researchers who collect and analyze the real estate data that is the basis for the Company's information, analytics and online marketplaces and for employees that support these products. Additionally, cost of revenues includes the cost of data from third-party data sources and costs related to advertising purchased on behalf of customers, 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 certain other intangible assets. Foreign Currency Translation The Company’s reporting currency is the U.S. dollar. The functional currency for the majority of its operations is the local currency, with the exception of certain international locations for which the functional currency is the British Pound. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect as of the balance sheet date. 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. Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in other income (expense), net in the consolidated statements of operations using the average exchange rates in effect during the period. The Company recognized net foreign currency gains of $1.4 million and $0.3 million, and losses of $0.2 million for the years ended December 31, 2022, 2021 and 2020, respectively, which are included in other income (expense), net on the consolidated statements of operations. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, were as follows (in thousands): As of December 31, 2022 2021 Foreign currency translation adjustment $ (29,075) $ (5,758) Total accumulated other comprehensive loss $ (29,075) $ (5,758) During the year ended December 31, 2020, the Company sold its long-term variable debt instruments with an auction reset feature, referred to ARS, and reclassified out of accumulated other comprehensive loss a realized loss of $0.5 million to earnings that is included in other income (expense), net in the consolidated statements of operations. There were no amounts reclassified out of accumulated other comprehensive loss to the consolidated statements of operations for the years ended December 31, 2022 and December 31, 2021. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs include digital marketing, television, radio, print and other media advertising. Advertising costs were $305.7 million, $312.0 million and $270.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. 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 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. The Company has elected to record the GILTI under the current-period cost method. See Note 12 for further discussion of 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 Company's potentially dilutive securities include outstanding stock options, unvested stock-based awards, which include restricted stock awards that vest over a specific service period, restricted stock awards with a performance and market condition, restricted stock units and Matching RSUs awarded under the MSPP. Shares underlying unvested restricted stock awards that vest based on a performance and market condition 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. 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. See Note 16 for further discussion of the Company's calculation of net income per share. 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 and the fair value of such equity instruments is recognized as expense in the consolidated statements of operations. For stock-based awards that vest over a specific service period, 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 service period of the awards, net of an estimated forfeiture rate. For equity instruments that vest based on achievement of both a performance and market condition, stock-based compensation expense is recognized over the service period of the awards 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 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. For awards with both a performance 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 which includes the recent market price and volatility of the Company's shares. When determining the grant date fair value of all stock-based awards, the Company considers whether it is in possession of any material, non-public information that upon its release would have a material affect on its share price, and if so, whether the observable share price or expected volatility assumptions used in determining the fair value of the awards should be adjusted. Stock-based compensation expense for stock options, restricted stock awards and restricted stock units issued under equity incentive plans, stock purchases under the ESPP, DSUs and Matching RSUs awarded under the MSPP included in the Company’s consolidated statements of operations were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenues $ 12,579 $ 11,165 $ 10,879 Selling and marketing (excluding customer base amortization) 7,797 6,314 5,194 Software development 12,987 12,544 10,325 General and administrative 41,844 33,686 27,706 Total stock-based compensation expense (1) $ 75,207 $ 63,709 $ 54,104 __________________________ (1) Stock-based compensation expense for the year ended December 31, 2020 includes $0.7 million of expense related to the cash settlement of stock options in connection with the acquisition of Ten-X. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents were $5.0 billion and $3.8 billion as of December 31, 2022 and 2021, respectively. The Company had no restricted cash as of December 31, 2022 and 2021. Concentration of Credit Risk and Financial Instruments The Company’s customer base creates a lack of dependence on any individual customer that mitigates the risk of nonpayment of the Company’s accounts receivable. No single customer accounted for more than 5% of the Company’s revenues for each of the years ended December 31, 2022, 2021 and 2020. The carrying amount of the accounts receivable approximates the net realizable value. The Company holds cash at major financial institutions that often exceed Federal Deposit Insurance Corporation insured limits. The Company manages its credit risk associated with cash concentrations by diversifying cash holdings across AAA rated Government and Treasury Money Market Funds and multiple high quality financial institutions, and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The carrying value of cash approximates fair value. Historically, the Company has not experienced any losses due to such cash concentrations. Allowance for Credit Losses The Company maintains an allowance for credit losses to cover its current expected credit losses on its trade receivables and contract assets arising from the failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables and historical write-off trends. Based on the Company’s experience, the customer's delinquency status, which is analyzed periodically, is the strongest indicator of the credit quality of the underlying trade receivables. The Company’s policy is to write-off trade receivables when they are deemed uncollectible. A majority of the Company's trade receivables are less than 365 days outstanding. Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on five portfolio segments. The determination of portfolio segments is based primarily on the qualitative consideration of the nature of the Company’s business operations and the characteristics of the underlying trade receivables, as follows: • CoStar Portfolio Segment - The CoStar portfolio segment consists of two classes of trade receivables based on geographical location: North America and International. • Information Services Portfolio Segment - The Information Services portfolio segment consists of four classes of trade receivables: CoStar Real Estate Manager; Information Services, North America; STR, North America; and STR, International. • Multifamily Portfolio Segment - The Multifamily portfolio segment consists of one class of trade receivables. • LoopNet Portfolio Segment - The LoopNet portfolio segment consists of one class of trade receivables. • Other Marketplaces Portfolio Segment - The Other Marketplaces portfolio segment consists of two classes of trade receivables: Ten-X and other marketplaces. The majority of Residential revenue is e-commerce based and does not result in accounts receivable. Residential accounts receivable and the related allowance for credit losses are not material. See Note 4 for further discussion of the Company’s accounting for allowance for credit losses. Leases The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at the commencement of the arrangement, at which time the Company also measures and recognizes an 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 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 deemed 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, offset by lease incentives. Upon commencement, the initial ROU asset also includes any lease prepayments. 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 and is determined at lease commencement and is subsequently reassessed upon a modification to the lease arrangement. Lease costs related to the Company's operating leases are generally recognized as a single ratable lease cost over the lease term. Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation and amortization. All repairs and maintenance costs are expensed as incurred. Costs related to acquisition of additional aircraft components or the replacement of existing aircraft components are capitalized and depreciated over the estimated useful life of the aircraft or the added or replaced component, whichever is less. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives of the assets: Buildings Twenty thirty-nine Land Indefinite Aircrafts Ten twenty Furniture and office equipment Five ten Vehicles Five years Computer hardware and software Three five Leasehold improvements Shorter of lease terms or useful life Qualifying internal-use software costs incurred during the application development stage, which consist primarily of internal product development costs, outside services and purchased software license costs are capitalized and amortized over the estimated useful life of the asset. All other costs are expensed as incurred. In the fourth quarter of 2021, the Company began removing fully depreciated property and equipment from the cost and accumulated depreciation amounts disclosed. In January 2021, the Company purchased an office building located in Richmond, Virginia, together with the land and assumed an existing lease for a purchase price of $131 million, inclusive of property taxes, title insurance and other transaction costs. The purchase of the Richmond building was accounted for as an asset acquisition, including an intangible asset for the assumed lease. The net impact from the lease arrangement is recorded in other income (expense), net on the consolidated statements of operations and was not material. The Company has broken ground on an expansion of its campus in Richmond, Virginia and acquired a small office building near the campus to facilitate employee staging while the expansion is being constructed. The capitalized spending associated with these efforts is recorded in the purchase of Richmond assets line of the consolidated statements of cash flows. 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 the 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. During 2022, the Company ceased using leased properties in California and Maryland as part of efforts to centralize our workforce which resulted in an impairment charge of $9 million for lease ROU assets and property and equipment related to abandoned leases. The impairment was recorded in the general and administrative expense line of the consolidated statements of operations. The leases related to the North America segment. Acquired technology and data, customer base assets, trade names and other intangible assets are related to the Company’s acquisitions. Acquired technology and data is amortized on a straight-line basis over periods ranging from 2 years to 7 years. Acquired intangible assets characterized as customer base assets consist of acquired customer contracts and the related customer relationships and are amortized over periods ranging from 3 years to 13 years. Acquired customer bases are amortized on an accelerated or straight-line basis depending on the expected economic benefit of the intangible asset. Acquired trade names and other intangible assets are amortized on a straight-line basis over periods ranging from 3 years to 15 years. In the fourth quarter of 2021, the Company began removing fully amortized intangible assets from the cost and accumulated amortization amounts disclosed. Goodwill represents the future economic benefits arising from a business combination and is calculated as the excess of the purchase consideration paid in a business combination over the fair value of the net identifiable assets acquired. Goodwill is not amortized, but instead is assigned to each of the Company's reporting units and tested for impairment at least annually, on October 1, or more frequently if an event or other circumstance indicates that the fair value of a reporting unit may be below its carrying amount. We 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 the qualitative 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 we elect to bypass the qualitative assessment, we then perform a quantitative assessment by determining the fair value of each reporting unit. The estimate of the fair value of each reporting unit is based on a projected discounted cash flow model that includes significant assumptions and estimates including the discount rate, growth rate and future financial performance. Assumptions about the discount rate are based on a weighted average cost of capital for comparable companies. Assumptions about the growth rate and future financial performance of a reporting unit are based on the Company's forecasts, business plans, economic projections and anticipated future cash flows. 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. See Notes 5, 9 and 10 for further discussion of acquisitions, goodwill and intangible assets, respectively. 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. The Company made a policy election to classify deferred issuance costs on the revolving credit facility as a long-term asset on its consolidated balance sheets. 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 11 for further discussion of the Company's accounting for its outstanding debt, revolving credit facility and related issuance costs. Business Combinations The Company generally allocates the purchase consideration to the tangible assets acquired and liabilities assumed and intangible assets acquired based on their estimated fair values. The purchase price is generally determined based on the fair value of the assets transferred, liabilities assumed 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. The Company applies significant assumptions, estimates and judgments in determining the fair value of assets acquired and liabilities assumed on the acquisition date, 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. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In 2021, the Company adopted ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This guidance requires contract assets and liabilities acquired or assumed in an acquisition be measured in accordance with the accounting framework for revenue from contracts with customers as if the Company had originated the acquired contract. This is an exception to the general requirement to measure assets acquired and liabilities assumed at their fair value on the acquisition date. The Company applied this revised guidance to all acquisitions in the year ended December 31, 2021. The application of this guidance to contract assets and contract liabilities acquired or assumed in connection with the Company's acquisitions for the year ended December 31, 2021 did not have a material impact on the Company's consolidated financial statements and related disclosures. Recent Accounting Pronouncements Not Yet Adopted On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASC 848 contains optional expedients and exceptions for applying GAAP to debt, contracts, hedging relationships and other transactions affected by reference rate reform. The provisions of ASC 848 must be applied to all contracts that are accounted for under a Topic, Subtopic or Industry Subtopic for all transactions other than derivatives, which may be applied at a hedging relationship level. Originally, the guidance was effective for fiscal years beginning after January 1, 2021, including interim periods within those fiscal years. However, in response to the deferral of the cessation date for certain overnight LIBOR measures, the FASB issued ASU 2022-06 on December 21, 2022, which extends the sunset date of Topic 848 to December 31, 2024. The Company's 2020 Credit Agreement provides for a $750 million revolving credit facility and a letter of credit sublimit of $20 million, with interest rates benchmarked to LIBOR. As of December 31, 2022, no amounts were issued or drawn under this facility. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures. In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. This ASU eliminates prior guidance on troubled debt restructurings for creditors that have adopted ASU 2016-13, Measurement of Credit Losses in Financial Statements, |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2022 | |
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, hospitality industry, residential industry and related professionals. The revenues by operating segment and type of service consist of the following (in thousands): Year Ended December 31, 2022 2021 2020 North America International Total North America International Total North America International Total CoStar $ 800,183 $ 36,797 $ 836,980 $ 686,948 $ 35,873 $ 722,821 $ 634,205 $ 30,530 $ 664,735 Information services 124,951 32,431 157,382 113,723 27,932 141,655 104,117 25,953 130,070 Multifamily 745,388 — 745,388 678,680 — 678,680 598,555 — 598,555 LoopNet (1) 223,758 7,183 230,941 204,816 2,695 207,511 179,371 434 179,805 Residential (1) 73,747 — 73,747 74,583 — 74,583 — — — Other Marketplaces (1) 137,961 — 137,961 118,885 — 118,885 85,854 — 85,854 Total revenues $ 2,105,988 $ 76,411 $ 2,182,399 $ 1,877,635 $ 66,500 $ 1,944,135 $ 1,602,102 $ 56,917 $ 1,659,019 (1) As of September 30, 2021, Commercial Property and Land revenue has been further disaggregated into LoopNet, Residential and Other Marketplaces. Prior period amounts have been adjusted to reflect this presentation. Deferred Revenue Changes in deferred revenue for the period were as follows (in thousands): Balance at December 31, 2021 (1) $ 96,724 Revenue recognized in the current period from the amounts in the beginning balance (93,816) New deferrals, net of amounts recognized in the current period 102,410 Effects of foreign currency (1,536) Balance at December 31, 2022 (2) $ 103,782 __________________________ (1) Deferred revenue was comprised of $95.5 million of current liabilities and $1.2 million of noncurrent liabilities classified within lease and other long-term liabilities on the Company’s consolidated balance sheet as of December 31, 2021. (2) Deferred revenue was comprised of $103.6 million of current liabilities and $0.2 million of noncurrent liabilities classified within lease and other long-term liabilities on the Company’s consolidated balance sheet as of December 31, 2022. This balance includes $1.8 million of net new deferrals recognized in connection with business acquisitions made in 2022. See Note 5 for further discussion of acquisitions. Contract Assets The Company had contract assets of $12.4 million and $9.2 million as of December 31, 2022 and December 31, 2021, respectively, 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. Current contract assets are included in prepaid expenses and other current assets and non-current contract assets are included in deposits and other assets on the Company's consolidated balance sheets. Commissions Commissions expense is included in selling and marketing expense in the Company's consolidated statements of operations. The Company determined that no deferred commissions were impaired as of both December 31, 2022 and December 31, 2021. Commissions expense activity for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Commissions incurred $ 162,126 $ 117,391 $ 97,183 Commissions capitalized in the current period (116,796) (72,038) (64,355) Amortization of deferred commissions costs 76,082 63,391 60,516 Total commissions expense $ 121,412 $ 108,744 $ 93,344 See Note 2 for the Company's policy on accounting for commissions. Unsatisfied Performance Obligations Remaining contract consideration for which revenue had not been recognized due to unsatisfied performance obligations was $436.1 million as of December 31, 2022, 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. |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 12 Months Ended |
Dec. 31, 2022 | |
Credit Loss [Abstract] | |
ALLOWANCE FOR CREDIT LOSSES | 4. ALLOWANCE FOR CREDIT LOSSES The following tables detail the activity related to the allowance for credit losses for trade receivables by portfolio segment (in thousands): Year Ended December 31, 2022 CoStar Information services Multifamily LoopNet Other Marketplaces Total Beginning balance at December 31, 2021 $ 5,380 $ 1,820 $ 3,393 $ 1,968 $ 813 $ 13,374 Current-period provision (release) for expected credit losses 9,168 (557) 5,813 3,807 78 18,309 Write-offs charged against the allowance, net of recoveries and other (10,038) (212) (4,859) (4,379) — (19,488) Ending balance at December 31, 2022 $ 4,510 $ 1,051 $ 4,347 $ 1,396 $ 891 $ 12,195 Year Ended December 31, 2021 CoStar Information services Multifamily LoopNet Other Marketplaces Total Beginning balance at December 31, 2020 $ 5,531 $ 2,739 $ 4,387 $ 1,667 $ 786 $ 15,110 Current-period provision (release) for expected credit losses 5,699 (392) 3,057 2,564 — 10,928 Write-offs charged against the allowance, net of recoveries and other (5,850) (527) (4,051) (2,263) 27 (12,664) Ending balance at December 31, 2021 $ 5,380 $ 1,820 $ 3,393 $ 1,968 $ 813 $ 13,374 Year Ended December 31, 2020 CoStar Information services Multifamily LoopNet Other Marketplaces Total Beginning balance at December 31, 2019 $ 1,264 $ 624 $ 1,195 $ 576 $ 889 $ 4,548 Current-period provision for expected credit losses 11,622 2,649 7,644 3,213 84 25,212 Write-offs charged against the allowance, net of recoveries and other (7,355) (534) (4,452) (2,122) (187) (14,650) Ending balance at December 31, 2020 $ 5,531 $ 2,739 $ 4,387 $ 1,667 $ 786 $ 15,110 Credit loss expense is included in general and administrative expenses on the consolidated statements of operations. Credit loss expense related to contract assets was not material for the years ended December 31, 2022, 2021 and 2020. The majority of the Residential portfolio segment revenue is e-commerce based and does not result in accounts receivable. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS Business Immo In April 2022, the Company acquired Business Immo, a leading commercial real estate news service provider in France, for €5.8 million ($6.3 million), net of cash acquired and the assumption of outstanding debt. As part of the acquisition, the Company recorded goodwill and intangible assets of $7.1 million and $3.9 million, respectively. The net assets of Business Immo were recorded at their estimated fair value. The purchase price allocation is preliminary, subject primarily to the Company's assessment of certain tax matters and contingencies. The Company retired the assumed debt in the second quarter of 2022, which is included in payments of long-term debt on the consolidated statements of cash flow. BureauxLocaux In October 2021, CoStar UK acquired BureauxLocaux, a commercial real estate digital marketplace in France, for a base purchase price of €35.0 million ($40.6 million) in cash, subject to customary working capital and other post-closing adjustments which were settled in the fourth quarter of 2021. As part of the acquisition, the Company recorded goodwill and intangible assets of $27.4 million and $18.3 million, respectively, in the Company's International operating segment. The net assets of BureauxLocaux were recorded at their estimated fair value. Homes.com In May 2021, the Company closed the Homes.com Acquisition in which the Company acquired all of the issued and outstanding equity interests in Homes Group for a purchase price of $150.0 million in cash, subject to customary working capital and other post-closing adjustments which resulted in total consideration of $152.2 million. Homes Group operates Homes.com, a residential marketplace hosted on the website Homes.com and mobile apps that provided real estate advertising and marketing services. In November 2022 CoStar Group integrated the operations of Homes.com and Homesnap. 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: May 24, 2021 Cash and cash equivalents $ — Accounts receivable 1,798 Lease right-of-use assets 371 Goodwill 91,875 Intangible assets 53,400 Deferred tax assets 7,862 Lease liabilities (371) Deferred revenue (1,521) Other assets and liabilities (1,239) Fair value of identifiable net assets acquired $ 152,175 The net assets of Homes Group were recorded at their estimated fair values. In valuing the 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. The estimated fair value of the customer base assets incorporated significant assumptions that had a material impact on the estimated fair value, such as discount rates, projected revenue growth rates, customer attrition rates and profit margins. The following table summarizes the fair values (in thousands) of the identifiable intangible assets acquired in the Homes.com Acquisition included in the Company's North America operating segment, their related estimated useful lives (in years) and their respective amortization methods: Estimated Fair Value Estimated Useful Life Amortization Method Customer base $ 32,000 8 Accelerated Trade name 21,000 15 Straight-line Technology 400 2 Straight-line Total intangible assets $ 53,400 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 Homes.com 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 Homes.com operations and (ii) any intangible assets that do not qualify for separate recognition, such as the assembled workforce. The $91.9 million of goodwill recorded as part of the acquisition is associated with the Company's North America operating segment, of which $20.0 million is expected to be deductible for income tax purposes. Transaction costs associated with the Homes.com Acquisition were not material. The Company paid $5.0 million into a cash escrow account for stay bonuses for certain Homes.com employees and recognized compensation expense for the stay bonus over the six-month post-combination period. Upon acquisition, the Company assessed the probability it would be required to pay certain state tax liabilities and recorded an accrual of $6.6 million determined in accordance with the provisions of ASC 450, Contingencies , as the fair value was not determinable. Landmark has agreed to indemnify the Company for tax liabilities related to periods prior to the acquisition and an indemnification asset was established for $6.6 million in the purchase price allocation. Homesnap In December 2020, the Company closed the Homesnap Acquisition, acquiring all of the issued and outstanding equity interests in Homesnap, Inc. for a purchase price of $250.0 million in cash. The Homesnap Acquisition enabled CoStar Group to enter the residential real estate market and expand the markets in which the Company competes. Homesnap, Inc. operates a residential marketplace through its Homesnap.com website and mobile apps which is integrated with an online and mobile software platform that provides applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homesnap, Inc. has relationships, data, software and tools for residential real estate professionals that are complementary to CoStar Group’s existing offerings. 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: Cash, cash equivalents and restricted cash $ 10,225 Accounts receivable 662 Lease right-of-use assets 3,437 Goodwill 184,371 Intangible assets 67,000 Deferred tax assets, net (2,778) Lease liabilities (3,375) Deferred revenue (4,000) Other assets and liabilities (5,188) Fair value of identifiable net assets acquired $ 250,354 The net assets of Homesnap, Inc. were recorded at their estimated fair values. In valuing the 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. The estimated fair value of the customer base assets incorporated significant assumptions that had a material impact on the estimated fair value, such as discount rates, projected revenue growth rates, customer attrition rates and profit margins. The following table summarizes the fair values (in thousands) of the identifiable intangible assets included in the Company's North America operating segment, their related estimated useful lives (in years) and their respective amortization methods: Estimated Fair Value Estimated Useful Life Amortization Method Customer base $ 45,000 10 Accelerated Trade name 7,000 10 Straight-line Technology 15,000 6 Straight-line Total intangible assets $ 67,000 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 Homesnap 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 Homesnap, Inc.'s operations and (ii) any intangible assets that do not qualify for separate recognition, such as the assembled workforce. The $184.4 million of goodwill recorded as part of the acquisition is associated with the Company's North America operating segment. Goodwill recognized is not deductible for income tax purposes. Transaction costs associated with the Homesnap Acquisition were not material. Ten-X In June 2020, the Company closed the Ten-X Acquisition, acquiring all of the issued and outstanding equity interests in Ten-X for a purchase price of $188.0 million in cash. Ten-X operates an online auction platform for commercial real estate. The Ten-X Acquisition enable the Company to create an end-to-end commercial real estate platform, combining LoopNet and the Company's online audience of buyers with Ten-X’s leadership in online auctions for commercial properties. 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: Cash and cash equivalents $ 3,290 Accounts receivable 131 Lease right-of-use assets 4,945 Goodwill 134,322 Intangible assets 58,000 Lease liabilities (4,945) Deferred tax liabilities, net (2,981) Other assets and liabilities (5,047) Fair value of identifiable net assets acquired $ 187,715 The net assets of Ten-X were recorded at their estimated fair values. In valuing the 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. The estimated fair value of the customer base assets incorporated significant assumptions that had a material impact on the estimated fair value, such as discount rates, projected revenue growth rates, customer attrition rates and profit margins. The following table summarizes the fair values (in thousands) of the identifiable intangible assets included in the Company's North America operating segment, their related estimated useful lives (in years) and their respective amortization methods: Estimated Fair Value Estimated Useful Life Amortization Method Customer base $ 46,000 6 Accelerated Technology 11,000 5 Straight-line Other intangible assets 1,000 2 Straight-line Total intangible assets $ 58,000 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 Ten-X 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 Ten-X's operations and (ii) any intangible assets that do not qualify for separate recognition, such as the assembled workforce. The $134.3 million of goodwill recorded as part of the acquisition is associated with the Company's North America operating segment. Goodwill recognized is not deductible for income tax purposes. The transaction costs associated with the Ten-X Acquisition were not material. The Company paid $3.0 million in incentive compensation to Ten-X employees negotiated as part of the acquisition, and this expense was recognized in the post-combination period. Pro Forma Financial Information (unaudited) The unaudited pro forma financial information presented below reflects the consolidated results of operations of the Company assuming the Homes.com Acquisition had taken place on January 1, 2020 and the Homesnap Acquisition and Ten-X Acquisition had taken place on January 1, 2019. 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 acquisitions had not taken on place on the dates listed above. The unaudited pro forma financial information, in the aggregate, was as follows (in thousands, except per share data): Year Ended 2021 2020 Revenue $ 1,962,102 $ 1,758,612 Net income $ 286,718 $ 197,994 Net income per share - basic $ 0.74 $ 0.52 Net income per share - diluted $ 0.73 $ 0.51 The impact of the Homes.com Acquisition on the Company's revenues and net income in the consolidated statements of operations from May 24, 2021 through December 31, 2021 was an increase of $13.6 million and a decrease of $23.5 million, respectively. The impact of the Homesnap Acquisition on the Company's revenues and net income in the consolidated statements of operations from December 22, 2020 through December 31, 2020 was not material. The impact of the Ten-X Acquisition on the Company's revenues and net income in the consolidated statements of operations from June 24, 2020 through December 31, 2020 was an increase of $31.8 million and a decrease of $10.0 million, respectively. The pro forma financial information of the BureauxLocaux Acquisition and Business Immo Acquisition was not material. |
INVESTMENTS AND FAIR VALUE MEAS
INVESTMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Investments And Fair Value Disclosures [Abstract] | |
INVESTMENTS AND FAIR VALUE MEASUREMENTS | INVESTMENTS AND FAIR VALUE MEASUREMENTS 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 Company's financial assets comprise Level 1 cash equivalents with original maturities of three months or less in the amount of $4.8 billion and $3.0 billion as of December 31, 2022 and December 31, 2021, respectively. The Company had no Level 2 or Level 3 financial assets measured at fair value. The Company holds other financial instruments, including cash deposits, accounts receivable, accounts payable, accrued expenses and Senior Notes. The carrying value for such financial instruments, other than the Senior Notes, each approximated their fair values as of December 31, 2022 and December 31, 2021. The estimated fair value of the Company's outstanding Senior Notes using quoted prices from the over-the-counter markets, considered Level 2 inputs, was $0.8 billion and $1.0 billion as of December 31, 2022 and December 31, 2021, respectively. |
INVESTMENTS AND FAIR VALUE MEASUREMENTS | INVESTMENTS AND FAIR VALUE MEASUREMENTS 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 Company's financial assets comprise Level 1 cash equivalents with original maturities of three months or less in the amount of $4.8 billion and $3.0 billion as of December 31, 2022 and December 31, 2021, respectively. The Company had no Level 2 or Level 3 financial assets measured at fair value. The Company holds other financial instruments, including cash deposits, accounts receivable, accounts payable, accrued expenses and Senior Notes. The carrying value for such financial instruments, other than the Senior Notes, each approximated their fair values as of December 31, 2022 and December 31, 2021. The estimated fair value of the Company's outstanding Senior Notes using quoted prices from the over-the-counter markets, considered Level 2 inputs, was $0.8 billion and $1.0 billion as of December 31, 2022 and December 31, 2021, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
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 six years. The leases contain various renewal and termination options. The period that 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 that 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 consolidated statements of operations were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease costs: Cost of revenues $ 8,428 $ 10,110 $ 11,632 Software development 7,201 6,947 6,020 Selling and marketing (excluding customer base amortization) 12,642 11,911 10,356 General and administrative 5,360 5,911 4,827 Total operating lease costs $ 33,631 $ 34,879 $ 32,835 The impact of lease costs related to finance leases and short-term leases was not material for the years ended December 31, 2022, 2021 and 2020. Supplemental balance sheet information related to operating leases was as follows (in thousands): Year Ended December 31, Balance Balance Sheet Location 2022 2021 Operating lease liabilities $ 118,294 $ 134,150 Less: imputed interest (6,238) (8,512) Present value of lease liabilities 112,056 125,638 Less: current portion of lease liabilities Lease liabilities 36,049 26,268 Long-term lease liabilities Lease and other long-term liabilities $ 76,007 $ 99,370 Weighted-average remaining lease term in years 3.6 4.0 Weighted-average discount rate 3.1 % 3.1 % Balance sheet information related to finance leases was not material as of December 31, 2022 and December 31, 2021. Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 41,550 $ 37,298 $ 37,006 ROU assets obtained in exchange for lease obligations: Operating leases $ 19,967 $ 34,247 $ 19,746 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consists of the following (in thousands): December 31, 2022 2021 Leasehold improvements $ 108,901 $ 75,634 Furniture, office equipment and vehicles 52,610 47,540 Computer hardware and software 43,830 30,179 Aircrafts 44,209 68,670 Land 52,227 38,774 Buildings 105,060 96,496 Property and equipment, gross 406,837 357,293 Accumulated depreciation and amortization (85,587) (85,862) Property and equipment, net $ 321,250 $ 271,431 Depreciation expense for property and equipment was approximately $29.1 million, $29.0 million and $28.8 million, for the years ended December 31, 2022, 2021 and 2020, respectively. In 2022, the Company removed $27.6 million of property and equipment, that was fully depreciated from property and equipment, gross and accumulated depreciation and amortization, which had no net impact on the Company's financial results. In August 2022, the Company entered into an agreement to sell an aircraft subject to customary condition and inspection terms. The sale of the aircraft closed in October 2022 for cash consideration of $24.9 million. The Company recorded a gain on the sale of the aircraft of $3.3 million, which was recorded to general and administrative expenses in the consolidated statements of operations. The aircraft related to the North America segment. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
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, 2020 $ 2,085,494 $ 150,505 $ 2,235,999 Acquisitions, including measurement period adjustments (1) 60,352 27,441 87,793 Effect of foreign currency translation — (2,777) (2,777) Goodwill, December 31, 2021 2,145,846 175,169 2,321,015 Acquisitions, including measurement period adjustments (2) 3,401 7,095 10,496 Effect of foreign currency translation — (16,752) (16,752) Goodwill, December 31, 2022 $ 2,149,247 $ 165,512 $ 2,314,759 __________________________ (1) North America goodwill for the year ended December 31, 2021 includes goodwill recorded in connection with the acquisition of Homes.com of $88.5 million, offset by measurement period adjustments of $1.4 million for Ten-X and $26.7 million for Homesnap recorded during the year ended December 31, 2021 primarily related to the measurement of the fair value of Homesnap customer relationships in the first quarter of 2021. International goodwill recorded in connection with the acquisition of BureauxLocaux was $27.4 million. See Note 5 for further discussion. (2) North America goodwill recorded during the year ended December 31, 2022 relates to a measurement period adjustment for income taxes for Homes.com of $3.4 million. International goodwill recorded in connection with the acquisition of Business Immo was $7.1 million. Of the goodwill generated from acquisitions completed in 2021, $20 million is expected to be deductible for tax purposes. Goodwill generated from acquisitions completed in 2022 and was not deductible for tax purposes. No impairments of the Company's goodwill were recognized during the years ended December 31, 2022, 2021 and 2020. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets consist of the following (in thousands, except amortization period data): December 31, Weighted- Average 2022 2021 Acquired technology and data $ 40,422 $ 41,979 5 Accumulated amortization (20,693) (15,333) Acquired technology and data, net 19,729 26,646 Acquired customer base 464,242 569,666 10 Accumulated amortization (287,051) (319,039) Acquired customer base, net 177,191 250,627 Acquired trade names and other intangible assets 247,361 262,136 13 Accumulated amortization (114,975) (103,747) Acquired trade names and other intangible assets, net 132,386 158,389 Intangible assets, net $ 329,306 $ 435,662 Amortization expense for intangible assets was approximately $102.6 million, $103.6 million and $88.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. In 2022, the Company removed $87.7 million of intangible assets that were fully amortized from the acquired intangible assets and accumulated amortization, which had no net impact on the Company's financial results. In the aggregate, the Company expects the future amortization expense for intangible assets existing as of December 31, 2022 to be approxi mately $69.1 million , $57.0 million , $45.5 million , $37.3 million and $30.2 million for the years e nding December 31, 2023, 2024, 2025, 2026 and 2027, respectively. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. No impairments of the Company's intangible assets were recognized during the years ended December 31, 2022, 2021 and 2020. The Company decided to eliminate usage fees related to agent access to a Homesnap product charged to a specific customer class. This resulted in an acceleration of $16.3 million of amortization expense in 2022 for acquired customer base for this customer class. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The table below presents the components of outstanding debt (in thousands): December 31, 2022 December 31, 2021 2.800% Senior Notes due July 15, 2030 $ 1,000,000 $ 1,000,000 2020 Credit Agreement, due July 1, 2025 — — Total face amount of long-term debt 1,000,000 1,000,000 Senior notes unamortized discount and issuance costs (10,790) $ (12,056) Long-term debt, net $ 989,210 $ 987,944 Senior Notes On July 1, 2020, the Company issued $1.0 billion aggregate principal amount of 2.800% Senior Notes due July 15, 2030. The Senior Notes were sold to a group of financial institutions as initial purchasers who subsequently resold the Senior Notes to non-U.S. persons pursuant to Regulation S under the Securities Act, and to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act at a purchase price equal to 99.921% of their principal amount. Interest on the Senior Notes is payable semi-annually in arrears on January 15 and July 15. The Senior Notes may be redeemed in whole or in part by the Company (a) at any time prior to April 15, 2030 at a redemption price equal to 100% of the principal amount of the Senior Notes, plus the Applicable Premium (as calculated in accordance with the indenture governing the Senior Notes), and any accrued and unpaid interest, if any, on the principal amount of Senior Notes being redeemed to, but excluding, the redemption date, and (b) on or after April 15, 2030 at a redemption price equal to 100% of the principal amount of the Senior Notes, plus any accrued and unpaid interest, if any, on the principal amount of Senior Notes being redeemed to, but excluding, the redemption date. The Company’s obligations under the Senior Notes are guaranteed on a senior, unsecured basis by the Company’s domestic wholly owned subsidiaries and the indenture governing the Senior Notes contains covenants, events of default and other customary provisions with which the Company was in compliance as of December 31, 2022. Revolving Credit Facility On July 1, 2020, the Company entered into the 2020 Credit Agreement, which provides for a $750 million revolving credit facility with a term of five years (maturing July 1, 2025) and a letter of credit sublimit of $20 million from a syndicate of financial institutions as lenders and issuing banks. A commitment fee of 0.25% to 0.30% per annum, depending on the Total Leverage Ratio (defined in 2020 Credit Agreement), is payable quarterly in arrears based on the unused revolving commitment. Subject to certain conditions, on no more than five occasions, the Company may request increases in the amount of revolving commitments and/or the establishment of term commitments under the 2020 Credit Agreement. Borrowings under the 2020 Credit Agreement will bear interest at a floating rate which can be, at the Company’s option, either (a) an alternate base rate plus an applicable rate ranging from 0.50% to 1.25% or (b) a LIBOR or EURIBOR (with a floor of 0.0%) for the specified interest period plus an applicable rate ranging from 1.50% to 2.25%, in each case depending on the Company's Total Leverage Ratio (as defined in the 2020 Credit Agreement). As LIBOR may not always be available to the Company as a base interest rate for borrowings under the credit facility, the 2020 Credit Agreement allows the Company and the administrative agent under the 2020 Credit Agreement to amend the 2020 Credit Agreement to replace LIBOR with one or more SOFR-based rates or another alternative benchmark rate. Funds drawn down on the revolving credit facility pursuant to the 2020 Credit Agreement may be used for working capital and other general corporate purposes of the Company and its restricted subsidiaries. The obligations under the 2020 Credit Agreement are guaranteed by each of the Company’s current and future direct or indirect wholly owned restricted domestic subsidiaries, other than certain excluded subsidiaries, in each case subject to certain exceptions, pursuant to guarantee agreements. The 2020 Credit Agreement includes covenants, including ones that, subject to certain exceptions, restrict the ability of the Company and its subsidiaries to (i) merge and consolidate with other companies, (ii) incur indebtedness, (iii) grant liens or security interests on assets, (iv) make investments, acquisitions, loans or advances, (v) pay dividends and (vi) sell or otherwise transfer assets. As of December 31, 2022, the Company is in a Covenant Suspension Period. During any Covenant Suspension Period, the Company will not be subject to certain of these covenants such as restrictions on the ability to incur indebtedness. The 2020 Credit Agreement also requires the Company to maintain a Total Leverage Ratio (as defined in the 2020 Credit Agreement) not exceeding 4.50 to 1.00. The Company was in compliance with the covenants in the 2020 Credit Agreement as of December 31, 2022. As of December 31, 2022, the Company had not drawn any amounts under this facility. The Company had $2.7 million and $3.8 million of deferred debt issuance costs as of December 31, 2022 and December 31, 2021, respectively, in connection with the 2020 Credit Agreement. These amounts are included in deposits and other assets on the Company's consolidated balance sheets. For the years ended December 31, 2022, 2021 and 2020, the Company recognized interest expense as follows (in thousands): Year Ended 2022 2021 2020 Interest on outstanding borrowings $ 28,000 $ 28,000 $ 18,509 Amortization of Senior Notes discount and issuance costs 2,365 2,327 1,658 Commitment fees and other 1,960 1,989 1,627 Total interest expense $ 32,325 $ 32,316 $ 21,794 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of the provision for income taxes attributable to operations consist of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current: Federal $ 116,312 $ 61,290 $ 43,461 State 31,231 24,618 11,726 Foreign 664 1,331 195 Total current 148,207 87,239 55,382 Deferred: Federal (20,455) 22,859 (9,599) State (9,582) 8,467 (926) Foreign (1,166) (7,161) (1,005) Total deferred (31,203) 24,165 (11,530) Total provision for income taxes $ 117,004 $ 111,404 $ 43,852 The components of deferred tax assets and liabilities consist of the following (in thousands): December 31, 2022 2021 Deferred tax assets: Allowance for credit losses $ 3,373 $ 3,601 Accrued compensation 4,590 3,913 Stock compensation 20,427 18,956 Net operating losses 26,794 45,835 Accrued reserve and other 6,768 4,134 Lease liabilities 26,446 28,306 Capitalized research and development costs 45,351 — Research and development credits 6,073 5,812 Total deferred tax assets, prior to valuation allowance 139,822 110,557 Valuation allowance (5,241) (5,694) Total deferred tax assets, net of valuation allowance 134,581 104,863 Deferred tax liabilities: Deferred commission costs, net (36,112) (25,700) Lease right-of-use assets (18,217) (22,574) Prepaid expenses (3,206) (2,569) Property and equipment, net (25,691) (21,827) Intangible assets, net (117,835) (125,815) Total deferred tax liabilities (201,061) (198,485) Net deferred tax liabilities $ (66,480) $ (93,622) For the years ended December 31, 2022 and 2021, the Company has not recognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries that were deemed permanently reinvested. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, depends on certain circumstances existing if and when remittance occurs. A deferred tax liability will be recognized if and when the Company no longer plans to permanently reinvest these undistributed earnings. As of December 31, 2022 and 2021, a valuation allowance has been established for certain deferred tax assets due to the uncertainty of realization. The valuation allowance as of December 31, 2022 and 2021 includes an allowance for acquired net operating losses and foreign deferred tax assets. The Company established the valuation allowance because it is more likely than not that a portion of the deferred tax asset for certain items will not be realized based on the weight of available evidence. A valuation allowance was established for the foreign deferred tax assets due to the cumulative loss in recent years in those jurisdictions. The Company has not had sufficient taxable income historically to utilize the foreign deferred tax assets, and it is uncertain whether the Company will generate sufficient taxable income in the future to utilize the deferred tax assets. The Company has established a valuation allowance for certain acquired net operating losses where Section 382 limitations will impact the ability of the Company to utilize the net operating losses before they expire. The Company’s change in valuation allowance was a decrease of approximately $0.5 million for the year ended December 31, 2022 and a decrease of approximately $5.5 million for the year ended December 31, 2021. The decreases for the years ended December 31, 2022 and December 31, 2021 were primarily due to an international restructuring. The Company had U.S. income before income taxes of approximately $493.2 million, $408.8 million and $290.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company had foreign losses before income taxes of approximately $6.7 million, $4.8 million and $19.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company’s provision for income taxes resulted in effective tax rates that varied from the statutory federal income tax rate as follows (in thousands): Year Ended December 31, 2022 2021 2020 Expected federal income tax provision at statutory rate $ 102,156 $ 84,833 $ 56,906 State income taxes, net of federal benefit 21,486 21,012 11,409 (Decrease) in valuation allowance (453) (4,995) (4,848) Research credits (17,517) (13,070) (14,322) Excess tax benefit (1,821) (10,933) (21,038) Tax reserves 1,506 (12,787) 4,762 Nondeductible compensation 11,368 10,369 5,949 International restructuring (3,912) 34,854 — Other adjustments 4,191 2,121 5,034 Income tax expense $ 117,004 $ 111,404 $ 43,852 The Company has net operating loss carryforwards for international income tax purposes of approximately $24.9 million that do not expire. The Company has federal net operating loss carryforwards of approximately $95.8 million that begin to expire in 2035, state net operating loss carryforwards with a tax value of approximately $0.4 million that begin to expire in 2033 and state income tax credit carryforwards with a tax value of approximately $10.3 million primarily relating to state research and development credits and the D.C. qualified high technology company tax credit that begin to expire in 2022. The Company realized a cash benefit relating to the use of its tax loss carryforwards of approximately $12.6 million, $14.1 million and $4.8 million in December 31, 2022, 2021 and 2020, respectively. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands): Unrecognized tax benefit as of December 31, 2019 $ 25,467 Increase for current year tax positions 4,213 Increase for prior year tax positions 452 Expiration of the statute of limitation for assessment of taxes (1,259) Unrecognized tax benefit as of December 31, 2020 28,873 Increase for current year tax positions 3,024 Decrease for prior year tax positions (5,353) Decrease for settlements with taxing authorities (9,924) Expiration of the statute of limitation for assessment of taxes (1,866) Unrecognized tax benefit as of December 31, 2021 14,754 Increase for current year tax positions 3,394 Increase for prior year tax positions 330 Expiration of the statute of limitation for assessment of taxes (2,325) Unrecognized tax benefit as of December 31, 2022 $ 16,153 Approximately $16.2 million and $14.8 million of the unrecognized tax benefits as of December 31, 2022 and 2021, respectively, would favorably affect the annual effective tax rate if recognized in future periods. The increase for current year tax positions of $3.4 million and increase for prior year tax positions of $0.3 million for the year ended December 31, 2022 are primarily attributable to research credits. The decrease for expiration of the statute of limitation of $2.3 million for the year ended December 31, 2022 is attributable to research credits and state apportionment reserves. The Company recognized $0.1 million, reversed $0.4 million, and recognized $0.4 million for interest and penalties in its consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020, respectively. The Company had liabilities of $0.7 million, $0.6 million, and $1.0 million for interest and penalties in its consolidated balance sheets as of December 31, 2022, 2021 and 2020, respectively. The Company does not anticipate the amount of the unrecognized tax benefits will change significantly over the next twelve months. The Company is subject to taxation in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company’s federal income tax returns for tax years 2015 and 2019 through 2021 remain open to examination. Most of the Company’s state income tax returns for tax years 2019 through 2021 remain open to examination. For states that have a four-year statute of limitations, the state income tax returns for tax years 2018 through 2021 remain open to examination. The Company’s U.K. income tax return for tax year 2021 remains open to examination. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The following summarizes the Company's significant contractual obligations, including related payments due by period, as of December 31, 2022 (in thousands): Year Ending December 31, Operating lease obligations Long-term debt principal payments Long-term debt principal interest payments 2023 $ 39,015 $ — $ 28,000 2024 36,893 — 28,000 2025 19,302 — 28,000 2026 9,724 — 28,000 2027 7,880 — 28,000 Thereafter 5,480 1,000,000 84,000 Total $ 118,294 $ 1,000,000 $ 224,000 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. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2022 | |
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 primarily includes Europe, Asia-Pacific and Latin America. Management relies on an internal management reporting process that provides revenue and operating segment net income before interest (expense) income, net, other income (expense), 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 EBITDA information by operating segment consists of the following (in thousands): Year Ended December 31, 2022 2021 2020 North America $ 577,242 $ 557,125 $ 410,852 International 5,413 7,856 (4,706) Total EBITDA $ 582,655 $ 564,981 $ 406,146 The reconciliation of net income to EBITDA consists of the following (in thousands): Year Ended December 31, 2022 2021 2020 Net income $ 369,453 $ 292,564 $ 227,128 Amortization of acquired intangible assets in cost of revenues 29,019 28,809 25,675 Amortization of acquired intangible assets in operating expenses 73,560 74,817 62,457 Depreciation and other amortization 29,127 29,018 28,812 Interest (income) expense, net (32,125) 31,621 17,395 Other (income) expense, net (3,383) (3,252) 827 Income tax expense 117,004 111,404 43,852 EBITDA $ 582,655 $ 564,981 $ 406,146 Summarized information by operating segment consists of the following (in thousands): December 31, 2022 2021 Property and equipment, net North America $ 320,209 $ 269,792 International 1,041 1,639 Total property and equipment, net $ 321,250 $ 271,431 Goodwill North America $ 2,149,247 $ 2,145,846 International 165,512 175,169 Total goodwill $ 2,314,759 $ 2,321,015 Assets North America $ 8,146,239 $ 6,976,752 International 256,231 280,119 Total assets $ 8,402,470 $ 7,256,871 Liabilities North America $ 1,486,237 $ 1,502,497 International 46,112 42,702 Total liabilities $ 1,532,349 $ 1,545,199 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDER'S EQUITY Preferred Stock The Company has 2 million shares of preferred stock, $0.01 par value, authorized for issuance. The Board of Directors may issue the preferred stock from time to time as shares of one or more classes or series. Common Stock The Company has 1.2 billion shares of common stock, $0.01 par value, authorized for issuance. Dividends may be declared and paid on the common stock, subject in all cases to the rights and preferences of the holders of preferred stock and authorization by the Board of Directors. In the event of liquidation or winding up of the Company and after the payment of all preferential amounts required to be paid to the holders of any series of preferred stock, any remaining funds shall be distributed among the holders of the issued and outstanding common stock. Common Stock Split At the Company's 2021 Annual Meeting of Stockholders in June 2021, upon the recommendation of the Company's Board of Directors, the Company's stockholders approved the adoption of the Company's Fourth Amended and Restated Certificate of Incorporation, which increased the total number of shares of common stock that the Company is authorized to issue from 60 million to 1.2 billion. The Fourth Amended and Restated Certificate of Incorporation became effective on June 7, 2021. On June 7, 2021, the Board of Directors approved a ten-for-one stock split of the Company's outstanding shares of common stock to be effected in the form of a stock dividend. Each stockholder of record on June 17, 2021 received a dividend of nine additional shares of common stock for each then-held share, distributed after close of trading on June 25, 2021. The par value of the Company's common stock remained $0.01 per share. All applicable share and per-share amounts in the consolidated financial statements and the accompanying notes have been retroactively adjusted to reflect the impact of the stock split. Equity Offerings On September 20, 2022, the Company completed a public equity offering of 10.7 million shares of common stock at an offering price of $70.38 per share. Net proceeds from the public equity offering were approximately $745.7 million, after deducting approximately $4.3 million of underwriting fees, commissions and other stock issuance costs. On May 28, 2020, the Company completed a public equity offering of 26.3 million shares of common stock for $65.50 per share. Net proceeds from the public equity offering were approximately $1.7 billion, after deducting approximately $35 million of underwriting fees, commissions and other stock issuance costs. The Company intends to use the net proceeds from the sale of the securities to fund all or a portion of the costs of any strategic acquisitions it pursues in the future, to finance the growth of its business and for working capital and other general corporate purposes. General corporate purposes may include additions to working capital, capital expenditures, repayment of debt, investments in the Company’s subsidiaries and the repurchase, redemption or retirement of securities, including the Company’s common stock. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The following table sets forth the calculation of basic and diluted net income per share (in thousands except per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net income $ 369,453 $ 292,564 $ 227,128 Denominator: Denominator for basic net income per share — weighted-average outstanding shares 396,284 392,210 380,726 Effect of dilutive securities: Stock options, restricted stock awards and restricted stock units 1,468 1,950 2,540 Denominator for diluted net income per share — weighted-average outstanding shares 397,752 394,160 383,266 Net income per share — basic (1) $ 0.93 $ 0.75 $ 0.60 Net income per share — diluted (1) $ 0.93 $ 0.74 $ 0.59 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. The following table summarizes the shares underlying the unvested performance-based restricted stock and anti-dilutive securities excluded from the basic and diluted earnings per share calculations (in thousands): Year Ended December 31, 2022 2021 2020 Performance-based restricted stock awards (1) 398 415 526 Anti-dilutive securities (1) 966 373 540 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Stock Incentive Plans In April 2007, the Company’s Board of Directors adopted the CoStar Group 2007 Stock Incentive Plan (as amended, the “2007 Plan”), subject to stockholder approval, which was obtained on June 7, 2007. In April 2016, the Company’s Board of Directors adopted the CoStar Group 2016 Stock Incentive Plan (as amended, the “2016 Plan”), subject to stockholder approval, which was obtained on June 9, 2016. All shares of common stock that were authorized for issuance under the 2007 Plan that, as of June 9, 2016, remained available for issuance under the 2007 Plan (excluding shares subject to outstanding awards) were rolled into the 2016 Plan and, as of that date, no shares of common stock were available for new awards under the 2007 Plan. The 2007 Plan continues to govern vested unexercised stock options issued prior to June 9, 2016. Upon the occurrence of a Change of Control, as defined in the 2007 Plan, all outstanding unexercisable options under the 2007 Plan immediately become exercisable. The 2016 Plan provides for the grant of stock options, restricted stock, restricted stock units and stock appreciation rights to officers, employees and directors of the Company and its subsidiaries. Stock options granted under the 2016 Plan may be non-qualified or may qualify as incentive stock options. Except in limited circumstances related to a merger or other acquisition, the exercise price for an option may not be less than the fair market value of the Company’s common stock on the date of grant. The vesting period for each grant of options, restricted stock, restricted stock units and stock appreciation rights under the 2016 Plan is determined by the Board of Directors or a committee thereof and is generally three exercised or settled in vested and nonforfeitable shares) will become authorized and unissued under the 2016 Plan. Pursuant to the terms of the 2016 Plan, all amounts reserved or issued under the plan were adjusted to reflect the Company’s ten-for-one common stock split. Unless terminated sooner, the 2016 Plan will terminate in June 2026, but will continue to govern unexercised and unexpired awards issued under the 2016 Plan prior to that date. Approximately 14.3 million shares were available for future grant under the 2016 Plan as of December 31, 2022. At December 31, 2022, there was approximately $107.4 million of unrecognized compensation cost related to stock incentive plans, net of estimated forfeitures, which the Company expects to recognize over a weighted-average-period of 2.4 years. The income tax benefit realized from stock-based compensation was immaterial, $2.4 million and $20.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. See Notes 2 and 12 for further discussion of stock-based compensation expense and income taxes, respectively. Stock Options Option activity was as follows: Number of Shares (1) Range of Exercise Price (1) Weighted- Average Exercise Price (1) Weighted- Aggregate Outstanding at December 31, 2019 2,756,580 $5.45 - $39.82 $ 26.72 6.98 $ 91,262 Granted 341,000 $66.65 $ 66.65 Exercised (953,130) $19.37 - $39.82 $ 22.95 Canceled or expired (121,350) $34.21 - $66.65 $ 44.31 Outstanding at December 31, 2020 2,023,100 $10.22 - $66.65 $ 34.18 6.99 $ 117,846 Granted 159,000 $91.98 $ 91.98 Exercised (206,000) $20.49 - $39.82 $ 30.78 Outstanding at December 31, 2021 1,976,100 $10.22 - $91.98 $ 39.18 6.24 $ 80,800 Granted 202,100 $67.29 $ 67.29 Exercised — Canceled or expired — Outstanding at December 31, 2022 2,178,200 $10.22 - $91.98 $ 41.79 5.60 $ 79,639 Exercisable at December 31, 2020 1,228,060 $10.22 - $39.82 $ 24.68 6.18 $ 83,204 Exercisable at December 31, 2021 1,473,420 $10.22 - $66.65 $ 29.55 5.59 $ 72,905 Exercisable at December 31, 2022 1,766,070 $10.22 - $91.98 $ 34.40 4.96 $ 76,515 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. The aggregate intrinsic value of outstanding options is calculated as the difference between (i) the closing price of the common stock at the end of the period and (ii) the exercise price of the underlying awards, multiplied by the number of outstanding options as of the end of the period that had an exercise price less than the closing price on that date. No options were exercised in the year ended December 31, 2022. The aggregate intrinsic value of options exercised, determined as of the exercise date, was approximately $11.0 million and $49.0 million for the years ended December 31, 2021 and 2020, respectively. The Company estimated the fair value of each option granted on the date of grant using the Black-Scholes option-pricing model, using the assumptions in the following table: Year Ended December 31, 2022 2021 2020 Dividend yield 0 % 0 % 0 % Expected volatility 31 % 30 % 26 % Risk-free interest rate 1.89 % 0.56 % 1.45 % Expected life (in years) 5 5 5 Weighted-average grant date fair value (1) $ 20.43 $ 25.09 $ 17.21 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. The expected dividend yield is determined based on the Company's past cash dividend history and anticipated future cash dividend payments. The Company has never declared nor paid any dividends on its common stock and does not anticipate paying any dividends on its common stock during the foreseeable future, but intends to retain any earnings for future growth of its business. Expected volatility is calculated based on historical volatility of the daily closing price of the Company's common stock over a period consistent with the expected life of the options granted. The risk-free interest rate is based on the U.S. Treasury rate with terms similar to the expected life of the options granted. The expected life for the options is determined based on multiple factors, including historical employee behavior patterns of exercising options and post-employment termination behavior as well as expected future employee option exercise patterns. The following table summarizes information regarding options outstanding at December 31, 2022: Options Outstanding Options Exercisable Range of Number of Weighted-Average Remaining Contractual Life (in years) Weighted- Number of Weighted- Average Exercise Price $10.22 - $19.93 411,540 2.91 $ 17.62 411,540 $ 17.62 $19.94 - $27.35 350,880 4.16 $ 20.49 350,880 $ 20.49 $27.36 - $37.02 357,010 5.16 $ 34.21 357,010 $ 34.21 $37.03 - $53.24 385,670 6.10 $ 39.82 385,670 $ 39.82 $53.25 - $91.98 673,100 7.95 $ 72.83 260,970 $ 71.79 2,178,200 5.60 $ 41.79 1,766,070 $ 34.40 Restricted Stock Awards The Compensation Committee of the Board of Directors of the Company historically approved grants of restricted common stock to employees and directors of the Company that vest over a specific service period and to executive officers that vest based on the achievement of certain performance conditions, primarily, the achievement of a three-year cumulative revenue goal established at the grant date. The grant of awards with performance conditions supports the Company’s goal of aligning executive incentives with long-term stockholder value and ensuring that executive officers have a continuing stake in the long-term success of the Company. The vesting of restricted common stock is subject to continuing employment requirements. Certain performance-based restricted common stock awards are also subject to a market condition such that the actual number of shares that vest at the end of the respective three-year period is determined based on the Company’s achievement of performance goals and an established Company specific TSR factor relative to the Russell 1000 Index over the same three-year performance period. At the end of the three-year performance period, if the performance condition is achieved at or above the pre-established threshold, the number of shares earned is further adjusted by a TSR payout percentage, which ranges between 80% and 120%, based on the Company’s TSR performance relative to that of the Russell 1000 Index over the respective three-year period. The Company estimates the fair value of its equity awards with both a performance and market condition on the date of grant using a Monte-Carlo simulation valuation model. This pricing model uses multiple simulations to evaluate the probability of achieving the market condition to calculate the fair value of the awards. Expense is only recorded for awards that are expected to vest, net of estimated forfeitures. The assumptions used to estimate the fair value of awards with both a performance and a market condition were as follows: Year Ended December 31, 2022 2021 2020 Dividend yield 0 % 0 % 0 % Expected volatility 34 % 42 % 27 % Risk-free interest rate 1.71 % 0.20 % 1.43 % Expected life (in years) 3 3 3 Weighted-average grant date fair value (1) $ 71.19 $ 99.73 $ 72.69 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. The expected dividend yield is determined based on the Company's past cash dividend history and anticipated future cash dividend payments. The Company has never declared nor paid any dividends on its common stock and does not anticipate paying any dividends on its common stock during the foreseeable future, but intends to retain any earnings for future growth of its business. Expected volatility is calculated based on historical volatility of the daily closing price of the common stock of the companies within the Russell 1000 Index over a period consistent with the expected life of the awards. The risk-free interest rate is based on the U.S. Treasury rate with terms similar to the expected life of the awards. The expected life is consistent with the performance measurement period of the awards. As of December 31, 2022, the Company determined that it was probable that at least the minimum performance goals associated with restricted stock awards with performance and market conditions granted during 2022, 2021 and 2020 would be met by their forfeiture dates. The Company recorded a total of approximately $11.9 million, $8.0 million and $3.7 million of stock-based compensation expense related to restricted stock awards with performance and market conditions for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, the Company expects to record an aggregate stock-based compensation expense of approximately $13.3 million for restricted stock awards with performance and market conditions over the periods 2023, 2024 and 2025. The following table presents unvested restricted stock awards activity for the year ended December 31, 2022: Restricted Stock Awards — without Market Condition Restricted Stock Awards — with Market Condition Number of Weighted-Average Number of Weighted-Average Unvested restricted stock awards at December 31, 2021 1,782,306 $ 66.74 717,600 $ 67.40 Granted 1,277,303 $ 62.15 205,680 $ 71.19 Vested (750,435) $ 59.45 (238,130) $ 42.96 Canceled (247,280) $ 63.15 (64,270) $ 42.96 Unvested restricted stock awards at December 31, 2022 2,061,894 $ 67.15 620,880 $ 80.55 Restricted Stock Units The following table presents unvested restricted stock units activity for the year ended December 31, 2022: Number of Weighted-Average Unvested restricted stock units at December 31, 2021 12,485 $ 71.44 Granted 13,666 $ 60.11 Vested (4,061) $ 66.47 Canceled (530) $ 69.56 Unvested restricted stock units at December 31, 2022 21,560 $ 65.24 Management Stock Purchase Plan The Board of Directors adopted the Company’s Management Stock Purchase Plan in December 2017 with the intent of providing selected key employees of the Company and its subsidiaries, including the Company's executive officers, the opportunity to defer a portion of their cash incentive compensation and to align management and stockholder interests through awards of DSUs under the MSPP and awards of Matching RSUs issued under the Company's 2016 Plan. Under this plan participants are permitted to elect to defer up to 100% of their annual incentive bonus or commissions earned during the year by submitting an irrevocable election in accordance with Section 409A of the Internal Revenue Code, as amended. On the date the incentive bonus or commission would otherwise be paid in cash (typically during the following calendar year), the Company awards the participant DSUs representing the number of shares of common stock with an aggregate fair market value on that date equal to the amount of compensation elected to be deferred under the MSPP. On the same date the DSUs are awarded, the participant receives a grant of Matching RSUs covering the number of shares of common stock equal up to 100% of the DSUs granted. The expense related to the DSUs is recognized on a straight-line basis during the period that the related incentive bonus or commission is earned. The Company granted 75,479 and 40,960 DSUs during the years 2022 and 2021, respectively. The expense related to the Matching RSUs is recognized over the four The following tables presents the Matching RSU activity for the year ended December 31, 2022: Number of Matching RSU Weighted-Average Unvested MSPP restricted stock units at December 31, 2021 116,090 $ 62.66 Granted 75,479 $ 57.84 Vested — Canceled (11,138) $ 64.66 Unvested MSPP restricted stock units at December 31, 2022 180,431 $ 60.52 Employee 401(k) Plan The Company maintains a 401(k) Plan as a defined contribution retirement plan for all eligible employees. The 401(k) Plan provides for tax-deferred contributions of employees’ salaries, limited to a maximum annual amount as established by the IRS. In addition to the traditional 401(k), effective January 1, 2015, eligible employees have the option of making an after-tax contribution to a Roth 401(k) plan or a combination of both. In each of 2022, 2021 and 2020, the Company matched 100% of employee contributions up to a maximum of 4% of total compensation. Amounts contributed to the 401(k) Plan by the Company to match employee contributions for the years ended December 31, 2022, 2021 and 2020 were approximately $21.5 million, $17.6 million and $15.4 million, respectively. The Company had no administrative expenses in connection with the 401(k) Plan for each of the years ended December 31, 2022, 2021 and 2020. Employee Pension Plan The Company maintains a GPP Plan for all eligible employees in the Company’s U.K. offices. The GPP Plan is a defined contribution plan. Employees are eligible to contribute a portion of their salaries, subject to a maximum annual amount as established by Her Majesty's Revenue and Customs. In each of 2022, 2021 and 2020, the Company's matching contribution was based on the percentage contributed by the employee, up to a maximum of 6% of total compensation. Amounts contributed to the GPP Plan by the Company to match employee contributions for the years ended December 31, 2022, 2021 and 2020, were approximately $1.0 million, $0.9 million and $0.9 million, respectively. Registered Retirement Savings Plan As of January 1, 2015, the Company introduced a RRSP for all eligible employees in the Company’s Canadian offices. In each of 2022, 2021 and 2020, the Company matched 100% of employee contributions up to a maximum of 4% of total compensation. Amounts contributed to the RRSP by the Company to match employee contributions were approximately $0.1 million for each of the years ended December 31, 2022, 2021 and 2020. Employee Stock Purchase Plan |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated all events through the date of issuance of the consolidated financial statements and have concluded that there are no recognized or non-recognized subsequent events that require disclosure. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The 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 EstimatesThe 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 credit losses, the useful lives and recoverability of long-lived and intangible assets, goodwill, income taxes, 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, real estate agents and brokers and landlords, in each case, typically through a fixed monthly fee for its subscription-based services. Other subscription-based services include (i) real estate and lease management solutions to commercial customers, real estate investors and lenders, (ii) access to applications to manage workflow and advertising and marketing services for residential real estate agents through our acquisitions of Homes.com and Homesnap, (iii) benchmarking and analytics for the hospitality industry and (iv) market research, portfolio and debt analysis, management and reporting capabilities. Subscription contract rates are generally based on the number of sites, number of users, organization size, the client’s business focus, geography, the number of properties reported on or analyzed, 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 typically renew automatically, and a majority have a term of at least one year. Revenue from our subscription-based contracts was approximately 93%, 93% and 95% of total revenue for the years ended December 31, 2022, 2021 and 2020, respectively. The Company also derives revenues from transaction-based services including: (i) an online auction platform for commercial real estate through Ten-X, (ii) providing online tenant applications, including background and credit checks, and rental payment processing and (iii) ancillary products and services that sold on an ad hoc basis. 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 obligations. 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. Revenues from transaction-based services are recognized when the promised product or services are delivered, which, in the case of Ten-X auctions, is at the time of a successful closing for the sale of the property. In limited circumstances, the Company's contracts with customers include promises to transfer multiple services, such as contracts for its subscription-based services and professional services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct, which involves the determination of the standalone selling price for each distinct performance obligation. Deferred revenue results from amounts billed in advance to customers or cash received from customers in advance of the Company's fulfillment of its performance obligation(s) and is recognized as those obligations are satisfied. 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 See Note 3 for further discussion of the Company's revenue recognition. |
Cost of Revenues | Cost of Revenues Cost of revenues principally consists of salaries, benefits, bonuses, stock-based compensation expenses and other indirect costs for the Company's researchers who collect and analyze the real estate data that is the basis for the Company's information, analytics and online marketplaces and for employees that support these products. Additionally, cost of revenues includes the cost of data from third-party data sources and costs related to advertising purchased on behalf of customers, 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 certain other intangible assets. |
Foreign Currency Translation | Foreign Currency Translation The Company’s reporting currency is the U.S. dollar. The functional currency for the majority of its operations is the local currency, with the exception of certain international locations for which the functional currency is the British Pound. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect as of the balance sheet date. 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 |
Advertising Costs | Advertising CostsThe Company expenses advertising costs as incurred. Advertising costs include digital marketing, television, radio, print and other media advertising |
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 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. The Company has elected to record the GILTI under the current-period cost method. See Note 12 for further discussion of income taxes. |
Net Income 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. The Company's potentially dilutive securities include outstanding stock options, unvested stock-based awards, which include restricted stock awards that vest over a specific service period, restricted stock awards with a performance and market condition, restricted stock units and Matching RSUs awarded under the MSPP. Shares underlying unvested restricted stock awards that vest based on a performance and market condition 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. 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. See Note 16 for further discussion of the Company's calculation of net income per share. |
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 and the fair value of such equity instruments is recognized as expense in the consolidated statements of operations. For stock-based awards that vest over a specific service period, 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 service period of the awards, net of an estimated forfeiture rate. For equity instruments that vest based on achievement of both a performance and market condition, |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Concentration of Credit Risk and Financial Instruments | Concentration of Credit Risk and Financial Instruments The Company’s customer base creates a lack of dependence on any individual customer that mitigates the risk of nonpayment of the Company’s accounts receivable. No single customer accounted for more than 5% of the Company’s revenues for each of the years ended December 31, 2022, 2021 and 2020. The carrying amount of the accounts receivable approximates the net realizable value. |
Allowance for Credit Losses | Allowance for Credit Losses The Company maintains an allowance for credit losses to cover its current expected credit losses on its trade receivables and contract assets arising from the failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables and historical write-off trends. Based on the Company’s experience, the customer's delinquency status, which is analyzed periodically, is the strongest indicator of the credit quality of the underlying trade receivables. The Company’s policy is to write-off trade receivables when they are deemed uncollectible. A majority of the Company's trade receivables are less than 365 days outstanding. Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on five portfolio segments. The determination of portfolio segments is based primarily on the qualitative consideration of the nature of the Company’s business operations and the characteristics of the underlying trade receivables, as follows: • CoStar Portfolio Segment - The CoStar portfolio segment consists of two classes of trade receivables based on geographical location: North America and International. • Information Services Portfolio Segment - The Information Services portfolio segment consists of four classes of trade receivables: CoStar Real Estate Manager; Information Services, North America; STR, North America; and STR, International. • Multifamily Portfolio Segment - The Multifamily portfolio segment consists of one class of trade receivables. • LoopNet Portfolio Segment - The LoopNet portfolio segment consists of one class of trade receivables. • Other Marketplaces Portfolio Segment - The Other Marketplaces portfolio segment consists of two classes of trade receivables: Ten-X and other marketplaces. The majority of Residential revenue is e-commerce based and does not result in accounts receivable. Residential accounts receivable and the related allowance for credit losses are not material. See Note 4 for further discussion of the Company’s accounting for allowance for credit losses. |
Leases | Leases The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at the commencement of the arrangement, at which time the Company also measures and recognizes an 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 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 deemed 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, offset by lease incentives. Upon commencement, the initial ROU asset also includes any lease prepayments. 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 and is determined at lease commencement and is subsequently reassessed upon a modification to the lease arrangement. Lease costs related to the Company's operating leases are generally recognized as a single ratable lease cost over the lease term. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation and amortization. All repairs and maintenance costs are expensed as incurred. Costs related to acquisition of additional aircraft components or the replacement of existing aircraft components are capitalized and depreciated over the estimated useful life of the aircraft or the added or replaced component, whichever is less. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives of the assets: Buildings Twenty thirty-nine Land Indefinite Aircrafts Ten twenty Furniture and office equipment Five ten Vehicles Five years Computer hardware and software Three five Leasehold improvements Shorter of lease terms or useful life Qualifying internal-use software costs incurred during the application development stage, which consist primarily of internal product development costs, outside services and purchased software license costs are capitalized and amortized over the estimated useful life of the asset. All other costs are expensed as incurred. In the fourth quarter of 2021, the Company began removing fully depreciated property and equipment from the cost and accumulated depreciation amounts disclosed. In January 2021, the Company purchased an office building located in Richmond, Virginia, together with the land and assumed an existing lease for a purchase price of $131 million, inclusive of property taxes, title insurance and other transaction costs. The purchase of the Richmond building was accounted for as an asset acquisition, including an intangible asset for the assumed lease. The net impact from the lease arrangement is recorded in other income (expense), net on the consolidated statements of operations and was not material. The Company has broken ground on an expansion of its campus in Richmond, Virginia and acquired a small office building near the campus to facilitate employee staging while the expansion is being constructed. The capitalized spending associated with these efforts is recorded in the purchase of Richmond assets line of the consolidated statements of cash flows. |
Long-Lived Assets, Intangible Assets and Goodwill | 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 the 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. During 2022, the Company ceased using leased properties in California and Maryland as part of efforts to centralize our workforce which resulted in an impairment charge of $9 million for lease ROU assets and property and equipment related to abandoned leases. The impairment was recorded in the general and administrative expense line of the consolidated statements of operations. The leases related to the North America segment. Acquired technology and data, customer base assets, trade names and other intangible assets are related to the Company’s acquisitions. Acquired technology and data is amortized on a straight-line basis over periods ranging from 2 years to 7 years. Acquired intangible assets characterized as customer base assets consist of acquired customer contracts and the related customer relationships and are amortized over periods ranging from 3 years to 13 years. Acquired customer bases are amortized on an accelerated or straight-line basis depending on the expected economic benefit of the intangible asset. Acquired trade names and other intangible assets are amortized on a straight-line basis over periods ranging from 3 years to 15 years. In the fourth quarter of 2021, the Company began removing fully amortized intangible assets from the cost and accumulated amortization amounts disclosed. |
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. The Company made a policy election to classify deferred issuance costs on the revolving credit facility as a long-term asset on its consolidated balance sheets. 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 11 for further discussion of the Company's accounting for its outstanding debt, revolving credit facility and related issuance costs. |
Business Combinations | Business Combinations The Company generally allocates the purchase consideration to the tangible assets acquired and liabilities assumed and intangible assets acquired based on their estimated fair values. The purchase price is generally determined based on the fair value of the assets transferred, liabilities assumed 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. The Company applies significant assumptions, estimates and judgments in determining the fair value of assets acquired and liabilities assumed on the acquisition date, 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In 2021, the Company adopted ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This guidance requires contract assets and liabilities acquired or assumed in an acquisition be measured in accordance with the accounting framework for revenue from contracts with customers as if the Company had originated the acquired contract. This is an exception to the general requirement to measure assets acquired and liabilities assumed at their fair value on the acquisition date. The Company applied this revised guidance to all acquisitions in the year ended December 31, 2021. The application of this guidance to contract assets and contract liabilities acquired or assumed in connection with the Company's acquisitions for the year ended December 31, 2021 did not have a material impact on the Company's consolidated financial statements and related disclosures. Recent Accounting Pronouncements Not Yet Adopted On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASC 848 contains optional expedients and exceptions for applying GAAP to debt, contracts, hedging relationships and other transactions affected by reference rate reform. The provisions of ASC 848 must be applied to all contracts that are accounted for under a Topic, Subtopic or Industry Subtopic for all transactions other than derivatives, which may be applied at a hedging relationship level. Originally, the guidance was effective for fiscal years beginning after January 1, 2021, including interim periods within those fiscal years. However, in response to the deferral of the cessation date for certain overnight LIBOR measures, the FASB issued ASU 2022-06 on December 21, 2022, which extends the sunset date of Topic 848 to December 31, 2024. The Company's 2020 Credit Agreement provides for a $750 million revolving credit facility and a letter of credit sublimit of $20 million, with interest rates benchmarked to LIBOR. As of December 31, 2022, no amounts were issued or drawn under this facility. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures. In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. This ASU eliminates prior guidance on troubled debt restructurings for creditors that have adopted ASU 2016-13, Measurement of Credit Losses in Financial Statements, |
Commitments and Contingencies | Currently, and from time to time, the Company is involved in litigation incidental to the conduct of its business. 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 effect on the Company's consolidated financial position, future results of operations or liquidity. Legal defense costs are expensed as incurred. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss, net of tax, were as follows (in thousands): As of December 31, 2022 2021 Foreign currency translation adjustment $ (29,075) $ (5,758) Total accumulated other comprehensive loss $ (29,075) $ (5,758) |
Schedule of Stock-Based Compensation Expense for Stock Options and Restricted Stock | Stock-based compensation expense for stock options, restricted stock awards and restricted stock units issued under equity incentive plans, stock purchases under the ESPP, DSUs and Matching RSUs awarded under the MSPP included in the Company’s consolidated statements of operations were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenues $ 12,579 $ 11,165 $ 10,879 Selling and marketing (excluding customer base amortization) 7,797 6,314 5,194 Software development 12,987 12,544 10,325 General and administrative 41,844 33,686 27,706 Total stock-based compensation expense (1) $ 75,207 $ 63,709 $ 54,104 __________________________ (1) Stock-based compensation expense for the year ended December 31, 2020 includes $0.7 million of expense related to the cash settlement of stock options in connection with the acquisition of Ten-X. |
Schedule of Cash and Cash Equivalents | Cash and cash equivalents were $5.0 billion and $3.8 billion as of December 31, 2022 and 2021, respectively. The Company had no restricted cash as of December 31, 2022 and 2021. |
Restrictions on Cash and Cash Equivalents | Cash and cash equivalents were $5.0 billion and $3.8 billion as of December 31, 2022 and 2021, respectively. The Company had no restricted cash as of December 31, 2022 and 2021. |
Schedule of Property and Equipment | Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives of the assets: Buildings Twenty thirty-nine Land Indefinite Aircrafts Ten twenty Furniture and office equipment Five ten Vehicles Five years Computer hardware and software Three five Leasehold improvements Shorter of lease terms or useful life Property and equipment consists of the following (in thousands): December 31, 2022 2021 Leasehold improvements $ 108,901 $ 75,634 Furniture, office equipment and vehicles 52,610 47,540 Computer hardware and software 43,830 30,179 Aircrafts 44,209 68,670 Land 52,227 38,774 Buildings 105,060 96,496 Property and equipment, gross 406,837 357,293 Accumulated depreciation and amortization (85,587) (85,862) Property and equipment, net $ 321,250 $ 271,431 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company provides information, analytics and online marketplaces to the commercial real estate industry, hospitality industry, residential industry and related professionals. The revenues by operating segment and type of service consist of the following (in thousands): Year Ended December 31, 2022 2021 2020 North America International Total North America International Total North America International Total CoStar $ 800,183 $ 36,797 $ 836,980 $ 686,948 $ 35,873 $ 722,821 $ 634,205 $ 30,530 $ 664,735 Information services 124,951 32,431 157,382 113,723 27,932 141,655 104,117 25,953 130,070 Multifamily 745,388 — 745,388 678,680 — 678,680 598,555 — 598,555 LoopNet (1) 223,758 7,183 230,941 204,816 2,695 207,511 179,371 434 179,805 Residential (1) 73,747 — 73,747 74,583 — 74,583 — — — Other Marketplaces (1) 137,961 — 137,961 118,885 — 118,885 85,854 — 85,854 Total revenues $ 2,105,988 $ 76,411 $ 2,182,399 $ 1,877,635 $ 66,500 $ 1,944,135 $ 1,602,102 $ 56,917 $ 1,659,019 (1) As of September 30, 2021, Commercial Property and Land revenue has been further disaggregated into LoopNet, Residential and Other Marketplaces. Prior period amounts have been adjusted to reflect this presentation. |
Contract With Customer, Asset and Liability | Changes in deferred revenue for the period were as follows (in thousands): Balance at December 31, 2021 (1) $ 96,724 Revenue recognized in the current period from the amounts in the beginning balance (93,816) New deferrals, net of amounts recognized in the current period 102,410 Effects of foreign currency (1,536) Balance at December 31, 2022 (2) $ 103,782 __________________________ (1) Deferred revenue was comprised of $95.5 million of current liabilities and $1.2 million of noncurrent liabilities classified within lease and other long-term liabilities on the Company’s consolidated balance sheet as of December 31, 2021. (2) Deferred revenue was comprised of $103.6 million of current liabilities and $0.2 million of noncurrent liabilities classified within lease and other long-term liabilities on the Company’s consolidated balance sheet as of December 31, 2022. This balance includes $1.8 million of net new deferrals recognized in connection with business acquisitions made in 2022. See Note 5 for further discussion of acquisitions. |
Schedule of Commissions Expense | Commissions expense activity for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Commissions incurred $ 162,126 $ 117,391 $ 97,183 Commissions capitalized in the current period (116,796) (72,038) (64,355) Amortization of deferred commissions costs 76,082 63,391 60,516 Total commissions expense $ 121,412 $ 108,744 $ 93,344 |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Credit Loss [Abstract] | |
Schedule of Financing Receivable, Allowance for Credit Loss | The following tables detail the activity related to the allowance for credit losses for trade receivables by portfolio segment (in thousands): Year Ended December 31, 2022 CoStar Information services Multifamily LoopNet Other Marketplaces Total Beginning balance at December 31, 2021 $ 5,380 $ 1,820 $ 3,393 $ 1,968 $ 813 $ 13,374 Current-period provision (release) for expected credit losses 9,168 (557) 5,813 3,807 78 18,309 Write-offs charged against the allowance, net of recoveries and other (10,038) (212) (4,859) (4,379) — (19,488) Ending balance at December 31, 2022 $ 4,510 $ 1,051 $ 4,347 $ 1,396 $ 891 $ 12,195 Year Ended December 31, 2021 CoStar Information services Multifamily LoopNet Other Marketplaces Total Beginning balance at December 31, 2020 $ 5,531 $ 2,739 $ 4,387 $ 1,667 $ 786 $ 15,110 Current-period provision (release) for expected credit losses 5,699 (392) 3,057 2,564 — 10,928 Write-offs charged against the allowance, net of recoveries and other (5,850) (527) (4,051) (2,263) 27 (12,664) Ending balance at December 31, 2021 $ 5,380 $ 1,820 $ 3,393 $ 1,968 $ 813 $ 13,374 Year Ended December 31, 2020 CoStar Information services Multifamily LoopNet Other Marketplaces Total Beginning balance at December 31, 2019 $ 1,264 $ 624 $ 1,195 $ 576 $ 889 $ 4,548 Current-period provision for expected credit losses 11,622 2,649 7,644 3,213 84 25,212 Write-offs charged against the allowance, net of recoveries and other (7,355) (534) (4,452) (2,122) (187) (14,650) Ending balance at December 31, 2020 $ 5,531 $ 2,739 $ 4,387 $ 1,667 $ 786 $ 15,110 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [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: May 24, 2021 Cash and cash equivalents $ — Accounts receivable 1,798 Lease right-of-use assets 371 Goodwill 91,875 Intangible assets 53,400 Deferred tax assets 7,862 Lease liabilities (371) Deferred revenue (1,521) Other assets and liabilities (1,239) Fair value of identifiable net assets acquired $ 152,175 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: Cash, cash equivalents and restricted cash $ 10,225 Accounts receivable 662 Lease right-of-use assets 3,437 Goodwill 184,371 Intangible assets 67,000 Deferred tax assets, net (2,778) Lease liabilities (3,375) Deferred revenue (4,000) Other assets and liabilities (5,188) Fair value of identifiable net assets acquired $ 250,354 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: Cash and cash equivalents $ 3,290 Accounts receivable 131 Lease right-of-use assets 4,945 Goodwill 134,322 Intangible assets 58,000 Lease liabilities (4,945) Deferred tax liabilities, net (2,981) Other assets and liabilities (5,047) Fair value of identifiable net assets acquired $ 187,715 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table summarizes the fair values (in thousands) of the identifiable intangible assets acquired in the Homes.com Acquisition included in the Company's North America operating segment, their related estimated useful lives (in years) and their respective amortization methods: Estimated Fair Value Estimated Useful Life Amortization Method Customer base $ 32,000 8 Accelerated Trade name 21,000 15 Straight-line Technology 400 2 Straight-line Total intangible assets $ 53,400 The following table summarizes the fair values (in thousands) of the identifiable intangible assets included in the Company's North America operating segment, their related estimated useful lives (in years) and their respective amortization methods: Estimated Fair Value Estimated Useful Life Amortization Method Customer base $ 45,000 10 Accelerated Trade name 7,000 10 Straight-line Technology 15,000 6 Straight-line Total intangible assets $ 67,000 The following table summarizes the fair values (in thousands) of the identifiable intangible assets included in the Company's North America operating segment, their related estimated useful lives (in years) and their respective amortization methods: Estimated Fair Value Estimated Useful Life Amortization Method Customer base $ 46,000 6 Accelerated Technology 11,000 5 Straight-line Other intangible assets 1,000 2 Straight-line Total intangible assets $ 58,000 |
Business Acquisition, Pro Forma Information | The unaudited pro forma financial information, in the aggregate, was as follows (in thousands, except per share data): Year Ended 2021 2020 Revenue $ 1,962,102 $ 1,758,612 Net income $ 286,718 $ 197,994 Net income per share - basic $ 0.74 $ 0.52 Net income per share - diluted $ 0.73 $ 0.51 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Components of Lease Expense | Lease costs related to the Company's operating leases included in the consolidated statements of operations were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease costs: Cost of revenues $ 8,428 $ 10,110 $ 11,632 Software development 7,201 6,947 6,020 Selling and marketing (excluding customer base amortization) 12,642 11,911 10,356 General and administrative 5,360 5,911 4,827 Total operating lease costs $ 33,631 $ 34,879 $ 32,835 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to operating leases was as follows (in thousands): Year Ended December 31, Balance Balance Sheet Location 2022 2021 Operating lease liabilities $ 118,294 $ 134,150 Less: imputed interest (6,238) (8,512) Present value of lease liabilities 112,056 125,638 Less: current portion of lease liabilities Lease liabilities 36,049 26,268 Long-term lease liabilities Lease and other long-term liabilities $ 76,007 $ 99,370 Weighted-average remaining lease term in years 3.6 4.0 Weighted-average discount rate 3.1 % 3.1 % |
Schedule of Supplemental Cash Flow Information for Leases | Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 41,550 $ 37,298 $ 37,006 ROU assets obtained in exchange for lease obligations: Operating leases $ 19,967 $ 34,247 $ 19,746 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives of the assets: Buildings Twenty thirty-nine Land Indefinite Aircrafts Ten twenty Furniture and office equipment Five ten Vehicles Five years Computer hardware and software Three five Leasehold improvements Shorter of lease terms or useful life Property and equipment consists of the following (in thousands): December 31, 2022 2021 Leasehold improvements $ 108,901 $ 75,634 Furniture, office equipment and vehicles 52,610 47,540 Computer hardware and software 43,830 30,179 Aircrafts 44,209 68,670 Land 52,227 38,774 Buildings 105,060 96,496 Property and equipment, gross 406,837 357,293 Accumulated depreciation and amortization (85,587) (85,862) Property and equipment, net $ 321,250 $ 271,431 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2020 $ 2,085,494 $ 150,505 $ 2,235,999 Acquisitions, including measurement period adjustments (1) 60,352 27,441 87,793 Effect of foreign currency translation — (2,777) (2,777) Goodwill, December 31, 2021 2,145,846 175,169 2,321,015 Acquisitions, including measurement period adjustments (2) 3,401 7,095 10,496 Effect of foreign currency translation — (16,752) (16,752) Goodwill, December 31, 2022 $ 2,149,247 $ 165,512 $ 2,314,759 __________________________ (1) North America goodwill for the year ended December 31, 2021 includes goodwill recorded in connection with the acquisition of Homes.com of $88.5 million, offset by measurement period adjustments of $1.4 million for Ten-X and $26.7 million for Homesnap recorded during the year ended December 31, 2021 primarily related to the measurement of the fair value of Homesnap customer relationships in the first quarter of 2021. International goodwill recorded in connection with the acquisition of BureauxLocaux was $27.4 million. See Note 5 for further discussion. (2) North America goodwill recorded during the year ended December 31, 2022 relates to a measurement period adjustment for income taxes for Homes.com of $3.4 million. International goodwill recorded in connection with the acquisition of Business Immo was $7.1 million. |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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): December 31, Weighted- Average 2022 2021 Acquired technology and data $ 40,422 $ 41,979 5 Accumulated amortization (20,693) (15,333) Acquired technology and data, net 19,729 26,646 Acquired customer base 464,242 569,666 10 Accumulated amortization (287,051) (319,039) Acquired customer base, net 177,191 250,627 Acquired trade names and other intangible assets 247,361 262,136 13 Accumulated amortization (114,975) (103,747) Acquired trade names and other intangible assets, net 132,386 158,389 Intangible assets, net $ 329,306 $ 435,662 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The table below presents the components of outstanding debt (in thousands): December 31, 2022 December 31, 2021 2.800% Senior Notes due July 15, 2030 $ 1,000,000 $ 1,000,000 2020 Credit Agreement, due July 1, 2025 — — Total face amount of long-term debt 1,000,000 1,000,000 Senior notes unamortized discount and issuance costs (10,790) $ (12,056) Long-term debt, net $ 989,210 $ 987,944 |
Schedule of Interest Expense | For the years ended December 31, 2022, 2021 and 2020, the Company recognized interest expense as follows (in thousands): Year Ended 2022 2021 2020 Interest on outstanding borrowings $ 28,000 $ 28,000 $ 18,509 Amortization of Senior Notes discount and issuance costs 2,365 2,327 1,658 Commitment fees and other 1,960 1,989 1,627 Total interest expense $ 32,325 $ 32,316 $ 21,794 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The components of the provision for income taxes attributable to operations consist of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current: Federal $ 116,312 $ 61,290 $ 43,461 State 31,231 24,618 11,726 Foreign 664 1,331 195 Total current 148,207 87,239 55,382 Deferred: Federal (20,455) 22,859 (9,599) State (9,582) 8,467 (926) Foreign (1,166) (7,161) (1,005) Total deferred (31,203) 24,165 (11,530) Total provision for income taxes $ 117,004 $ 111,404 $ 43,852 |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities consist of the following (in thousands): December 31, 2022 2021 Deferred tax assets: Allowance for credit losses $ 3,373 $ 3,601 Accrued compensation 4,590 3,913 Stock compensation 20,427 18,956 Net operating losses 26,794 45,835 Accrued reserve and other 6,768 4,134 Lease liabilities 26,446 28,306 Capitalized research and development costs 45,351 — Research and development credits 6,073 5,812 Total deferred tax assets, prior to valuation allowance 139,822 110,557 Valuation allowance (5,241) (5,694) Total deferred tax assets, net of valuation allowance 134,581 104,863 Deferred tax liabilities: Deferred commission costs, net (36,112) (25,700) Lease right-of-use assets (18,217) (22,574) Prepaid expenses (3,206) (2,569) Property and equipment, net (25,691) (21,827) Intangible assets, net (117,835) (125,815) Total deferred tax liabilities (201,061) (198,485) Net deferred tax liabilities $ (66,480) $ (93,622) |
Schedule of Effective Income Tax Rate Reconciliation | The Company’s provision for income taxes resulted in effective tax rates that varied from the statutory federal income tax rate as follows (in thousands): Year Ended December 31, 2022 2021 2020 Expected federal income tax provision at statutory rate $ 102,156 $ 84,833 $ 56,906 State income taxes, net of federal benefit 21,486 21,012 11,409 (Decrease) in valuation allowance (453) (4,995) (4,848) Research credits (17,517) (13,070) (14,322) Excess tax benefit (1,821) (10,933) (21,038) Tax reserves 1,506 (12,787) 4,762 Nondeductible compensation 11,368 10,369 5,949 International restructuring (3,912) 34,854 — Other adjustments 4,191 2,121 5,034 Income tax expense $ 117,004 $ 111,404 $ 43,852 |
Schedule of Unrecognized Tax Benefits | The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands): Unrecognized tax benefit as of December 31, 2019 $ 25,467 Increase for current year tax positions 4,213 Increase for prior year tax positions 452 Expiration of the statute of limitation for assessment of taxes (1,259) Unrecognized tax benefit as of December 31, 2020 28,873 Increase for current year tax positions 3,024 Decrease for prior year tax positions (5,353) Decrease for settlements with taxing authorities (9,924) Expiration of the statute of limitation for assessment of taxes (1,866) Unrecognized tax benefit as of December 31, 2021 14,754 Increase for current year tax positions 3,394 Increase for prior year tax positions 330 Expiration of the statute of limitation for assessment of taxes (2,325) Unrecognized tax benefit as of December 31, 2022 $ 16,153 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Liability, Maturity | The following summarizes the Company's significant contractual obligations, including related payments due by period, as of December 31, 2022 (in thousands): Year Ending December 31, Operating lease obligations Long-term debt principal payments Long-term debt principal interest payments 2023 $ 39,015 $ — $ 28,000 2024 36,893 — 28,000 2025 19,302 — 28,000 2026 9,724 — 28,000 2027 7,880 — 28,000 Thereafter 5,480 1,000,000 84,000 Total $ 118,294 $ 1,000,000 $ 224,000 |
Schedule of Maturities of Long-term Debt | The following summarizes the Company's significant contractual obligations, including related payments due by period, as of December 31, 2022 (in thousands): Year Ending December 31, Operating lease obligations Long-term debt principal payments Long-term debt principal interest payments 2023 $ 39,015 $ — $ 28,000 2024 36,893 — 28,000 2025 19,302 — 28,000 2026 9,724 — 28,000 2027 7,880 — 28,000 Thereafter 5,480 1,000,000 84,000 Total $ 118,294 $ 1,000,000 $ 224,000 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Summarized EBITDA Information by Operating Segment | Summarized EBITDA information by operating segment consists of the following (in thousands): Year Ended December 31, 2022 2021 2020 North America $ 577,242 $ 557,125 $ 410,852 International 5,413 7,856 (4,706) Total EBITDA $ 582,655 $ 564,981 $ 406,146 |
Reconciliation of Net Income to EBITDA | The reconciliation of net income to EBITDA consists of the following (in thousands): Year Ended December 31, 2022 2021 2020 Net income $ 369,453 $ 292,564 $ 227,128 Amortization of acquired intangible assets in cost of revenues 29,019 28,809 25,675 Amortization of acquired intangible assets in operating expenses 73,560 74,817 62,457 Depreciation and other amortization 29,127 29,018 28,812 Interest (income) expense, net (32,125) 31,621 17,395 Other (income) expense, net (3,383) (3,252) 827 Income tax expense 117,004 111,404 43,852 EBITDA $ 582,655 $ 564,981 $ 406,146 |
Summarized Information by Operating Segment, Assets and Liabilities | Summarized information by operating segment consists of the following (in thousands): December 31, 2022 2021 Property and equipment, net North America $ 320,209 $ 269,792 International 1,041 1,639 Total property and equipment, net $ 321,250 $ 271,431 Goodwill North America $ 2,149,247 $ 2,145,846 International 165,512 175,169 Total goodwill $ 2,314,759 $ 2,321,015 Assets North America $ 8,146,239 $ 6,976,752 International 256,231 280,119 Total assets $ 8,402,470 $ 7,256,871 Liabilities North America $ 1,486,237 $ 1,502,497 International 46,112 42,702 Total liabilities $ 1,532,349 $ 1,545,199 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
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): Year Ended December 31, 2022 2021 2020 Numerator: Net income $ 369,453 $ 292,564 $ 227,128 Denominator: Denominator for basic net income per share — weighted-average outstanding shares 396,284 392,210 380,726 Effect of dilutive securities: Stock options, restricted stock awards and restricted stock units 1,468 1,950 2,540 Denominator for diluted net income per share — weighted-average outstanding shares 397,752 394,160 383,266 Net income per share — basic (1) $ 0.93 $ 0.75 $ 0.60 Net income per share — diluted (1) $ 0.93 $ 0.74 $ 0.59 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. |
Schedule of Anti-Dilutive Securities Excluded From Computation of Earnings Per Share | The following table summarizes the shares underlying the unvested performance-based restricted stock and anti-dilutive securities excluded from the basic and diluted earnings per share calculations (in thousands): Year Ended December 31, 2022 2021 2020 Performance-based restricted stock awards (1) 398 415 526 Anti-dilutive securities (1) 966 373 540 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
Schedule of Option Activity | Option activity was as follows: Number of Shares (1) Range of Exercise Price (1) Weighted- Average Exercise Price (1) Weighted- Aggregate Outstanding at December 31, 2019 2,756,580 $5.45 - $39.82 $ 26.72 6.98 $ 91,262 Granted 341,000 $66.65 $ 66.65 Exercised (953,130) $19.37 - $39.82 $ 22.95 Canceled or expired (121,350) $34.21 - $66.65 $ 44.31 Outstanding at December 31, 2020 2,023,100 $10.22 - $66.65 $ 34.18 6.99 $ 117,846 Granted 159,000 $91.98 $ 91.98 Exercised (206,000) $20.49 - $39.82 $ 30.78 Outstanding at December 31, 2021 1,976,100 $10.22 - $91.98 $ 39.18 6.24 $ 80,800 Granted 202,100 $67.29 $ 67.29 Exercised — Canceled or expired — Outstanding at December 31, 2022 2,178,200 $10.22 - $91.98 $ 41.79 5.60 $ 79,639 Exercisable at December 31, 2020 1,228,060 $10.22 - $39.82 $ 24.68 6.18 $ 83,204 Exercisable at December 31, 2021 1,473,420 $10.22 - $66.65 $ 29.55 5.59 $ 72,905 Exercisable at December 31, 2022 1,766,070 $10.22 - $91.98 $ 34.40 4.96 $ 76,515 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. |
Fair Value Assumption for Options Granted | The Company estimated the fair value of each option granted on the date of grant using the Black-Scholes option-pricing model, using the assumptions in the following table: Year Ended December 31, 2022 2021 2020 Dividend yield 0 % 0 % 0 % Expected volatility 31 % 30 % 26 % Risk-free interest rate 1.89 % 0.56 % 1.45 % Expected life (in years) 5 5 5 Weighted-average grant date fair value (1) $ 20.43 $ 25.09 $ 17.21 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. Year Ended December 31, 2022 2021 2020 Dividend yield 0 % 0 % 0 % Expected volatility 34 % 42 % 27 % Risk-free interest rate 1.71 % 0.20 % 1.43 % Expected life (in years) 3 3 3 Weighted-average grant date fair value (1) $ 71.19 $ 99.73 $ 72.69 (1) Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. |
Summarized Information Regarding Options Outstanding | The following table summarizes information regarding options outstanding at December 31, 2022: Options Outstanding Options Exercisable Range of Number of Weighted-Average Remaining Contractual Life (in years) Weighted- Number of Weighted- Average Exercise Price $10.22 - $19.93 411,540 2.91 $ 17.62 411,540 $ 17.62 $19.94 - $27.35 350,880 4.16 $ 20.49 350,880 $ 20.49 $27.36 - $37.02 357,010 5.16 $ 34.21 357,010 $ 34.21 $37.03 - $53.24 385,670 6.10 $ 39.82 385,670 $ 39.82 $53.25 - $91.98 673,100 7.95 $ 72.83 260,970 $ 71.79 2,178,200 5.60 $ 41.79 1,766,070 $ 34.40 |
Unvested Restricted Stock Awards Activity | The following table presents unvested restricted stock awards activity for the year ended December 31, 2022: Restricted Stock Awards — without Market Condition Restricted Stock Awards — with Market Condition Number of Weighted-Average Number of Weighted-Average Unvested restricted stock awards at December 31, 2021 1,782,306 $ 66.74 717,600 $ 67.40 Granted 1,277,303 $ 62.15 205,680 $ 71.19 Vested (750,435) $ 59.45 (238,130) $ 42.96 Canceled (247,280) $ 63.15 (64,270) $ 42.96 Unvested restricted stock awards at December 31, 2022 2,061,894 $ 67.15 620,880 $ 80.55 The following table presents unvested restricted stock units activity for the year ended December 31, 2022: Number of Weighted-Average Unvested restricted stock units at December 31, 2021 12,485 $ 71.44 Granted 13,666 $ 60.11 Vested (4,061) $ 66.47 Canceled (530) $ 69.56 Unvested restricted stock units at December 31, 2022 21,560 $ 65.24 The following tables presents the Matching RSU activity for the year ended December 31, 2022: Number of Matching RSU Weighted-Average Unvested MSPP restricted stock units at December 31, 2021 116,090 $ 62.66 Granted 75,479 $ 57.84 Vested — Canceled (11,138) $ 64.66 Unvested MSPP restricted stock units at December 31, 2022 180,431 $ 60.52 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 12 Months Ended |
Dec. 31, 2022 operating_segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Term of subscription-based license agreements | 1 year |
Number of business segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Revenue Recognition) (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Term of subscription-based license agreements | 1 year | ||
Percentage of Total Revenue | 93% | 93% | 95% |
Amortization period of deferred sales commissions | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Foreign Currency Translation and Accumulated Other Comprehensive Loss) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Foreign currency transaction gain (loss), realized | $ (1,400,000) | $ (300,000) | $ 200,000 |
Accumulated Other Comprehensive Income (Loss) Net of Tax [Abstract] | |||
Foreign currency translation adjustment | (29,075,000) | (5,758,000) | |
Total accumulated other comprehensive loss | (29,075,000) | (5,758,000) | |
Reclassification from accumulated other comprehensive income, current period, net of tax | $ 500,000 | ||
Reclassification out of accumulated other comprehensive loss | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Advertising Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Advertising costs | $ 305.7 | $ 312 | $ 270.5 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Stock-Based Compensation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation Expense [Abstract] | |||
Compensation expense | $ 75,207 | $ 63,709 | $ 54,104 |
Expense related to stock options settled | 700 | ||
Cost of revenues | |||
Stock-Based Compensation Expense [Abstract] | |||
Compensation expense | 12,579 | 11,165 | 10,879 |
Selling and marketing (excluding customer base amortization) | |||
Stock-Based Compensation Expense [Abstract] | |||
Compensation expense | 7,797 | 6,314 | 5,194 |
Software development | |||
Stock-Based Compensation Expense [Abstract] | |||
Compensation expense | 12,987 | 12,544 | 10,325 |
General and administrative | |||
Stock-Based Compensation Expense [Abstract] | |||
Compensation expense | $ 41,844 | $ 33,686 | $ 27,706 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cash Reconciliation) (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Abstract] | ||
Cash and Cash Equivalents | $ 5,000,000,000 | $ 3,800,000,000 |
Restricted cash | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Allowance for Credit Losses) (Details) | Dec. 31, 2022 portfolioSegment numberOfReceivable |
Accounting Policies [Abstract] | |
Number of portfolio segments | portfolioSegment | 5 |
Number of classes of trade receivables based on location | 2 |
Number of trade receivables in information services portfolio | 4 |
Number of trade receivables in multifamily portfolio | 1 |
Number of trade receivables in loopnet portfolio | 1 |
Number of trade receivables in other marketplaces portfolio segment | 2 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Property and Equipment) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Jan. 31, 2021 | Dec. 31, 2022 | |
Office Building - Richmond, Virginia | ||
Property, Plant and Equipment [Line Items] | ||
Purchase price | $ 131 | |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Minimum | Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 20 years | |
Minimum | Aircrafts | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 10 years | |
Minimum | Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Minimum | Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Maximum | Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 39 years | |
Maximum | Aircrafts | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 20 years | |
Maximum | Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 10 years | |
Maximum | Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Long-Lived Assets, Intangible Assets and Goodwill) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
North America | |
Finite-Lived Intangible Assets [Line Items] | |
Impairment loss | $ 9,000 |
Acquired Technology | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 2 years |
Acquired Technology | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 7 years |
Acquired customer base | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 3 years |
Acquired customer base | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 13 years |
Trade name | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 3 years |
Trade name | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Recent Accounting Pronouncements) (Details) - 2020 Credit Agreement | Jul. 01, 2020 USD ($) |
Revolving Loans and Letters of Credit | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Revolving credit sub-facility for swing-line loans and issuances of letters of credit | $ 750,000,000 |
Letter of Credit | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Revolving credit sub-facility for swing-line loans and issuances of letters of credit | $ 20,000,000 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Disaggregated Revenue) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 2,182,399 | $ 1,944,135 | $ 1,659,019 |
CoStar | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 836,980 | 722,821 | 664,735 |
Information services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 157,382 | 141,655 | 130,070 |
Multifamily | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 745,388 | 678,680 | 598,555 |
LoopNet | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 230,941 | 207,511 | 179,805 |
Residential | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 73,747 | 74,583 | 0 |
Other Marketplaces | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 137,961 | 118,885 | 85,854 |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2,105,988 | 1,877,635 | 1,602,102 |
North America | CoStar | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 800,183 | 686,948 | 634,205 |
North America | Information services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 124,951 | 113,723 | 104,117 |
North America | Multifamily | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 745,388 | 678,680 | 598,555 |
North America | LoopNet | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 223,758 | 204,816 | 179,371 |
North America | Residential | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 73,747 | 74,583 | 0 |
North America | Other Marketplaces | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 137,961 | 118,885 | 85,854 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 76,411 | 66,500 | 56,917 |
International | CoStar | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 36,797 | 35,873 | 30,530 |
International | Information services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 32,431 | 27,932 | 25,953 |
International | Multifamily | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
International | LoopNet | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 7,183 | 2,695 | 434 |
International | Residential | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
International | Other Marketplaces | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 0 | $ 0 | $ 0 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 96,724 | |
Revenue recognized in the current period from the amounts in the beginning balance | (93,816) | |
New deferrals, net of amounts recognized in the current period | 102,410 | |
Effects of foreign currency | (1,536) | |
Ending balance | 103,782 | |
Current liability | 103,567 | $ 95,471 |
Noncurrent liability | 200 | $ 1,200 |
New deferrals recognized in connection with business acquisitions made in 2022 | $ (1,800) |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS (Contract Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, asset, gross | $ 12.4 | $ 9.2 |
REVENUE FROM CONTRACTS WITH C_6
REVENUE FROM CONTRACTS WITH CUSTOMERS (Commissions) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |||
Deferred sales commissions of impaired | $ 0 | $ 0 | |
Commissions incurred | 162,126,000 | 117,391,000 | $ 97,183,000 |
Commissions capitalized in the current period | (116,796,000) | (72,038,000) | (64,355,000) |
Amortization of deferred commissions costs | 76,082,000 | 63,391,000 | 60,516,000 |
Total commissions expense | $ 121,412,000 | $ 108,744,000 | $ 93,344,000 |
REVENUE FROM CONTRACTS WITH C_7
REVENUE FROM CONTRACTS WITH CUSTOMERS (Unsatisfied Performance Obligations) (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 436.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 5 years |
ALLOWANCE FOR CREDIT LOSSES (De
ALLOWANCE FOR CREDIT LOSSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | $ 13,374 | $ 15,110 | $ 4,548 |
Current-period provision (release) for expected credit losses | 18,309 | 10,928 | 25,212 |
Write-offs charged against the allowance, net of recoveries and other | (19,488) | (12,664) | (14,650) |
Ending Balance | 12,195 | 13,374 | 15,110 |
CoStar | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | 5,380 | 5,531 | 1,264 |
Current-period provision (release) for expected credit losses | 9,168 | 5,699 | 11,622 |
Write-offs charged against the allowance, net of recoveries and other | (10,038) | (5,850) | (7,355) |
Ending Balance | 4,510 | 5,380 | 5,531 |
Information services | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | 1,820 | 2,739 | 624 |
Current-period provision (release) for expected credit losses | (557) | (392) | 2,649 |
Write-offs charged against the allowance, net of recoveries and other | (212) | (527) | (534) |
Ending Balance | 1,051 | 1,820 | 2,739 |
Multifamily | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | 3,393 | 4,387 | 1,195 |
Current-period provision (release) for expected credit losses | 5,813 | 3,057 | 7,644 |
Write-offs charged against the allowance, net of recoveries and other | (4,859) | (4,051) | (4,452) |
Ending Balance | 4,347 | 3,393 | 4,387 |
LoopNet | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | 1,968 | 1,667 | 576 |
Current-period provision (release) for expected credit losses | 3,807 | 2,564 | 3,213 |
Write-offs charged against the allowance, net of recoveries and other | (4,379) | (2,263) | (2,122) |
Ending Balance | 1,396 | 1,968 | 1,667 |
Other Marketplaces | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | 813 | 786 | 889 |
Current-period provision (release) for expected credit losses | 78 | 0 | 84 |
Write-offs charged against the allowance, net of recoveries and other | 0 | 27 | (187) |
Ending Balance | $ 891 | $ 813 | $ 786 |
ACQUISITIONS (Narrative) (Detai
ACQUISITIONS (Narrative) (Details) $ in Thousands, € in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||||||||||
Oct. 01, 2021 USD ($) | Oct. 01, 2021 EUR (€) | May 24, 2021 USD ($) | Dec. 22, 2020 USD ($) | Jun. 24, 2020 USD ($) | Apr. 30, 2022 USD ($) | Apr. 30, 2022 EUR (€) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | May 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||||||||||||
Cash paid for acquisitions, net of cash acquired | $ 6,273 | $ 192,971 | $ 426,075 | ||||||||||||
Business Immo | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Cash paid for acquisitions, net of cash acquired | $ 6,300 | € 5.8 | |||||||||||||
Goodwill acquired | 7,100 | ||||||||||||||
Intangible assets | $ 3,900 | ||||||||||||||
BureauxLocaux | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Goodwill acquired | $ 27,400 | ||||||||||||||
Intangible assets | 18,300 | 18,300 | |||||||||||||
Aggregate purchase price | $ 40,600 | € 35 | |||||||||||||
Homes.com | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Intangible assets | $ 53,400 | ||||||||||||||
Purchase price before adjustments | $ 150,000 | ||||||||||||||
Fair value of identifiable net assets acquired | 152,175 | $ 152,200 | |||||||||||||
Business combinations cash escrow payment employee compensation post combination | 5,000 | ||||||||||||||
Business combination tax liabilities accrual amount | 6,600 | 6,600 | |||||||||||||
Goodwill, expected tax deductible amount | 20,000 | ||||||||||||||
Increase in revenue | $ 13,600 | ||||||||||||||
Decrease in net income | $ 23,500 | ||||||||||||||
Homes.com | North America | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Goodwill acquired | $ 91,900 | ||||||||||||||
Homesnap | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Goodwill acquired | $ 184,400 | ||||||||||||||
Intangible assets | 67,000 | ||||||||||||||
Aggregate purchase price | $ 250,000 | ||||||||||||||
Fair value of identifiable net assets acquired | $ 250,354 | ||||||||||||||
Ten-X | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Goodwill acquired | $ 134,300 | ||||||||||||||
Intangible assets | 58,000 | ||||||||||||||
Aggregate purchase price | 188,000 | ||||||||||||||
Fair value of identifiable net assets acquired | $ 187,715 | ||||||||||||||
Increase in revenue | $ 31,800 | ||||||||||||||
Decrease in net income | $ 10,000 | ||||||||||||||
Transaction costs | $ 3,000 | $ 3,000 |
ACQUISITIONS (Schedule of Recog
ACQUISITIONS (Schedule of Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | May 31, 2021 | May 24, 2021 | Dec. 31, 2020 | Dec. 22, 2020 | Jun. 24, 2020 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 2,314,759 | $ 2,321,015 | $ 2,235,999 | ||||
Deferred tax assets, net | $ 1,800 | ||||||
Homes.com | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 0 | ||||||
Accounts receivable | 1,798 | ||||||
Lease right-of-use assets | 371 | ||||||
Goodwill | $ 88,500 | 91,875 | |||||
Intangible assets | 53,400 | ||||||
Deferred tax assets | 7,862 | ||||||
Lease liabilities | (371) | ||||||
Deferred revenue | 1,521 | ||||||
Other assets and liabilities | (1,239) | ||||||
Fair value of identifiable net assets acquired | $ 152,200 | $ 152,175 | |||||
Homesnap | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 10,225 | ||||||
Accounts receivable | 662 | ||||||
Lease right-of-use assets | 3,437 | ||||||
Goodwill | 184,371 | ||||||
Intangible assets | 67,000 | ||||||
Deferred tax assets, net | 2,778 | ||||||
Lease liabilities | (3,375) | ||||||
Deferred revenue | 4,000 | ||||||
Other assets and liabilities | (5,188) | ||||||
Fair value of identifiable net assets acquired | $ 250,354 | ||||||
Ten-X | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 3,290 | ||||||
Accounts receivable | 131 | ||||||
Lease right-of-use assets | 4,945 | ||||||
Goodwill | 134,322 | ||||||
Intangible assets | 58,000 | ||||||
Deferred tax assets, net | 2,981 | ||||||
Lease liabilities | (4,945) | ||||||
Other assets and liabilities | (5,047) | ||||||
Fair value of identifiable net assets acquired | $ 187,715 |
ACQUISITIONS (Intangible Assets
ACQUISITIONS (Intangible Assets Acquired) (Details) - USD ($) $ in Thousands | May 24, 2021 | Dec. 22, 2020 | Jun. 24, 2020 |
Homes.com | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 53,400 | ||
Homes.com | Customer base | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 32,000 | ||
Estimated Useful Life | 8 years | ||
Homes.com | Trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 21,000 | ||
Estimated Useful Life | 15 years | ||
Homes.com | Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 400 | ||
Estimated Useful Life | 2 years | ||
Homesnap | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 67,000 | ||
Homesnap | Customer base | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 45,000 | ||
Estimated Useful Life | 10 years | ||
Homesnap | Trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 7,000 | ||
Estimated Useful Life | 10 years | ||
Homesnap | Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 15,000 | ||
Estimated Useful Life | 6 years | ||
Ten-X | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 58,000 | ||
Ten-X | Customer base | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 46,000 | ||
Estimated Useful Life | 6 years | ||
Ten-X | Trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 11,000 | ||
Estimated Useful Life | 5 years | ||
Ten-X | Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 1,000 | ||
Estimated Useful Life | 2 years |
ACQUISITIONS (Business Acquisit
ACQUISITIONS (Business Acquisition, Pro Forma Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 1,962,102 | $ 1,758,612 |
Net income | $ 286,718 | $ 197,994 |
Net income per share - basic (usd per share) | $ 0.74 | $ 0.52 |
Net income per share - diluted (usd per share) | $ 0.73 | $ 0.51 |
INVESTMENTS AND FAIR VALUE ME_2
INVESTMENTS AND FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Billions | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt outstanding, fair value | $ 0.8 | $ 1 |
Cash Equivalents | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 4.8 | $ 3 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) | Dec. 31, 2022 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 6 years |
LEASES (Lease Cost) (Details)
LEASES (Lease Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease costs: | $ 33,631 | $ 34,879 | $ 32,835 |
Cost of revenues | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs: | 8,428 | 10,110 | 11,632 |
Software development | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs: | 7,201 | 6,947 | 6,020 |
Selling and marketing (excluding customer base amortization) | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs: | 12,642 | 11,911 | 10,356 |
General and administrative | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs: | $ 5,360 | $ 5,911 | $ 4,827 |
LEASES (Supplemental Balance Sh
LEASES (Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases, Operating [Abstract] | ||
Operating lease liabilities | $ 118,294 | $ 134,150 |
Less: imputed interest | (6,238) | (8,512) |
Present value of lease liabilities | 112,056 | 125,638 |
Lease liabilities | 36,049 | 26,268 |
Long-term lease liabilities | $ 76,007 | $ 99,370 |
Weighted-average remaining lease term in years | 3 years 7 months 6 days | 4 years |
Weighted-average discount rate | 3.10% | 3.10% |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Lease and other long-term liabilities | Lease and other long-term liabilities |
LEASES (Supplemental Cash Flow
LEASES (Supplemental Cash Flow Information Related to Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows used in operating leases | $ 41,550 | $ 37,298 | $ 37,006 |
ROU assets obtained in exchange for lease obligations: | |||
Operating leases | $ 19,967 | $ 34,247 | $ 19,746 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 406,837 | $ 406,837 | $ 357,293 | ||
Accumulated depreciation and amortization | (85,587) | (85,587) | (85,862) | ||
Property and equipment, net | 321,250 | 321,250 | 271,431 | ||
Depreciation expense for property and equipment | 29,100 | 29,000 | $ 28,800 | ||
Depreciated assets written-off | 27,600 | ||||
Proceeds from sale of property and equipment and other assets | 30,097 | 612 | $ 0 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 108,901 | 108,901 | 75,634 | ||
Furniture, office equipment and vehicles | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 52,610 | 52,610 | 47,540 | ||
Computer hardware and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 43,830 | 43,830 | 30,179 | ||
Aircrafts | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 44,209 | 44,209 | 68,670 | ||
Proceeds from sale of property and equipment and other assets | $ 24,900 | ||||
Gain (loss) on disposition of assets | 3,300 | ||||
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 52,227 | 52,227 | 38,774 | ||
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 105,060 | $ 105,060 | $ 96,496 |
GOODWILL (Goodwill by Segment)
GOODWILL (Goodwill by Segment) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Oct. 01, 2021 | May 24, 2021 | Dec. 22, 2020 | Jun. 24, 2020 | Apr. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||||||||
Goodwill, beginning balance | $ 2,321,015 | $ 2,235,999 | ||||||
Acquisitions, including measurement period adjustments | 10,496 | 87,793 | ||||||
Effect of foreign currency translation | (16,752) | (2,777) | ||||||
Goodwill, ending balance | $ 2,314,759 | 2,314,759 | 2,321,015 | |||||
Ten-X | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, ending balance | $ 134,322 | |||||||
Goodwill acquired | $ 134,300 | |||||||
Homesnap | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, ending balance | $ 184,371 | |||||||
Goodwill acquired | $ 184,400 | |||||||
BureauxLocaux | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill acquired | 27,400 | |||||||
Homes.com | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, beginning balance | 88,500 | |||||||
Goodwill, ending balance | $ 91,875 | 88,500 | ||||||
Business Immo | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill acquired | $ 7,100 | |||||||
North America | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, beginning balance | 2,145,846 | 2,085,494 | ||||||
Acquisitions, including measurement period adjustments | 3,401 | 60,352 | ||||||
Effect of foreign currency translation | 0 | 0 | ||||||
Goodwill, ending balance | 2,149,247 | 2,149,247 | 2,145,846 | |||||
North America | Ten-X | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill increase (decrease) | 1,400 | |||||||
North America | Homesnap | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill increase (decrease) | 26,700 | |||||||
North America | Homes.com | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill acquired | $ 91,900 | |||||||
Goodwill measuring period adjustment | 3,400 | |||||||
International | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, beginning balance | 175,169 | 150,505 | ||||||
Acquisitions, including measurement period adjustments | 7,095 | 27,441 | ||||||
Effect of foreign currency translation | (16,752) | (2,777) | ||||||
Goodwill, ending balance | $ 165,512 | 165,512 | $ 175,169 | |||||
International | BureauxLocaux | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill acquired | $ 27,400 | |||||||
International | Business Immo | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill acquired | $ 7,100 |
GOODWILL (Narrative) (Details)
GOODWILL (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||
Goodwill, impairment | $ 0 | $ 0 | $ 0 |
2021 Acquisitions | |||
Goodwill [Line Items] | |||
Goodwill, expected tax deductible amount | $ 20,000,000 | ||
2022 Acquisitions | |||
Goodwill [Line Items] | |||
Goodwill, expected tax deductible amount | $ 0 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | $ 329,306 | $ 435,662 |
Acquired technology and data | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 40,422 | 41,979 |
Accumulated amortization | (20,693) | (15,333) |
Finite-lived intangible assets, net | $ 19,729 | 26,646 |
Weighted- Average Amortization Period (in years) | 5 years | |
Acquired customer base | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 464,242 | 569,666 |
Accumulated amortization | (287,051) | (319,039) |
Finite-lived intangible assets, net | $ 177,191 | 250,627 |
Weighted- Average Amortization Period (in years) | 10 years | |
Acquired trade names and other intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 247,361 | 262,136 |
Accumulated amortization | (114,975) | (103,747) |
Finite-lived intangible assets, net | $ 132,386 | $ 158,389 |
Weighted- Average Amortization Period (in years) | 13 years |
INTANGIBLE ASSETS (Narrative) (
INTANGIBLE ASSETS (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 102,600,000 | $ 103,600,000 | $ 88,100,000 |
Indefinite-lived intangible assets, written off | 87,700,000 | ||
Impairment of intangible assets | 0 | 0 | 0 |
Amortization expense for 2023 | 69,100,000 | ||
Amortization expense for 2024 | 57,000,000 | ||
Amortization expense for 2025 | 45,500,000 | ||
Amortization expense for 2026 | 37,300,000 | ||
Amortization expense for 2027 | 30,200,000 | ||
Customer base amortization | 73,560,000 | $ 74,817,000 | $ 62,457,000 |
Acquired customer base | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Customer base amortization | $ 16,300,000 |
LONG-TERM DEBT (Schedule of Deb
LONG-TERM DEBT (Schedule of Debt) (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 01, 2020 |
Debt Instrument [Line Items] | |||
Total face amount of long-term debt | $ 1,000,000,000 | $ 1,000,000,000 | |
Senior notes unamortized discount and issuance costs | (10,790,000) | (12,056,000) | |
Long-term debt, net | 989,210,000 | 987,944,000 | |
2.800% Senior Notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 2.80% | ||
Total face amount of long-term debt | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 |
LONG-TERM DEBT (Narrative) (Det
LONG-TERM DEBT (Narrative) (Details) | 12 Months Ended | ||
Jul. 01, 2020 USD ($) occasion | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||
Total face amount of long-term debt | $ 1,000,000,000 | $ 1,000,000,000 | |
Number of allowable increase requests | occasion | 5 | ||
2.800% Senior Notes | |||
Debt Instrument [Line Items] | |||
Total face amount of long-term debt | $ 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Stated interest rate | 2.80% | ||
Discounted rate par value | 99.921% | ||
Redemption price rate | 100% | ||
2020 Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total face amount of long-term debt | $ 0 | 0 | |
Total leverage ratio | 4.50 | ||
2020 Credit Agreement | Other Assets | |||
Debt Instrument [Line Items] | |||
Debt issuance costs, net | $ 2,700,000 | $ 3,800,000 | |
2020 Credit Agreement | Revolving Loans and Letters of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 750,000,000 | ||
Term of credit facility | 5 years | ||
2020 Credit Agreement | Revolving Loans and Letters of Credit | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.25% | ||
2020 Credit Agreement | Revolving Loans and Letters of Credit | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.30% | ||
2020 Credit Agreement | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 20,000,000 | ||
2020 Credit Agreement | Letter of Credit | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread | 0% | ||
2020 Credit Agreement | Letter of Credit | Minimum | Alternate Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread | 0.50% | ||
2020 Credit Agreement | Letter of Credit | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread | 1.50% | ||
2020 Credit Agreement | Letter of Credit | Maximum | Alternate Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread | 1.25% | ||
2020 Credit Agreement | Letter of Credit | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread | 2.25% |
LONG-TERM DEBT (Interest) (Deta
LONG-TERM DEBT (Interest) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Amortization of Senior Notes discount and issuance costs | $ 2,365 | $ 2,327 | $ 1,658 |
Commitment fees and other | 1,960 | 1,989 | 1,627 |
Total interest expense | 32,325 | 32,316 | 21,794 |
Interest on outstanding borrowings | |||
Debt Instrument [Line Items] | |||
Total interest expense | $ 28,000 | $ 28,000 | $ 18,509 |
INCOME TAXES (Components for Pr
INCOME TAXES (Components for Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 116,312 | $ 61,290 | $ 43,461 |
State | 31,231 | 24,618 | 11,726 |
Foreign | 664 | 1,331 | 195 |
Total current | 148,207 | 87,239 | 55,382 |
Deferred: | |||
Federal | (20,455) | 22,859 | (9,599) |
State | (9,582) | 8,467 | (926) |
Foreign | (1,166) | (7,161) | (1,005) |
Total deferred | (31,203) | 24,165 | (11,530) |
Total provision for income taxes | $ 117,004 | $ 111,404 | $ 43,852 |
INCOME TAXES (Components of Def
INCOME TAXES (Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Allowance for credit losses | $ 3,373 | $ 3,601 |
Accrued compensation | 4,590 | 3,913 |
Stock compensation | 20,427 | 18,956 |
Net operating losses | 26,794 | 45,835 |
Accrued reserve and other | 6,768 | 4,134 |
Lease liabilities | 26,446 | 28,306 |
Capitalized research and development costs | 45,351 | 0 |
Research and development credits | 6,073 | 5,812 |
Total deferred tax assets, prior to valuation allowance | 139,822 | 110,557 |
Valuation allowance | (5,241) | (5,694) |
Total deferred tax assets, net of valuation allowance | 134,581 | 104,863 |
Deferred tax liabilities: | ||
Deferred commission costs, net | (36,112) | (25,700) |
Lease right-of-use assets | (18,217) | (22,574) |
Prepaid expenses | (3,206) | (2,569) |
Property and equipment, net | (25,691) | (21,827) |
Intangible assets, net | (117,835) | (125,815) |
Total deferred tax liabilities | (201,061) | (198,485) |
Net deferred tax liabilities | $ (66,480) | $ (93,622) |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Decrease in valuation allowance | $ 500 | $ 5,500 | |
Income from U.S. sources | 493,200 | 408,800 | $ 290,600 |
Income from foreign sources | 6,700 | 4,800 | 19,700 |
Cash tax benefits resulting in net operating loss carryforward | 12,600 | 14,100 | 4,800 |
Unrecognized tax benefits that would favorably affect the annual effective tax rate if recognized in future periods | 16,200 | 14,800 | |
Increase for current year tax positions | 3,394 | 3,024 | 4,213 |
Decrease for prior year tax positions | 300 | 5,353 | |
Decrease for settlements with taxing authorities | 9,924 | ||
Expiration of the statute of limitation for assessment of taxes | 2,325 | 1,866 | 1,259 |
Income tax penalties and interest expense (reversal) | (100) | 400 | 400 |
Interest and penalties accrued on income taxes | 700 | $ 600 | $ 1,000 |
Foreign Country | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | 24,900 | ||
Domestic Country | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | 95,800 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | 400 | ||
Income tax credit carryforward | $ 10,300 |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective tax rate reconciliation [Abstract] | |||
Expected federal income tax provision at statutory rate | $ 102,156 | $ 84,833 | $ 56,906 |
State income taxes, net of federal benefit | 21,486 | 21,012 | 11,409 |
(Decrease) in valuation allowance | (453) | (4,995) | (4,848) |
Research credits | (17,517) | (13,070) | (14,322) |
Excess tax benefit | (1,821) | (10,933) | (21,038) |
Tax reserves | 1,506 | (12,787) | 4,762 |
Nondeductible compensation | 11,368 | 10,369 | 5,949 |
International restructuring | (3,912) | 34,854 | 0 |
Other adjustments | 4,191 | 2,121 | 5,034 |
Total provision for income taxes | $ 117,004 | $ 111,404 | $ 43,852 |
INCOME TAXES (Unrecognized Tax
INCOME TAXES (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized tax benefits beginning balance | $ 14,754 | $ 28,873 | $ 25,467 |
Increase for current year tax positions | 3,394 | 3,024 | 4,213 |
Increase for prior year tax positions | 330 | 452 | |
Decrease for prior year tax positions | 300 | 5,353 | |
Decrease for settlements with taxing authorities | (9,924) | ||
Expiration of the statute of limitation for assessment of taxes | (2,325) | (1,866) | (1,259) |
Unrecognized tax benefits ending balance | $ 16,153 | $ 14,754 | $ 28,873 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating lease obligations | ||
2023 | $ 39,015 | |
2024 | 36,893 | |
2025 | 19,302 | |
2026 | 9,724 | |
2027 | 7,880 | |
Thereafter | 5,480 | |
Operating lease liabilities | 118,294 | $ 134,150 |
Long-term debt principal payments | ||
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 1,000,000 | |
Total | 1,000,000 | |
Long-term debt principal interest payments | ||
2023 | 28,000 | |
2024 | 28,000 | |
2025 | 28,000 | |
2026 | 28,000 | |
2027 | 28,000 | |
Thereafter | 84,000 | |
Total | $ 224,000 |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2022 operating_segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT REPORTING (EBITDA) (Det
SEGMENT REPORTING (EBITDA) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Total EBITDA | $ 582,655 | $ 564,981 | $ 406,146 |
Operating Segments | North America | |||
Segment Reporting Information [Line Items] | |||
Total EBITDA | 577,242 | 557,125 | 410,852 |
Operating Segments | International | |||
Segment Reporting Information [Line Items] | |||
Total EBITDA | $ 5,413 | $ 7,856 | $ (4,706) |
SEGMENT REPORTING (Reconciliati
SEGMENT REPORTING (Reconciliation of Net Income (Loss) to EBITDA) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | |||
Net income | $ 369,453 | $ 292,564 | $ 227,128 |
Amortization of acquired intangible assets in cost of revenues | 29,019 | 28,809 | 25,675 |
Amortization of acquired intangible assets in operating expenses | 73,560 | 74,817 | 62,457 |
Depreciation and other amortization | 29,127 | 29,018 | 28,812 |
Interest (income) expense, net | (32,125) | 31,621 | 17,395 |
Other (income) expense, net | (3,383) | (3,252) | 827 |
Income tax expense | 117,004 | 111,404 | 43,852 |
EBITDA | $ 582,655 | $ 564,981 | $ 406,146 |
SEGMENT REPORTING (Summarized I
SEGMENT REPORTING (Summarized Information) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | |||
Property and equipment, net | $ 321,250 | $ 271,431 | |
Goodwill | 2,314,759 | 2,321,015 | $ 2,235,999 |
Total assets | 8,402,470 | 7,256,871 | |
Total liabilities | 1,532,349 | 1,545,199 | |
North America | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 2,149,247 | 2,145,846 | 2,085,494 |
International | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 165,512 | 175,169 | $ 150,505 |
Operating Segments | North America | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 320,209 | 269,792 | |
Goodwill | 2,149,247 | 2,145,846 | |
Total assets | 8,146,239 | 6,976,752 | |
Total liabilities | 1,486,237 | 1,502,497 | |
Operating Segments | International | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 1,041 | 1,639 | |
Goodwill | 165,512 | 175,169 | |
Total assets | 256,231 | 280,119 | |
Total liabilities | $ 46,112 | $ 42,702 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 20, 2022 | May 28, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 07, 2021 | Jun. 06, 2021 |
Preferred stock | ||||||
Preferred stock authorized for issuance (in shares) | 2,000,000 | 2,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Common stock | ||||||
Common stock authorized for issuance (in shares) | 1,200,000,000 | 1,200,000,000 | ||||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock authorized for issuance (in shares) | 1,200,000,000 | 1,200,000,000 | ||||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Board of Directors | ||||||
Common stock | ||||||
Common stock authorized for issuance (in shares) | 1,200,000,000 | 60,000,000 | ||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock authorized for issuance (in shares) | 1,200,000,000 | 60,000,000 | ||||
Public Offering | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued in transaction (in shares) | 10,700,000 | 26,300,000 | ||||
Sale of stock, price per share (usd per share) | $ 70.38 | $ 65.50 | ||||
Consideration received on transaction | $ 745,700 | $ 1,700,000 | ||||
Payments of stock issuance costs | $ 4,300 | $ 35,000 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Jun. 07, 2021 | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | ||
Numerator: | |||||
Net income | $ | $ 369,453 | $ 292,564 | $ 227,128 | ||
Denominator: | |||||
Denominator for basic net income per share — weighted-average outstanding shares | [1] | 396,284 | 392,210 | 380,726 | |
Effect of dilutive securities: | |||||
Stock options, restricted stock awards and restricted stock units (in shares) | 1,468 | 1,950 | 2,540 | ||
Denominator for diluted net income per share — weighted-average outstanding shares (in shares) | [1] | 397,752 | 394,160 | 383,266 | |
Net income per share — basic (in dollars per share) | $ / shares | [1] | $ 0.93 | $ 0.75 | $ 0.60 | |
Net income per share — diluted (in dollars per share) | $ / shares | [1] | $ 0.93 | $ 0.74 | $ 0.59 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 966 | 373 | 540 | ||
Conversion ratio | 10 | ||||
Performance-based restricted stock awards | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 398 | 415 | 526 | ||
[1]Certain prior period amounts have been retroactively adjusted to reflect the ten-for-one stock split effected in the form of a stock dividend in June 2021. |
EMPLOYEE BENEFIT PLANS (Stock I
EMPLOYEE BENEFIT PLANS (Stock Incentive Plans - Narrative) (Details) $ in Thousands | 12 Months Ended | ||||
Jun. 07, 2021 | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) shares | Jun. 09, 2016 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Conversion ratio | 10 | ||||
Tax benefit from stock-based compensation | $ | $ 0 | $ 2,400 | $ 20,400 | ||
Compensation expense | $ | $ 75,207 | 63,709 | 54,104 | ||
CoStar Group, Inc. 2007 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for future grant under the plan (in shares) | shares | 0 | ||||
CoStar Group, Inc. 2016 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for future grant under the plan (in shares) | shares | 14,300,000 | ||||
Shares of common stock authorized for issuance under the plan (in shares) | shares | 22,700,000 | ||||
CoStar Group, Inc. 2016 Stock Incentive Plan | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of options and restricted stock grants | 3 years | ||||
CoStar Group, Inc. 2016 Stock Incentive Plan | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of options and restricted stock grants | 4 years | ||||
Restricted Stock | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of options and restricted stock grants | 1 year | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation cost expected to be recognized in future years | $ | $ 107,400 | ||||
Weighted-average-period expected to recognize the unrecognized compensation cost (in years) | 2 years 4 months 24 days | ||||
Aggregate intrinsic value of options exercised | $ | $ 11,000 | $ 49,000 | |||
Exercise of stock options (in shares) | shares | 0 | 206,000 | 953,130 | ||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of options and restricted stock grants | 3 years | ||||
Performance service period | 3 years | ||||
Performance Shares | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangement, award vesting rights, percentage | 80% | ||||
Performance Shares | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangement, award vesting rights, percentage | 120% | ||||
Performance-based RSAs - with Market Condition | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation cost expected to be recognized in future years | $ | $ 13,300 | ||||
Compensation expense | $ | $ 11,900 | $ 8,000 | $ 3,700 | ||
Granted (in shares) | shares | 205,680 | ||||
DSU | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of options and restricted stock grants | 4 years | ||||
Deferred stock unit, granted percentage | 100% | ||||
Granted (in shares) | shares | 75,479 | 40,960 |
EMPLOYEE BENEFIT PLANS (Stock O
EMPLOYEE BENEFIT PLANS (Stock Option Activity) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Jun. 07, 2021 | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Dec. 31, 2019 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||||
Conversion ratio | 10 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Outstanding at beginning of period (in shares) | shares | 1,976,100 | 2,023,100 | 2,756,580 | ||
Granted (in shares) | shares | 202,100 | 159,000 | 341,000 | ||
Exercised (in shares) | shares | 0 | (206,000) | (953,130) | ||
Canceled or expired (in shares) | shares | 0 | (121,350) | |||
Outstanding at end of period (in shares) | shares | 2,178,200 | 1,976,100 | 2,023,100 | 2,756,580 | |
Exercisable at end of period (in shares) | shares | 1,766,070 | 1,473,420 | 1,228,060 | ||
Share Based Compensation Exercisable Range [Abstract] | |||||
Granted (dollars per share) | $ 67.29 | $ 91.98 | $ 66.65 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||||
Outstanding at beginning of period (in dollars per share) | 39.18 | 34.18 | 26.72 | ||
Granted (in dollars per share) | 67.29 | 91.98 | 66.65 | ||
Exercised (in dollars per share) | 30.78 | 22.95 | |||
Canceled or expired (in dollars per share) | 44.31 | ||||
Outstanding at end of period (in dollars per share) | 41.79 | 39.18 | 34.18 | $ 26.72 | |
Exercisable at end of period (in dollars per share) | $ 34.40 | $ 29.55 | $ 24.68 | ||
Weighted average remaining contract life, outstanding | 5 years 7 months 6 days | 6 years 2 months 26 days | 6 years 11 months 26 days | 6 years 11 months 23 days | |
Weighted average remaining contract life, outstanding, exercisable | 4 years 11 months 15 days | 5 years 7 months 2 days | 6 years 2 months 4 days | ||
Aggregate intrinsic value of options outstanding at end of period | $ | $ 79,639 | $ 80,800 | $ 117,846 | $ 91,262 | |
Aggregate intrinsic value of options exercisable at end of period | $ | $ 76,515 | $ 72,905 | $ 83,204 | ||
Minimum | |||||
Share Based Compensation Exercisable Range [Abstract] | |||||
Outstanding (dollars per share) | $ 10.22 | ||||
Exercised (dollars per share) | $ 20.49 | ||||
Outstanding (dollars per share) | 10.22 | 10.22 | |||
Minimum | Stock Options | |||||
Share Based Compensation Exercisable Range [Abstract] | |||||
Outstanding (dollars per share) | 10.22 | $ 5.45 | |||
Exercised (dollars per share) | 19.37 | ||||
Canceled or expired (dollars per share) | 34.21 | ||||
Outstanding (dollars per share) | 10.22 | $ 5.45 | |||
Exercisable at end of period (dollars per share) | 10.22 | 10.22 | 10.22 | ||
Maximum | Stock Options | |||||
Share Based Compensation Exercisable Range [Abstract] | |||||
Outstanding (dollars per share) | 91.98 | 66.65 | 39.82 | ||
Exercised (dollars per share) | 39.82 | 39.82 | |||
Canceled or expired (dollars per share) | 66.65 | ||||
Outstanding (dollars per share) | 91.98 | 91.98 | 66.65 | $ 39.82 | |
Exercisable at end of period (dollars per share) | $ 91.98 | $ 66.65 | $ 39.82 |
EMPLOYEE BENEFIT PLANS (Assumpt
EMPLOYEE BENEFIT PLANS (Assumptions) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0% | 0% | 0% |
Expected volatility | 31% | 30% | 26% |
Risk-free interest rate | 1.89% | 0.56% | 1.45% |
Expected life (in years) | 5 years | 5 years | 5 years |
Weighted-average grant date fair value (in USD per share) | $ 20.43 | $ 25.09 | $ 17.21 |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0% | 0% | 0% |
Expected volatility | 34% | 42% | 27% |
Risk-free interest rate | 1.71% | 0.20% | 1.43% |
Expected life (in years) | 3 years | 3 years | 3 years |
Weighted-average grant date fair value (in USD per share) | $ 71.19 | $ 99.73 | $ 72.69 |
EMPLOYEE BENEFIT PLANS (Informa
EMPLOYEE BENEFIT PLANS (Information Regarding Stock Options) (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Options Outstanding | |
Number of shares (in shares) | shares | 2,178,200 |
Weighted-average remaining contractual life (in years) | 5 years 7 months 6 days |
Weighted- average exercise price (in dollars per share) | $ 41.79 |
Options Exercisable | |
Number of shares (in shares) | shares | 1,766,070 |
Weighted-average exercise price (in dollars per share) | $ 34.40 |
$10.22 - $19.93 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of exercise price, minimum, (in dollars per share) | 10.22 |
Range of exercise price, maximum, (in dollars per share) | $ 19.93 |
Options Outstanding | |
Number of shares (in shares) | shares | 411,540 |
Weighted-average remaining contractual life (in years) | 2 years 10 months 28 days |
Weighted- average exercise price (in dollars per share) | $ 17.62 |
Options Exercisable | |
Number of shares (in shares) | shares | 411,540 |
Weighted-average exercise price (in dollars per share) | $ 17.62 |
$19.94 - $27.35 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of exercise price, minimum, (in dollars per share) | 19.94 |
Range of exercise price, maximum, (in dollars per share) | $ 27.35 |
Options Outstanding | |
Number of shares (in shares) | shares | 350,880 |
Weighted-average remaining contractual life (in years) | 4 years 1 month 28 days |
Weighted- average exercise price (in dollars per share) | $ 20.49 |
Options Exercisable | |
Number of shares (in shares) | shares | 350,880 |
Weighted-average exercise price (in dollars per share) | $ 20.49 |
$27.36 - $37.02 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of exercise price, minimum, (in dollars per share) | 27.36 |
Range of exercise price, maximum, (in dollars per share) | $ 37.02 |
Options Outstanding | |
Number of shares (in shares) | shares | 357,010 |
Weighted-average remaining contractual life (in years) | 5 years 1 month 28 days |
Weighted- average exercise price (in dollars per share) | $ 34.21 |
Options Exercisable | |
Number of shares (in shares) | shares | 357,010 |
Weighted-average exercise price (in dollars per share) | $ 34.21 |
$37.03 - $53.24 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of exercise price, minimum, (in dollars per share) | 37.03 |
Range of exercise price, maximum, (in dollars per share) | $ 53.24 |
Options Outstanding | |
Number of shares (in shares) | shares | 385,670 |
Weighted-average remaining contractual life (in years) | 6 years 1 month 6 days |
Weighted- average exercise price (in dollars per share) | $ 39.82 |
Options Exercisable | |
Number of shares (in shares) | shares | 385,670 |
Weighted-average exercise price (in dollars per share) | $ 39.82 |
$53.25 - $91.98 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of exercise price, minimum, (in dollars per share) | 53.25 |
Range of exercise price, maximum, (in dollars per share) | $ 91.98 |
Options Outstanding | |
Number of shares (in shares) | shares | 673,100 |
Weighted-average remaining contractual life (in years) | 7 years 11 months 12 days |
Weighted- average exercise price (in dollars per share) | $ 72.83 |
Options Exercisable | |
Number of shares (in shares) | shares | 260,970 |
Weighted-average exercise price (in dollars per share) | $ 71.79 |
EMPLOYEE BENEFIT PLANS (Restric
EMPLOYEE BENEFIT PLANS (Restrictive Stock Award Activity) (Details) | 12 Months Ended | |
Jun. 07, 2021 | Dec. 31, 2022 $ / shares shares | |
Weighted-Average Grant Date Fair Value per Share | ||
Conversion ratio | 10 | |
Performance Based RSAs Without Market Condition | ||
Number of Shares | ||
Unvested restricted stock at beginning of period (in shares) | shares | 1,782,306 | |
Granted (in shares) | shares | 1,277,303 | |
Vested (in shares) | shares | (750,435) | |
Canceled (in shares) | shares | (247,280) | |
Unvested restricted stock at end of period (in shares) | shares | 2,061,894 | |
Weighted-Average Grant Date Fair Value per Share | ||
Unvested restricted stock at beginning of period (in USD per share) | $ / shares | $ 66.74 | |
Granted (in USD per share) | $ / shares | 62.15 | |
Vested (in USD per share) | $ / shares | 59.45 | |
Canceled (in USD per share) | $ / shares | 63.15 | |
Unvested restricted stock at end of period (in USD per share) | $ / shares | $ 67.15 | |
Performance-based RSAs - with Market Condition | ||
Number of Shares | ||
Unvested restricted stock at beginning of period (in shares) | shares | 717,600 | |
Granted (in shares) | shares | 205,680 | |
Vested (in shares) | shares | (238,130) | |
Canceled (in shares) | shares | (64,270) | |
Unvested restricted stock at end of period (in shares) | shares | 620,880 | |
Weighted-Average Grant Date Fair Value per Share | ||
Unvested restricted stock at beginning of period (in USD per share) | $ / shares | $ 67.40 | |
Granted (in USD per share) | $ / shares | 71.19 | |
Vested (in USD per share) | $ / shares | 42.96 | |
Canceled (in USD per share) | $ / shares | 42.96 | |
Unvested restricted stock at end of period (in USD per share) | $ / shares | $ 80.55 |
EMPLOYEE BENEFIT PLANS (Restr_2
EMPLOYEE BENEFIT PLANS (Restrictive Stock Units) (Details) | 12 Months Ended | |
Jun. 07, 2021 | Dec. 31, 2022 $ / shares shares | |
Weighted-Average Grant Date Fair Value per Share | ||
Conversion ratio | 10 | |
Restricted Stock Units (RSUs) | ||
Number of Shares | ||
Unvested restricted stock at beginning of period (in shares) | shares | 12,485 | |
Granted (in shares) | shares | 13,666 | |
Vested (in shares) | shares | (4,061) | |
Canceled (in shares) | shares | (530) | |
Unvested restricted stock at end of period (in shares) | shares | 21,560 | |
Weighted-Average Grant Date Fair Value per Share | ||
Unvested restricted stock at beginning of period (in USD per share) | $ / shares | $ 71.44 | |
Granted (in USD per share) | $ / shares | 60.11 | |
Vested (in USD per share) | $ / shares | 66.47 | |
Canceled (in USD per share) | $ / shares | 69.56 | |
Unvested restricted stock at end of period (in USD per share) | $ / shares | $ 65.24 |
EMPLOYEE BENEFIT PLANS (MSU and
EMPLOYEE BENEFIT PLANS (MSU and DSU Activity) (Details) | 12 Months Ended | |
Jun. 07, 2021 | Dec. 31, 2022 $ / shares shares | |
Weighted-Average Grant Date Fair Value per Share | ||
Conversion ratio | 10 | |
MSPP RSUs | ||
Number of Matching RSU Shares | ||
Unvested restricted stock at beginning of period (in shares) | shares | 116,090 | |
Granted (in shares) | shares | 75,479 | |
Vested (in shares) | shares | 0 | |
Canceled (in shares) | shares | (11,138) | |
Unvested restricted stock at end of period (in shares) | shares | 180,431 | |
Weighted-Average Grant Date Fair Value per Share | ||
Unvested restricted stock at beginning of period (in USD per share) | $ / shares | $ 62.66 | |
Granted (in USD per share) | $ / shares | 57.84 | |
Vested (in USD per share) | $ / shares | ||
Canceled (in USD per share) | $ / shares | 64.66 | |
Unvested restricted stock at end of period (in USD per share) | $ / shares | $ 60.52 |
EMPLOYEE BENEFIT PLANS (Employe
EMPLOYEE BENEFIT PLANS (Employee 401(k) Plan, Employee Pension Plan, Registered Retirement Savings Plan and Employee Stock Purchase Plan) (Details) - USD ($) | 12 Months Ended | |||
Jun. 02, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Maximum percentage of employee total compensation matched by employer (in hundredths) | 100% | 100% | 100% | |
Maximum annual employee contribution | 4% | 4% | 4% | |
Company match to employee contributions | $ 21,500,000 | $ 17,600,000 | $ 15,400,000 | |
Administrative expense | $ 0 | $ 0 | $ 0 | |
Percentage of purchase price of company's common stock to the market price | 90% | |||
Increase in shares of common stock issued pursuant to stock plan (in shares) | 1,000,000 | |||
Shares available, employee stock purchase plan (in shares) | 1,010,267 | 1,233,863 | ||
Shares of company's common stock purchased during the period (in shares) | 223,596 | 152,047 | ||
Registered Retirement Savings Plan | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Maximum percentage of employee total compensation matched by employer (in hundredths) | 100% | 100% | 100% | |
Maximum annual employee contribution | 4% | 4% | 4% | |
Company match to employee contributions | $ 100,000 | $ 100,000 | $ 100,000 | |
Foreign Plan | Pension Plan | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Maximum percentage of employee total compensation matched by employer (in hundredths) | 6% | 6% | 6% | |
Company match to employee contributions | $ 1,000,000 | $ 900,000 | $ 900,000 |