CoStar’s latest results underscore a pivot in investor attention from cyclical transaction volumes to recurring subscription strength in real estate information services. Net new bookings, a key forward-looking metric for subscription firms, rose 92 percent from a year earlier to $84 million, driven in particular by Homes.com and related platforms. That improvement implies prior-year net new bookings of roughly $44 million, highlighting a rapid acceleration in sales momentum for CoStar’s consumer and enterprise subscription channels.

The company said the stronger-than-expected subscription performance prompted management to lift its full-year revenue outlook, signaling confidence that the pipeline will convert into sustained revenue streams. For a firm whose value hinges on durable, contractually backed sales, accelerating bookings are important: they form the basis of future recurring revenue and reduce reliance on lumpy, rate-sensitive transactional business.

However, investor reaction to the update was mixed. CoStar projected fourth-quarter adjusted earnings per share between $0.26 and $0.28, with a midpoint of $0.27 — slightly below the analyst consensus of $0.28. Shares dipped nearly 3 percent in after-hours trading, reflecting market sensitivity to earnings per share as an indicator of near-term profitability and margin trends. The reaction suggests investors are weighing top-line durability against pressure on margins or continued investment spending that could compress near-term earnings.

Analysts and market participants will watch how much of the booking surge translates into recognized revenue and how quickly margins expand on that revenue. Net new bookings are a leading indicator: strong booking growth typically portends higher revenue in subsequent quarters as contracts are recognized, but the cadence depends on contract duration, billing arrangements and the timing of customer onboarding. For CoStar, converting Homes.com momentum into enterprise-scale profitability will be key to justifying valuations that already incorporate expectations for steady subscription growth.

The company’s guidance and market reaction also illustrate a broader trend in real estate technology: investors increasingly favor predictable, subscription-based revenue amid a macroeconomic backdrop that has diminished transactional activity in commercial markets. Subscription products that aggregate listings, data and analytics can provide insulation against cycles in property sales and leasing, improving revenue visibility for firms that scale into multiple verticals.

Policymakers and economists tracking commercial real estate will note that firms such as CoStar are recasting their business models around data services rather than brokerage-driven transaction fees. For markets, that shift could mean a more stable revenue base for information providers even if broader CRE transaction volumes remain muted in a higher-rate environment.

CoStar’s upgrade to its revenue outlook, its 92 percent bookings jump and the narrow miss on EPS expectations together paint a nuanced picture: durable demand for subscription services is real, but investors remain attentive to near-term profitability as the company invests to convert bookings into long-term earnings growth.