CoStar Group Posts Record Q3 Revenue and Raises EBITDA Guidance but Stock Plunges 12% on Vexcel Acquisition

CoStar Group reported record third-quarter 2026 revenue of $952 million, up 14% from $834 million a year earlier, beating the consensus estimate of $946.2 million. Net income surged to $74 million, a $105 million improvement year-over-year, while adjusted EBITDA reached $229 million, its highest ever and roughly double the prior-year level. Adjusted EPS came in at $0.38, topping the $0.34 estimate.

Alongside the earnings release, CoStar announced a definitive agreement to acquire Vexcel Group, the operator of one of the world's largest survey-grade aerial imagery programs, for approximately $730 million in cash. CoStar plans to use cash on hand and its existing revolving credit facility to fund the deal, which is expected to close in the first quarter of 2027, subject to regulatory approvals. The company said the acquisition will add tens of billions of AI-derived data fields and power richer search and discovery across its platforms. Goldman Sachs and Latham and Watkins advised CoStar; William Blair and Snell and Wilmer advised Vexcel.

Despite the earnings beat, CSGP shares fell roughly 12%, with the stock trading at approximately $31.21 in after-hours activity on October 27. The steep decline suggests investors reacted negatively to the $730 million cash acquisition. For the fourth quarter, CoStar guided revenue of $976 million to $996 million, roughly in line with the $985.1 million consensus. The company raised its full-year 2026 adjusted EBITDA outlook to $820 million to $840 million while keeping its full-year revenue guidance of $3.75 billion to $3.77 billion near the $3.755 billion estimate.