"On February 4, 2026, D.E. Shaw released a letter blasting CoStar's "reckless spending," estimating the company will have spent over $3 billion on Homes.com by the end of 2026 while generating only roughly $80 million in annual revenue and over $2 billion in cumulative losses. Both firms are calling for CoStar to divest or shut down its residential operations to refocus on its core commercial real estate business."
"Quarterly Performance: In Q1 2025, CoStar Group reported a net loss of $15 million, a decline from a $7 million profit in Q1 2024. This was primarily attributed to costs from the $1.6 billion acquisition of Matterport and ongoing marketing for Homes.com. Revenue Growth: Despite the high investment costs, CoStar reported its 56th consecutive quarter of revenue growth in Q1 2025, with total revenue rising 12% to $732 million. Operational Expansion: The Homes.com salesforce grew to 370 people in early 2025, with a target of 500 representatives."
"In response, CoStar has robustly defended its strategy, claiming that abandoning Homes.com would cause "irreparable harm" and that the platform is essential to its digital ecosystem. To appease shareholders, the company has announced a plan to reduce its annual investment in Homes.com by $300 million in 2026 and authorized a new $1.5 billion share repurchase program."
D.E. Shaw and Elliott accuse CoStar of excessive spending on Homes.com, estimating over $3 billion spent by end-2026, roughly $80 million annual revenue, and over $2 billion in cumulative losses. Both investors call for divestiture or shutdown of residential operations to refocus on commercial real estate. CoStar reported a Q1 2025 net loss of $15 million versus a $7 million profit in Q1 2024, citing the $1.6 billion Matterport acquisition and Homes.com marketing costs. CoStar nonetheless posted its 56th consecutive quarter of revenue growth, with Q1 revenue up 12% to $732 million. Homes.com headcount grew to 370 with a 500 target. CoStar defended Homes.com as essential, will cut Homes.com investment by $300 million in 2026, and authorized a $1.5 billion share repurchase program.
Read at Boston Condos For Sale Ford Realty
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