Homes.com Metrics Climb As Costar Profit Slides In 2025

Despite recording the 59th consecutive quarter of double-digit revenue growth during the fourth quarter of 2025, with revenue jumping 27% to $900 million, CoStar Group’s financial results may not have been as strong as many expected given the firm’s recent rhetoric about how well the company is performing. 

During the quarter, net income fell from $60 million a year ago to $47 million for Q4 2025. For the full year, as revenue rose 19% annually to $3.247 billion, net income fell to $7 million from $139 million in 2024. CoStar executives attributed this decrease to costs related to its acquisition of Matterport and Domain. Although the company’s residential sector, which includes Homes.com, has been the subject of pressure and disdain in recent weeks, it showed strong revenue growth in 2025, jumping from $1.22 billion in 2024 to $1.46 billion. Additionally, the residential operation posted an adjusted EBITDA loss of $230 million in 2025, an improvement over the $361 million adjusted EBTIDA loss recorded in 2024.

In a call with investors and analysts Tuesday evening, CoStar Group founder and CEO Andy Florance, highlighted many of the notable results achieved by the Homes.com network during the last year. Among these achievements was site traffic, with the network recording over  2.1 billion views and 100 million average monthly unique visitors in 2025, according to Comscore data. Executives added that in January, organic traffic was up 134% year-over-year and 21% month-over-month, marking an all-time traffic high. 

“We feel we have achieved a good balance between SEM, SEO and direct traffic,” Florance said. “This allows us to optimize SEM for quality traffic and leads, not just pure quantity.”

Illustrating this, Florance noted that session duration rose nearly a minute annually to roughly four minutes and 30 seconds, while the bounce rate dropped from 63% in January 2025 to 41% in January 2026. 

Additionally, Florance noted that lead volume was up 48% annually in January 2026, while lead volume for Homes.com member agents was up 187% annually, with subscribers paying to promote 216,000 active listings, roughly 9% of all homes for sale in the U.S. in Q4 2025. 

“We now have over 31,000 agent subscribers, generating $100 million in annualized revenue run rate, with 76% of them on annual contracts,” Florance said. “For CoStar, this is the fastest organic revenue build we’ve ever had for a new product, we’ve achieved this revenue level faster than our U.S. competitors, years faster. We have built a dedicated sales force of 600 sales reps to reach the top 750,000 agents in the business.”

A clear path to drive profitability with Homes.com

Looking ahead, based on the success of Apartments.com, Florance said he believes Homes.com can generate $4.75 billion of revenue and $2.85 billion of EBITDA within the next 13 years. 

“Apartments.com has a very similar business model to Homes.com and grew revenue initially at a measured pace, but now over 13 years, has reached $1.2 billion of revenue run rate with very high margins. The growth of apartments and homes looks very similar at this point.,” he said. 

Florance also reiterated that CoStar is reducing its net investment in Homes.com by $300 million in 2026, as the company aims for run rate profitability in 2029 and full year profitability in 2030. 

“We have a clear path to accelerate top-line growth and drive profitability,” Florance said. “Competing U.S. real estate portals suffer from a lack of profitability and low growth, not because there’s MLSs in the U.S., but because they have chosen an inferior business model. In contrast to Homes.com, our U.S. competitors’ primary business model is to sell lower value buyer agency leads to a much smaller audience, rather than marketing the valuable homes. Selling buyer agency leads became their primary business model when their iBuying business models failed spectacularly.” 

AI product is “best in class”

Florance also highlighted his firm’s recently launched Homes AI product, which he said he believes is “the best-in-class and first fully integrated proprietary vertical real estate application built upon the best strengths of the leading LLMs.”

“We strongly believe Homes AI will drive higher engagement, support significant growth in organic traffic and contribute to a meaningful increase in agent subscriptions. Homes AI is either conversational or text interface with a highly intelligent artificial intelligence real estate expert that guides the homebuyer through the search, exploration, comparison of homes, communities and valuations,” he said. “In the first week post-release, Homes AI is having a huge impact on user engagement. Site visitors that hit the AI mode are on the site for 16 minutes, 50 seconds, as opposed to four minutes, 24 seconds for non-users. AI users do nearly four times as many searches, favorite seven times as many properties, look at four times as many properties and submit seven times as many email leads.” 

Florance reiterated that CoStar plans to deploy this technology to its other platforms, a move he believes will “result in substantial competitive advantage for CoStar Group for years to come.”

“CoStar Group is emerging as a clear winner in the artificial intelligence era,” Florance said. “We’re positioned to take a transformative share with the advantage Homes AI gives us. We are using AI to cut significant costs and improve our product offerings and quality. We’re launching new transformative products that would not have been feasible without our AI innovation.”

Additionally, Florance explained how he feels the success of Homes.com will fuel growth across the company, especially when it comes to Apartments.com. 

“Homes.com is our essential gateway to reach the single-family rental market. In addition, just over half of all renters begin their home shopping journey open to renting or buying. Apartments.com needs Homes.com in order to bring those considering buying into the top of the rental funnel on one of our platforms,” he said.

While Florance did not directly address the letters sent by activist investors to CoStar regarding Homes.com earlier this year, he highlighted his confidence and belief in what he and his team are building at CoStar. 

“The results and the plan you heard today reflect what CoStar has always done. Build durable platforms on proprietary data, run them with discipline and compound long-term shareholder value,” he said. “We’ve strengthened our governance and capital allocation oversight, we’re matching strategy with clear financial priorities, profitable growth, expanding adjusted EBITDA, and returns of capital. We’re scaling Homes.com because it strengthens our entire real estate ecosystem globally and the completeness of our data, we’re doing it with a clear investment glide path.”