COSTAR GROUP, INC.CSGP
COSTAR GROUP, INC. Stock Compensation Disclosure
EMPLOYEE BENEFIT PLANS Stock Incentive Plans
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. On April 28, 2025, the Board of Directors approved the CoStar Group, Inc. 2025 Stock Incentive Plan (the “2025 Plan”), subject to stockholder approval, which was obtained on June 26, 2025. All shares of common stock that were authorized for issuance under the 2016 Plan that, as of April 28, 2025, remained available for issuance under the 2016 Plan (excluding shares subject to outstanding awards) were rolled into the 2025 Plan and, following stockholder approval of the 2025 Plan, no further grants will be made under the 2016 Plan.
The 2025 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 2025 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 2025 Plan is determined by the Board of Directors or a committee thereof and is generally to four years, subject to minimum vesting periods of at least one year. In some cases, vesting of awards under the 2025 Plan may be based on performance conditions. The Company initially reserved approximately 13.2 million shares of common stock for issuance under the 2025 Plan, which included shares of common stock that were authorized and remained available for issuance under the 2016 Plan as of April 28, 2025. Any shares of common stock subject to (a) outstanding awards under the 2016 Plan as of April 28, 2025 or (b) outstanding awards under the 2025 Plan that cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised or settled in vested and nonforfeitable shares) will become authorized and unissued under the 2025 Plan. Unless terminated sooner, the 2025 Plan will terminate in June 2035, but will continue to govern unexercised and unexpired awards issued under the 2025 Plan prior to that date. Approximately 9.7 million shares were available for future grant under the 2025 Plan as of December 31, 2025.
In connection with the Matterport Acquisition, the Company assumed Matterport's 2021 Incentive Award Plan and Matterport's Amended and Restated 2011 Stock Incentive Plan, including outstanding restricted stock units and stock options originally granted by Matterport under the Assumed Matterport Plans to continuing employees. These assumed awards will vest in accordance with their original terms, generally over four years. The Company does not intend to issue further grants under these plans. Shares forfeited due to employee termination or expiration are returned to the share pool. As of December 31, 2025, approximately 2.1 million shares remained available under the Assumed Matterport Plans.
As of December 31, 2025, there was approximately $247 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 2.5 years. The income tax benefit realized from stock-based compensation was $5 million, $2 million and $7 million for the years ended December 31, 2025, 2024 and 2023, respectively. See Notes 2 for further discussion of stock-based compensation expense.
Stock Options
Option activity was as follows:
Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contract Life (in years) | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||
Outstanding at December 31, 2022 | 2,178,200 | $ | 41.79 | 5.60 | $ | 80 | |||||||||||||||||
Granted | 140,800 | $ | 76.78 | ||||||||||||||||||||
Exercised | (419,340) | $ | 17.77 | ||||||||||||||||||||
Outstanding at December 31, 2023 | 1,899,660 | $ | 46.69 | 5.53 | $ | 72 | |||||||||||||||||
Granted | 152,900 | $ | 82.47 | ||||||||||||||||||||
Exercised | (122,736) | $ | 58.03 | ||||||||||||||||||||
Canceled or expired | (25,234) | $ | 72.66 | ||||||||||||||||||||
Outstanding at December 31, 2024 | 1,904,590 | $ | 51.48 | 4.80 | $ | 44 | |||||||||||||||||
Assumed in Matterport Acquisition | 1,799,170 | $ | 9.54 | ||||||||||||||||||||
Granted | 212,700 | $ | 78.33 | ||||||||||||||||||||
Exercised | (686,735) | $ | 9.76 | ||||||||||||||||||||
Canceled or expired | (26,000) | $ | 91.98 | ||||||||||||||||||||
Outstanding at December 31, 2025 | 3,203,725 | $ | 38.32 | 3.96 | $ | 102 | |||||||||||||||||
Exercisable at December 31, 2023 | 1,571,105 | $ | 44.32 | 4.93 | $ | 68 | |||||||||||||||||
Exercisable at December 31, 2024 | 1,615,687 | $ | 46.75 | 4.15 | $ | 44 | |||||||||||||||||
Exercisable at December 31, 2025 | 2,849,289 | $ | 33.22 | 3.38 | $ | 102 | |||||||||||||||||
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. The aggregate
intrinsic value of options exercised, determined as of the exercise date, was approximately $48 million, and $4 million, and $24 million for the years ended December 31, 2025, 2024 and 2023, 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, | |||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||
Expected volatility | 35 | % | 35 | % | 35 | % | |||||||||||
Risk-free interest rate | 4.29 | % | 4.28 | % | 3.96 | % | |||||||||||
Expected life (in years) | 5 | 5 | 5 | ||||||||||||||
Weighted-average grant date fair value | $ | 30.05 | $ | 31.57 | $ | 28.87 | |||||||||||
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, 2025:
Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||
Range of Exercise Price | Number of Shares | Weighted-Average Remaining Contractual Life (in years) | Weighted-Average Exercise Price | Number of Shares | Weighted-Average Exercise Price | |||||||||||||||||||||||||||
$4.73 - $9.59 | 1,051,854 | 3.18 | $ | 9.16 | 1,051,854 | $ | 9.16 | |||||||||||||||||||||||||
$9.60 - $27.35 | 406,581 | 1.69 | $ | 19.47 | 406,581 | $ | 19.47 | |||||||||||||||||||||||||
$27.36 - $53.24 | 697,090 | 2.62 | $ | 36.97 | 697,090 | $ | 36.97 | |||||||||||||||||||||||||
$53.25 - $77.56 | 549,600 | 5.38 | $ | 69.05 | 509,799 | $ | 68.44 | |||||||||||||||||||||||||
$77.57 - $91.98 | 498,600 | 7.76 | $ | 83.24 | 183,965 | $ | 89.35 | |||||||||||||||||||||||||
3,203,725 | 3.96 | $ | 38.32 | 2,849,289 | $ | 33.22 | ||||||||||||||||||||||||||
Restricted Stock Awards
The Company grants restricted common stock to certain executive officers, directors, and employees of the Company which vest over a specific service period. Executive officers also receive restricted common stock that vests based on the achievement of certain operating performance goals over a three-year performance period. 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 S&P 500 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 S&P 500 Index over the respective three-year period.
The Company estimates the fair value of its performance-based restricted stock awards with market conditions 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 performance-based restricted stock awards with market conditions were as follows:
Year Ended December 31, | |||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||||||||
Expected volatility | 31 | % | 34 | % | 37 | % | |||||||||||||||||
Risk-free interest rate | 4.23 | % | 4.47 | % | 4.31 | % | |||||||||||||||||
Expected life (in years) | 3 | 3 | 3 | ||||||||||||||||||||
Weighted-average grant date fair value | $ | 85.29 | $ | 86.96 | $ | 81.58 | |||||||||||||||||
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 S&P 500 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, 2025, 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 2025, 2024, and 2023 would be met by their forfeiture dates. The Company recorded a total of approximately $10 million, $7 million, and $14 million of stock-based compensation expense related to restricted stock awards with performance and market conditions for the years ended December 31, 2025, 2024, and 2023, respectively, As of December 31, 2025, the Company expects to record an aggregate stock-based compensation expense of approximately $24 million for performance-based restricted stock awards over the periods 2026, 2027, and 2028.
The following table presents unvested restricted stock awards activity for the year ended December 31, 2025:
Restricted Stock Awards — without Market Condition | Restricted Stock Awards — with Market Condition | ||||||||||||||||||||||
Number of Shares | Weighted-Average Grant Date Fair Value per Share | Number of Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||||||||||||
Unvested restricted stock awards at December 31, 2024 | 2,554,989 | $ | 76.19 | 733,200 | $ | 81.49 | |||||||||||||||||
Granted | 2,316,296 | $ | 79.04 | 435,120 | $ | 85.29 | |||||||||||||||||
Vested | (898,926) | $ | 74.47 | (124,068) | $ | 71.19 | |||||||||||||||||
Canceled | (329,149) | $ | 75.81 | (48,252) | $ | 71.19 | |||||||||||||||||
Unvested restricted stock awards at December 31, 2025 | 3,643,210 | $ | 78.32 | 996,000 | $ | 84.93 | |||||||||||||||||
Restricted Stock Units
The following table presents unvested restricted stock units activity for the year ended December 31, 2025:
Number of Units | Weighted-Average Grant Date Fair Value per Share | ||||||||||
Unvested restricted stock units at December 31, 2024 | 23,532 | $ | 73.88 | ||||||||
Assumed in Matterport Acquisition | 2,256,423 | $ | 75.63 | ||||||||
Granted | 115,654 | $ | 78.57 | ||||||||
Vested | (1,304,354) | $ | 75.60 | ||||||||
Canceled | (376,335) | $ | 75.64 | ||||||||
Unvested restricted stock units at December 31, 2025 | 714,920 | $ | 76.09 | ||||||||
Management Stock Purchase Plan
The Board of Directors originally adopted the Company’s Management Stock Purchase Plan in December 2017 and the plan was subsequently amended and restated in December 2025. The intent of the MSPP is to provide select 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 and 2025 Plan. Under the MSPP, participants are permitted to elect to defer up to 90% (or such other percentage determined by the Compensation Committee of the Board of Directors) 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 95,936 and 57,498 DSUs during the years 2025 and 2024, respectively. The expense related to the Matching RSUs is recognized over the four-year vesting period following the grant date.
The following tables presents the Matching RSU activity for the year ended December 31, 2025:
Number of Matching RSU Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||
Unvested MSPP restricted stock units at December 31, 2024 | 174,730 | $ | 72.17 | ||||||||
Granted | 95,936 | $ | 77.60 | ||||||||
Vested | (22,670) | $ | 83.79 | ||||||||
Canceled | (7,613) | $ | 78.84 | ||||||||
Unvested MSPP restricted stock units at December 31, 2025 | 240,383 | $ | 73.03 | ||||||||
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 2025, 2024, and 2023, 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, 2025, 2024, and 2023 were approximately $33
million, $26 million, and $26 million, respectively. The Company had no administrative expenses in connection with the 401(k) Plan for each of the years ended December 31, 2025, 2024, and 2023.
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 2025, 2024, and 2023, 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, 2025, 2024, and 2023, were approximately $2 million, $2 million, and $1 million, respectively.
Employee Stock Purchase Plan
As of August 1, 2006, the Company introduced an ESPP, pursuant to which eligible employees participating in the plan authorize the Company to withhold specified amounts from the employees’ compensation and use the withheld amounts to purchase CoStar Group Shares at 90% of the market price. Participating employees are able to purchase common stock under this plan during each offering period. An offering period begins the second Saturday before each of the Company’s regular pay dates and ends on each of the Company’s regular pay dates. On June 2, 2021, the Company’s stockholders approved an amendment to the ESPP to increase the number of shares available for purchase under the ESPP by 9.7 million shares. The Company registered the issuance of these additional shares under the ESPP pursuant to the registration statement filed on July 28, 2021. There were 292,559 and 544,587 shares available for purchase under the ESPP as of December 31, 2025 and 2024, respectively, and approximately 252,028 and 237,741 CoStar Group Shares were purchased under the ESPP during 2025 and 2024, respectively.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.