Good afternoon. My name is Hannah, and I will be your conference operator today. At this time, I would like to welcome everyone to the CoStar Group First Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Cyndi Eakin, Head of Investor Relations, will read the safe harbor statement. Cyndi, you may begin. Thank you, Hannah. Good evening, and thank you all for joining us to discuss the first quarter 2023 results of the CoStar Group. Before I turn the call over to Andy Florance, CoStar's CEO and founder, and Scott Wheeler, our CFO, I would like to review our safe harbor statement. Certain portions of the discussion today may contain forward-looking statements, including the company's outlook and expectations for the second quarter and the full year of 2023 based on current beliefs and assumptions. Forward-looking statements involve many risks, uncertainties, assumptions, estimates, and other factors that can cause actual results to differ materially from such statements. Important factors that can cause actual results to differ include, but are not limited to those stated in CoStar Group's press release issued earlier today and in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q under the heading Risk Factors. All forward-looking statements are based on the information available to CoStar on the date of this call. CoStar assumes no obligation to update these statements, whether as a result of new information, future events, or otherwise. Reconciliation to the most directly comparable GAAP measure of non-GAAP financial measures discussed on this call, including EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per diluted share, and forward-looking non-GAAP guidance, are also shown in detail on our press release issued today, along with definitions for those terms. The press release is available on our website located at costargroup.com under Press Room. As a reminder, today's conference call is being webcast, and the link is also available on our website under Investors. Please refer to today's press release on how to access the replay of this call. With that, I would like to turn the call over to our Founder and CEO, Andy Florance. Good afternoon, and thank you for joining us for CoStar Group's first quarter 2023 earnings call. Revenue for the first quarter of 2023 was $584 million or 13% growth year-over-year, coming at the high end of our guidance range and above consensus estimates. I'm very pleased with the growth of our commercial information and non-residential marketplace businesses, which delivered 15% year-over-year revenue growth in the first quarter. I'm also very pleased with the progress we're making in building the new Homes.com, which I believe will become the best online residential marketplace in the world, bar none. We started the year strong with net new sales of $80 million, our second highest sales quarter ever, and a 17% increase over the first quarter of the prior year. Apartments.com achieved the highest net new sales quarter for the second quarter in a row. LoopNet achieved outstanding results in the quarter with a 100% increase in net new sales over the first quarter of last year. We hit a new high-water mark in traffic to our marketplaces in March. Monthly unique visitors totaled 94 million for the month with Apartments.com, Homes.com, LoopNet, Lands, BizBuySell, Belbex, BureauxLocaux, Business Immo, and all of our marketplaces contributing up to tens of millions of unique visitors. Apartments.com continued its impressive run with another outstanding quarter. Apartments.com revenue was $211 million in the first quarter, climbing to 20% year-over-year for the first time since the first quarter of 2021. Net new sales bookings were at an all-time high, breaking the record set just last quarter with an increase of 110% over the first quarter of 2022. Apartments.com, while very successful, has millions of apartments that do not yet advertise on the site. We are focused on continuing to grow our sales force to reach this huge potential untapped audience. Our attention to attracting the best talent and excellent onboarding and training of new hires is paying good dividends. Our sales team productivity is up over 40% compared to last year for hires who've been with us less than a year. We are committed to excellent customer service, and that's a big contributor to our success. The apartment sales team conducted close to 140,000 quality meetings this quarter, which is 24% higher than the same quarter last year. Of those 140,000 quality meetings, over 50,000 were in person, a 45% increase over the first quarter of 2022. This attention to servicing continues to be well received by our clients, as evidenced by our industry-leading Net Promoter Score of 94. The number of properties advertising on our platform continues to expand and is now at a record 64,000 properties. Our customers are selecting higher ad package levels to obtain more leads, as evidenced by our average revenue per property increase of 14% over the prior year. The economic fundamentals of the apartment industry continued to move in our favor. The vacancy rate for three, four, and five-star properties rose another 30 basis points to 7.7% in the first quarter. Net deliveries continue to outpace net absorption in the quarter, with twice the units delivered as absorbed. Deliveries in 2023 are expected to be the highest in over 40 years. Vacancy rates are forecast to increase for the remainder of the year. There are currently over 1 million units under construction, with approximately 750,000 of them being at the top end of the market. Pressure on these assets will be intense throughout 2023 as rent levels moderate. We expect vacancy rates to remain elevated by historical standards. All this could create a jet stream-like tailwind for advertising demand. March marked the official roll to the new 2023 Apartments.com marketing campaign with new TV commercials, streaming videos, and streaming audio commercials. Jeff Goldblum as Brad Bellflower was featured during March Madness and all month across top networks like CBS, Bravo, TBS, TNT, and more. We launched a new social media campaign. Our streaming audio and podcast campaigns have hit the airwaves, and engagements are at an all-time high. We anticipate that our 2023 campaign will yield 12 billion media impressions. The early results of this campaign are strong, with our first quarter unaided brand awareness for Apartments.com jumping to our highest score ever. Apartments.com continues to attract qualified renters to our platform with an average of over 43 million monthly unique visitors in the quarter, according to Google Analytics. Apartments.com is also benefiting from the addition of Homes.com rental area to its network and the tremendous growth in traffic to Homes.com. Visitors to the Homes.com rental area are up 83% since the fourth quarter of 2022, and those visitors delivered approximately 200,000 leads to our paying Apartments.com customers. That's up 124% from just last quarter. With more content than ever before on our network, including unit-level details and touring capabilities, our lead quality continues to outperform our competitors. Our mobile sessions were an all-time high in the first quarter, with 75% of Apartments.com user sessions conducted on a mobile device. Just 5 keywords now account for 33% of unbranded search activity on these devices. When the top 376 cities in the United States are examined, Apartments.com ranks number one for all 5 of these terms 99% of the time. The combination of the kickoff of our 2023 marketing campaign market conditions and our larger and more seasoned sales teams helped continue to drive strong results. In sum, I'm very pleased to report that we expect Apartments.com to deliver 22%-23% revenue growth in 2023. I'm very excited about the progress we've made on many Homes.com initiatives in this short period of time. Last year, we laid out the key milestones for Homes.com: grow, monetize, and scale. The grow phase focused on increasing traffic, engaging buyers and sellers on our platform. Our initial goal in the grow phase was to achieve 25 million unique visitors, while our goal in the scale phase was to reach 50 million unique visitors. Traffic to our Homes.com network grew dramatically. We reached 27 million unique visitors in March, according to Google Analytics. Month to date in April, traffic to Homes.com grew 53% over the same period March to date. As of this morning, for the partial month to date, we have already seen 28 million unique visitors to Homes.com network. Unique visitors for our Homes.com network is 88% of above March of last year, and traffic to our Homes.com site is up 183% compared to last year. We are now four times the traffic levels from when we purchased Homes.com almost two years ago. By comparison, 2 years after we purchased Apartments.com, we'd only doubled the traffic. As we continue to build Homes.com and combine single-family residential with rental content from Apartments.com, we can now aggregate our traffic across both property marketplaces. In total, monthly unique visitors in March for our Apartments.com and Homes.com network was 72 million, according to Google Analytics. For the fourth quarter of 2022, Realtor.com reported 66 million monthly unique visitors, while Redfin reported 44 million average monthly unique visitors. According to Comscore, Homes.com unique visitors were up 153% year-over-year in March. Realtor.com's monthly unique visitors decreased by 20%. Zillow's unique visitors were down 5%, and Redfin's traffic increased 5% compared to March of last year. Alongside our increase in consumer traffic engagement, agent engagement continues to improve. We now have approximately 1.1 million agents registered in the Homes.com network, up 37% from the first quarter of 2022. Active users or those who visit the site monthly have increased 64% versus last year. I believe the engagement will continue to improve as we're providing millions of free leads to agents that could generate $ billions of commission dollars for them under our Your Listing, Your Lead business model. In the months ahead, we're intensely focused on product development, generating proprietary content, and building consumer traffic. Our team is extremely talented and singularly focused on winning. I wish I could share more detail on some of the great success stories, but I cannot for competitive reasons. With the progress we've made to date, I remain confident that we're on track to begin monetizing Homes.com advertising product in the later part of this year. LoopNet revenue was $63 million for the first quarter, up 16% year-over-year and accelerating from 12% growth rate in the fourth quarter of 2022. Our investment in building a direct sales force for LoopNet's paying off. Net new bookings are up 100% year-over-year, which is directly attributable to our larger and more effective sales teams. The productivity for sellers in their first year has increased in each of the last four quarters as new reps ramp and become more productive. Sales of new Signature Ads are up 27% year-over-year. LoopNet captured record traffic in the quarter with 14 million average monthly unique visitors to a network of marketplaces, up 12% year-over-year. According to Semrush, LoopNet has eight times the traffic of our nearest competitor in March. We're also seeing traffic gains in Canada as our unique visitors for LoopNet Canada in the first quarter are over five times the unique visitors of our nearest competitor there. These accomplishments and investments reinforce our position as the most popular place to find a space and give me confidence in our ability to achieve our target of 18%-19% revenue growth in 2023. We continue to focus on international expansion with our revenues there expected to exceed $80 million in 2023, by revenue, our international business now ranks number four behind Apartments.com, CoStar, and LoopNet. We now have over 500 international employees, including 200 researchers and 130 sales representatives. In Europe, we currently operate in more than 12 cities and 5 countries with aspirations to expand our CoStar and LoopNet products into most of these major markets. Currently, CoStar and LoopNet are only offered in the U.S., Canada, and U.K. We believe there's a EUR 30 billion European market for real estate information services and marketplaces, which is roughly the same size as our North American market. A key step to capturing a significant share of that market is building and selling CoStar and LoopNet on a pan-European basis. One of the core unique competencies of our research operations is our on-the-ground field research operations. Our goal over the next few years is to photograph, map, and document all of the commercial properties 10,000 sq ft or larger, roughly 1,000 square meters, in 15 European countries and approximately 36 cities. We will divide each city into one-kilometer grids and capture all the relevant building inventory in each area. We anticipate capturing information on more than 1.5 million properties with a combined value in the trillions of euros. We have done this before in the U.S., Canada, and the U.K. In each instance, these massive efforts have resulted in a profitable and very valuable information asset. CoStar revenue increased $225 million in the first quarter, up 13%. For each month of the quarter, we saw a record number of distinct users in CoStar. In March, exceeded 140,000 distinct users. Usage of CoStar and product engagement continues to grow, as evidenced by nearly 6.5 million logins in the first quarter, a 26% increase over the last year. During those user sessions, property searches exceeded 20 million each month, and property detail views averaged 15 million a month. Whilst CoStar continues to be the premier product for real estate professionals, brokers, significant opportunities exist for selling to new customers. We have a 75%-plus penetration rate amongst brokerages with five or more brokers and continue to prospect smaller firms with an annual revenue potential of $96 million. In addition, our sales teams are focused on owners, lenders, and corporations where we have a significant addressable market. We believe we have over 51,000 owner prospects, 10,000 lender prospects, and almost 4,000 corporations with 50 or more locations for a total of $1.4 billion in potential revenue. For the first time this quarter, product demonstrations to these aforementioned prospects exceeded those to the broker customers and broker prospects. Overall, we're seeing slightly lower net new bookings for CoStar, still expect double-digit revenue growth in 2023. We recently incorporated information on 12,600 real estate investment funds and 70,000 commercial properties within those funds into CoStar. This fund information helps clients understand who has capital available to invest into commercial real estate and what sort of product types they want to invest in and where they want to invest. We continue to focus on our banking customers with our lender product. Last month marked the one-year anniversary of releasing our fully integrated solution for lenders in CoStar. Sales continue to be strong in Q1, ending our first year by breaking the 150 total client milestone. These clients span many lender types, including banks, life insurance companies, credit unions, and private lenders, while ranging in size from $50 million CRE portfolios to over $50 billion CRE portfolios, proving a large opportunity moving forward. Our sales pipeline for lender is strong, and we expect to build on that pipeline as the solution for lenders is uniquely positioned for continued growth in this uncertain environment. The value proposition is unmatched. No other company can connect a lender's portfolio to our rich property-level information and provide a fully integrated credit model that assesses refinance risks as well as stress tests a portfolio for an economic downturn. We expect continued sales opportunities due to regulators calling for increased portfolio surveillance by CRE-focused lenders for multiple reasons, including the concern over office properties, rising rates, refinancing risks, and the threat of a potential economic downturn. I remain confident in our ability to grow CoStar revenue given our mission-critical data, ongoing product enhancements, and the continued expansion and diversification of our customer base. Although overall CRE transaction volume was down 51% year-over-year, Ten-X continues to outperform the market with a solid 60% trade rate, up 3 times that of the offline market and up 51% in the fourth quarter of 2022. We also saw the average number of bidders per auction on the platform increased over 3.2 in the first quarter compared to 2.6 in the fourth quarter of 2022. In Q1 2023, Ten-X saw the average asset value increase 18% over the last year from $3.3 million to $3.9 million. Average winning bid price increased 29% compared to the prior year from $3.1 million up to $4 million. The average buyer premium increased 35% over the last year from $71,000 to $97,000. I believe this indicates that our expanded sales force is delivering higher quality assets that investors are seeking even in a price-challenged market. With roughly $1.5 trillion of CRE debt maturing in the next 24 months and $700 billion maturing by year-end, we expect the continued interest rate-driven market shift to drive transaction volume up. Ten-X is already seeing an increase in momentum in the second quarter with $1.7 billion of inventory coming to the platform, a 44% increase from Q2 of 2022. Ten-X remains the go-to platform for accelerated asset transactions which buyers, sellers, brokers, lenders, and special servicers benefit from as the markets continue to shift. Our lands business is focused on creating opportunities for our rural land clients to capture more leads for their priority properties for sale with Signature Ad opportunities. This business continues its consistent profitable growth with 14% year-over-year revenue growth. STR has achieved a record sales quarter with the highest net new in its history and delivered 14% year-over-year revenue growth on a constant currency basis compared to the first quarter of 2022. We're on track to launch our new benchmarking product this month and execute our plan of migrating more than 175,000 users to the CoStar platform. This release will open access to new clients, including owners, hotel operators, and brands that will enable execution of our integrated strategy. Owners will have clearer visibility into asset performance, market performance, and competitive landscape. This insight is invaluable for asset acquisition, repositioning, and dispositioning. Operators will have access to data and tools to better forecast, budget, yield manage, and identify demand drivers and supply implications. Hotel brands will have a full suite to support and develop teams, franchise owners, relationships, and management contracts. What's not to love about all that? Higher interest rates and increased economic uncertainty have reduced transaction volumes in the market and impacted prices since the second half of 2022. As I mentioned earlier, transaction volumes declined by over 50% year-over-year in the first quarter of 2023 in the commercial real estate markets. In addition, we're now seeing asset price declines for 7 consecutive months, with valuations off by 8% over that time. The office sector continues to show real weakness, with vacancy rates reaching almost 13% in the first quarter, phantom vacancy rates much higher than that, and it's matching the all-time peak seen after the Great Financial Crisis. With continued weak demand, negative net absorption, another 58 million sq ft of delivery is expected in 2023, we expect vacancies to push higher for the foreseeable future. Not surprisingly, delinquency rates on commercial property loans have doubled in the past 3 months to 2.8%, and it's probably in actuality higher than that. Overall sales prices for office buildings are down 26% from their peak in Q1 of 2022. Fortunately, our Ten-X platform is well positioned to assist with the recapitalization of those properties as they come to market. The residential housing market remains constrained. Mortgage rates are down from their earlier highs at the end of last year, but affordability is still low by historical standards. Sales of existing homes tipped higher earlier this year after 12 consecutive months of declines. Sales of new homes have trended higher since reaching a bottom last year, as builders are offering incentives like rate buydowns to clear inventories. Inventories remain tight, which should prevent values from declining rapidly. The retail sector continues to benefit from reduced store closures, steady demand, and minimal new supply. Available retail space fell to a new all-time low of 4.7% during the first quarter, leaving it difficult to find space. Strong market. Industrial net absorption has slowed in the first quarter after two years of record-high net absorption, and tenant demand is beginning to moderate. At 4.3%, the US industrial vacancy rate is half of the levels recorded 10 years ago, and rents have climbed 10% over the last 12 months. Still a strong market. I'm very pleased with the performance of our business in the first quarter. CoStar continues to grow and remain resilient despite industry headwinds elsewhere. Apartments.com and LoopNet show accelerating countercyclical sales success. I am very optimistic about the progress we're making building traffic and value at Homes.com. We're very pleased to see our array of diverse platforms draw in more than 94 million unique visitors in March. I look forward to reporting 100 million unique visitors before too long. At this point, I'm gonna turn the call over to the very capable hands of our Chief Financial Officer, Scott Wheeler. Thank you, Andy. You're welcome. It's a great way to start the year again. Financially, we are certainly on track, if not slightly ahead of where we expected to be this quarter and for the year with regards to revenue and our revenue growth outlook, which is a 13% total revenue growth for 2023. One of our sell side analysts recently pointed out that we have logged 50 quarters in a row of double-digit revenue growth. We actually just completed 48 consecutive quarters of double-digit revenue growth, who's counting? I actually used my favorite AI tool, which I call an Excel spreadsheet, to go back and figure out how many actual quarters we had double-digit growth. It was back in 2011. I am applying AI here at CoStar to our financial results. It might just be I. The question of my I sometimes. Revenue by services. CoStar revenue grew 13% in the first quarter, which was in line with our guidance expectations. CoStar expansion into new customers remained strong, with new business sales consistently or slightly above the levels we've seen since mid-2021 after the pandemic. The brokers are certainly facing a tough transaction and leasing environment, which dampened the new broker sales and renewal rates, primarily among the very small broker shops. We expect that our revenue forecast will reflect the current market conditions, which would have CoStar revenue growing at 10% for the second quarter and for the full year of 2023. For multifamily, we added more than $35 million in year-over-year revenue during the first quarter on our way to once again achieving 20% revenue growth. Our bigger sales team is giving us the capacity to reach more and more prospective customers that have never advertised with Apartments.com. The number of paid properties increased by 8% in the first quarter of 2023 on a year-over-year basis. This is the largest volume increase we've seen since the second quarter of 2021. In addition, we're seeing more and more customers upgrading to higher level ads versus those that are downgrading to lower level ads. This net revenue contribution from the positive ad level mix is now back to the levels we saw last during the pandemic surge, which was the second quarter of 2020, which were certainly good, strong, high levels. Looking ahead, we expect these trends to continue with rising vacancy rates and increased productivity from our recent sales force expansion classes. We're now forecasting revenue growth, as Andy said, of 23% for multifamily for the year and for the second quarter, up from our prior guidance of 20% revenue growth for 2023. LoopNet revenue grew 16% in the first quarter, up from 12% revenue growth in the fourth quarter of 2022, thanks to the success of our dedicated LoopNet sales team. We expect 18% revenue growth for LoopNet in the second quarter of 2023, with a full year revenue growth that we now expect at the upper end of our 18%-19% guidance range. Revenue from information services increased 12% in the first quarter at the upper end of the guidance range, with strong results from STR and revenue contributions from our growing European businesses. We expect revenue growth for both the second quarter and the full year of 2023 to be 10%, slightly above the 7%-9% full year revenue growth guidance range that we provided in February. Our first quarter residential revenue came in at $13 million as expected. Estimated revenue for the second quarter is around $12 million, with our full year 2023 revenue expectations remaining unchanged at $45 million. As a reminder, we've not assumed any revenues from Homes.com advertising products in our 2023 outlook. Other marketplace revenue contracted 4% in the first quarter of 2023, which was actually an improvement from the 10%-13% first quarter revenue decline we expected a few months ago. The trade rates for Ten-X had improved sequentially in the first quarter, providing the extra revenue versus our forecast. We now expect revenue from other marketplaces to grow in the mid to high single digits in the second quarter, and we're increasing our full-year revenue growth estimate to 11%-12% based on the better-than-expected first quarter results. Adjusted EBITDA was $123 million in the first quarter, $7 million above the high end of our guidance range. The outperformance was primarily attributable to our strong revenue performance and the timing of marketing spend in the quarter, which we expect to reverse as we move into our peak marketing season in the second and third quarters. Our adjusted EBITDA margin was 21% in the first quarter, one percentage point higher than our guidance. The size of the sales force in total remains largely unchanged from where we were at the end of 2022. The Apartments and LoopNet marketplace teams grew in the first quarter sequentially, offset by modest attrition across the rest of the sales force. Our focus for the rest of 2023 is to continue to increase our sales teams in the marketplace businesses, including Apartments, LoopNet, Land.com, and Residential. Our contract renewal rates remain in the 90%-91% range, while the renewal rate in the first quarter for customers who've been subscribers for five years or longer remains strong at 95%. Subscription revenue on annual contracts increased to 82% for the first quarter of 2023, up from 81% at the end of 2022 and 80% a year ago. Both CoStar and Apartments.com have our highest annual subscription concentration percentages, as these two products grow in relative size, we see our total subscription percentage increasing along with it. With a strong start to the year, we are reconfirming our revenue guidance and raising the midpoint of our guidance range. The new revenue range of $2.465 billion to $2.48 billion implies revenue growth of 13%-14% for the year. Second quarter 2023 revenue is expected to range from $603 million to $608 million, representing revenue growth of approximately 13% at the midpoint. We are also reconfirming our adjusted EBITDA guidance and raising the midpoint of our guidance range. The new adjusted EBITDA forecast range is now $505 million to $520 million. Our investments in the Homes.com residential marketplace are yielding excellent results. Our investment plans remains unchanged from what we communicated in February. For the second quarter of 2023, adjusted EBITDA is expected to be in the range of $118 million-$123 million, indicating a second quarter adjusted EBITDA margin of 20%. Before we move to Q&A, I want to reassure everyone that our cash and our investments are safe and sound, with no adverse impacts from the failure of the Silicon Valley Bank and the other recent banking turmoils. We also have nothing related to First Republic Bank, by the way. We maintain a very conservative treasury strategy that keeps our cash with only the strongest financial institutions and in the safest short-term investments. We actively manage our deposits to maximize interest income within the confines of our low-risk investment practices. In the first quarter, our $5.1 billion of cash earned a net interest of approximately 4.1% for the quarter, producing approximately $44 million of net interest income after deducting the interest expense on our debt. Projecting these results for the rest of the year is expected to yield net interest income of approximately $195 million, which is well above our prior estimates. We're raising our outlook for non-GAAP net income per diluted share to include our latest estimate of net interest income. We now expect non-GAAP net income per diluted share of $1.21-$1.24, an increase from our prior guidance of around 15%, which is $0.15 per diluted share at the midpoint. That's about wraps it up for me. You can see we're in very strong financial position as we head into the second quarter, our growth, our investment, and our profit plans are all on track for another great year. With that, I will now turn the call back over to our operator for a little bit of Q&A. Hannah, back to you. Of course. At this time, I would like to remind everyone, in order to ask a question, press star, then the 1 on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. Each analyst is permitted to ask 1 question. The first question comes from the line of George Tong with Goldman Sachs. You may proceed. Hi. Thanks. Good afternoon. You trimmed your CoStar Suite full year revenue growth guidance from 12% to 10%. How de-risked is that outlook given the current state of the commercial real estate market? Related to that, you mentioned smaller broker weakness. Can you comment on the performance of your other customer types at CoStar Suite as well as the latest pricing trends that you're realizing? Thank you. Sure, George. Thanks for the question. We do take a close look at all of our different customer sectors and how we're performing. As I mentioned, the sales that we're making into the growth sectors, owners, investors, lenders are at, if not slightly above the levels we've been doing over the last four to six quarters. You just really see this one isolated sector that is the smallest broker shops that are being impacted by the downturn in transactions and reduction in effort and potential layoffs in that industry. We've taken a close look at that. We reflect those trends. We think that, you know, the second and third quarters are gonna be rough in the industry. I think those are pretty well known economically. We ride along with that sort of expectation and would hope that it starts to get better in the latter part of the year. We build all that into our forecast, and we see that in reflected in the 10%. With the number of sectors holding up as strong as we have and with the bigger sales force, we don't see this as being something that would be as disruptive as what happened in the pandemic or anything previous for us. W e're pretty confident with what we've got built in so far. Pricing? A question on pricing. Yeah. We follow inflation-level pricing, so our, as inflation levels come down, then we reduce the increases that we put in for renewals to just stay at the rate of inflation. That's all built in. Got it. Very helpful. Thank you. Sure. Thank you, Mr. Tong. The next question is from the line of Peter Christiansen with Citi. You may proceed. Good afternoon. Thanks for the question. Andy, I just wondering, can you elaborate a little bit on how you're seeing the pipeline for Ten-X, the relationships that you've built, I guess, since acquiring the asset. How you see that pipeline evolving, I guess, as potentially we hit more distress over the coming months, years. How do you see that evolving versus how Ten-X was prior to being acquired? Thank you. Surprisingly, still today, the vast majority of product that's trading on the platform is performing assets. It takes quite some time from when market conditions become adverse to when you actually see effectively capitulation and people begin to exit investments that have gone south. We're still a performing asset platform at this point, but we're seeing, you know, less spread between buyer expectations and seller expectations. There's the trade rates are coming up. You can see the volume increasing this quarter as that happens, and we would expect that to continue to climb up through the year. We have a much larger sales organization than we've had in the past to be able to capture that opportunity. Plus we've also completely integrated all of the systems of Ten-X into the CoStar and LoopNet platforms. So we're dramatically more efficient as we want to take on new assets. We also are more disciplined now on making sure that we do not bring on any assets that the seller does not have realistic expectations for. So our commitment committee on the Ten-X management team is very disciplined. So, you know, it's a somewhat awkward. You don't want to see a flood of inventory coming into Ten-X because it means that the market's gone really south. But with the federal government continuing to work from home, you'll probably see a lot of office assets go down Okay. Thank you. Thank you, Mr. Christiansen. The next question is from Stephen Sheldon with William Blair. You may proceed. Hey, thanks. At LoopNet, you know, really strong booking trends there. Do you think you're at full stride there with the expanded sales force, or is there still a lot more to go, I guess, in terms of ramping productivity? Can you talk about the demand environment at LoopNet, given the trend in office vacancy rates? It seems like a great environment right now, but do you also think there could be a point where vacancy rates trend too high, some property owners capitulate and just assume they're not gonna find tenants and therefore reduce ad spend? I guess essentially, is there an optimal range for office vacancy rates from your perspective to maximize demand at LoopNet, and if so, what do you think that is? Yeah, I don't think there's an upper end. What we see in the past, you know, we've been selling advertising solutions to commercial property owners for quite some time now, from when it was in books to when it was in CD-ROMs to when it's on the internet. When the market conditions get really awful at the upper end of high vacancy rates, what you find is that the assets recapitalize and new owner comes in at a much lower cost basis. The cost of our advertising is de minimis or irrelevant in the context of the cost of the building, and they're actually very aggressive in advertising. The biggest advertising spends I've ever seen is from owners who picked up bankrupt assets, new owners who picked up. They're basically coming in there with lower price points than the remaining properties that hadn't yet gone under because they've got a lower cost basis. I think there's no I don't believe that there's any upper end to vacancy rate and demand for our asset LoopNet. Obviously right when someone's going bankrupt, they stop, but it's made up for by now the new owner coming in aggressively. I actually think we have a lot of room to go. I look at one or two other businesses overseas, and I look at what they're generating in revenue for commercial real estate advertising on the internet and just interpolate that by GDP, and it suggests we have a doubling, a tripling, and a quadrupling of revenue to go. I'm looking forward to continuing to grow the LoopNet sales force and continuing to optimize our pricing models and to increase the functionality. I think that moving LoopNet pan-European will have a huge benefit. I spent a lot of time listening to focus group interviews with corporate users and investors who move across borders. As we provide a solution that crosses borders, I think that will increase demand for assets marketed on LoopNet, which would be another positive demand driver. If you can't tell, I'm bullish on LoopNet and remain bullish on LoopNet. As you should. Though it was once a competitor. Great. Thank you. Mm-hmm. Thank you, Mr. Sheldon. The next question is from John Campbell with Stephens. You may proceed. Hey, guys. Good afternoon. Thanks for taking our questions. Absolutely. The first one is, or I guess a two-part question here. First off, great job on the Homes.com traffic ramp. That was a really impressive early start for you guys. First on the, on the roughly $53 million of sequential- Yay. step up in sales and marketing, how much of that was tied to Resi? We haven't indicated how much residential marketing spend, as you can appreciate, John. I think you see every sequential quarter we'll get more and more marketing coming in total as all of our marketplaces get into the more of the rental and high volume seasons in the second and third quarter. We'll just keep the discussion to overall company at this stage. Okay. I guess just broadly, you're expecting that sales and marketing to step up sequentially throughout the remainder of the year, even into four Q? Yeah. I think what you'll see is our pattern will step up in second quarter. We're gonna step up even more in third, as we get closer to our product launch in residential, then you'll see clearly we're preparing the market for that. I think what we'll see is the fourth quarter will be higher than most of our fourth quarters previously 'cause we have an additional platform that we're doing brand marketing for now this year versus prior years. You see a bit more of a spend that carries in later in the year than we've had before because of the addition of the new platform. Hopefully that helps. if you see anyone... Okay. Yeah. Very helpful. Sales, tell them we're spending all the money in Madrid. Will do. Andy, back, I guess big picture question for Resi. You know, as you look out the next couple quarters, what would you offer up as key milestones you'd like to see the team hit? Well, for the next... There's a lot going on. I mean, it is a very full plate of initiatives, and there's, you know, well over 1,000 people working on the initiative right now. I think that the traffic numbers remain a key metric that we're watching, obviously. As we mentioned, we plan to begin to monetize the platform at the very end of the year. You know, the first 1,000 customers on that platform are probably the most important customers, though you may one day have hundreds of thousands or millions. The first 1,000 are the most important. I would stay with. I would just stay with the simple traffic numbers. I believe that critical traffic numbers are what we talked about before, 25 million, which we've crossed, 50 million, which we're moving towards. Beyond that 50 million mark, you really have what you need to produce some compelling marketing solutions for your clients, and you can really begin to monetize. At I think the numbers correctly, you correctly observed that I would say that one of the biggest risk factors for Homes.com has just been reduced with these results today, if you're watching. A lot of sense. Thank you, Andy. Mm-hmm. Thank you, Mr. Campbell. The next question is from the line of Ashish Sabadra with RBC. You may proceed. Thanks for taking my question. I just wanted to drill down further on the CoStar Suite. I was wondering if you can quantify what% of the revenue really comes from the smaller mid-sized brokers, where you might potentially see any kind of headwinds. Just to follow up, Andy, on your comment around the prospects, owners, lenders, and corporations, which represents a $1.4 billion opportunity, I was wondering how much% of the revenue comes from those right now, and how should we think about that trajectory for the rest of the year but also over the next few years? Thanks. Let me take the first part of that question there, Ashish. When you look at our broker mix in CoStar, a little over 35% of our CoStar revenue is from the broker pool, and then about 25% of that group is representative of small, what we'd call the one or two broker set. That gives you know, 25% of 35%, so it's roughly 8% of that pool. It's pretty limited exposure for now in the small broker set. To be clear, they don't all go away. It's really, having watched this a few times, it's the folks who are 67 years old who decide to step out at the cycle point. It's a subset of the group. There's some, obviously some other constituencies. So the majority of our revenue today is the owners, lenders, and a smaller component is the corporate users. Obviously, we have government in there, we have vendors, we have a whole number of other sectors. I believe that while the brokerage side of our business continues to grow, I believe that those owner-lender, corporate user sectors are going to be by far the biggest growth driver. Coupled with international demand over the next 3 to 4 years. I think this is a trend that's been going on for 2 decades now. I think when we went public, 85%-90% of our revenue was brokers. While that revenue has continued to grow, it's now only 35%. As it continues to grow, I'd anticipate 5 years from now, it'll only be 15%. 10%-15% of our revenue, something like that. That's great. That's very helpful color. Thanks, Andy. Thank you, Mr. Sabadra. The next question is from the line of Mayank Tandon with Needham. You may proceed. Thank you. Good evening. Andy, of the 15 countries, or was it cities that you mentioned, the focal point in Europe, is that going to be an organic initiative, or do you think you could buy assets in these regions that could help accelerate the traction there to be able to penetrate that $30 billion opportunity? When should we expect meaningful revenue contribution from this initiatives? Yes. There definitely are acquisition opportunities in Europe. There are very few companies that in Europe that, or none, that do exactly what we do on the CoStar information side. They're more on the marketplace side, similar to LoopNet or to Homes.com. There's not a lot of Apartments.com players over there. On the CoStar side, we really stand alone. One of the key initiatives is to build the comprehensive information grid by doing the field research and proactive research. That is a 2-3-year process. You see significant meaningful monetization on the CoStar side, really 2-3 years out. On the LoopNet side or on the marketplace sides, I think it would be a little bit sooner, probably 18 months or so. We have our head down doing what, you know, we've done many times before, which is capturing the whole all the content, the core content. The wonderful thing is, we seem to be the only people in the world that like to go out and do something that hard and crazy, and then it becomes very valuable once we go and do it. We're pretty good at it. The wonderful thing is the technology has never been better than it is today, to do what we do when we build inventory. You know, we can use machine vision now to look at aerial photographs, compare them to the millions and millions of other properties and aerial photographs we've got. We can very precisely direct our field researchers, and make them very, very efficient as they move through these markets. It'll be a good venture, and I think there'll be some great returns for it. I remain convinced that, the market for, the demand for 10 markets is 20 times the demand for one market. That's very helpful. Thank you. Mm-hmm. Thank you. Thank you, Mr. Tandon. The next question is from the line of Jeff Silber with BMO. You may proceed. Thank you so much. This is, I guess a follow-up from the prior question. You've obviously got a sizable cash balance. It's great to see that you're generating more interest income off of there. When do you think you might put that cash balance to work, and where would that cash balance be working? I think I believe that our organic initiatives are not gonna exceed our or EBITDA generation or cash flow generation. I We don't see anything like that at this point. It's really acquisition opportunities. We're you know, we have been very patient. We believe that there's better value opportunities. As I listen to Scott describe $5.1 billion in cash, I believe it's a wonderful time to have a great balance sheet as other companies may run into some troubles. Both in Europe and the United States, we believe there are opportunities. We continue to have conversations. You probably have read in the media about a number of conversations we have had that were substantive. We did take a 4-week holiday, from after the latest round of media reports, but there's still a lot out there. I have meetings this week, but you won't know where. All right, fair enough. Thanks for the color. Mm-hmm. Thank you, Mr. Silber. The next question is from Heather Balsky with Bank of America. You may proceed. Hi, thank you. I appreciate you taking my question. I'd love to ask you about the residential piece. You talked about where you are on a traffic basis, you know, there's less risk going forward. I know you're not kind of telling us specifically your sort of spending plans for this year and beyond this year, but, you know, if things continue to progress at the rate they do and the pace they do, you know, how do you see things evolving at a high level? Can you just help us see your path between now and 2027? Thanks. Are you specifically talking about investments or combination of investments and traffic? I guess the investment side and how it's tied to your thoughts around how sales progress. Yeah. I think the remainder of this year, I believe, is fairly predictable. People have a good idea of what we're doing the remainder of this year. The wonderful thing is that we have pulled just a small percentage of the levers we have to grow traffic. Some of the things that I think are, I think there's more traffic generation opportunities ahead of us this year, that we than those that are behind us. Makes me feel pretty good about our ability to hit our second traffic goal as the year comes to a close or just slightly thereafter, which would be way ahead of schedule. I'm very excited about our simple monetization strategy at the tail end of this year. I think it's straightforward, I think it's compelling. I think we can spin up a sales operation to support it pretty quickly. My hope is that as we can begin to show proof of concept against that sales initiative the later part of the year going into 2024, we can do what we did with Apartments.com, where we are showing proof of concept and results and invest against that proof of concept and result into what is a huge market. It's too early to say, you know, what we're doing in 2024, 2025, 2026, and 2027 for investments. It'll be a balance between what we're showing in revenue results versus, you know, what we're willing to invest into the business. It's probably 60%, 70% of my time right now. I'm pleased with where it's going. It's a lot of work, but we have a great team, and feel pretty good about it. Obviously, we're the underdog as we were in the early days of Apartments.com. You had to be coming up with some unique ideas and different strategies. I think feel pretty good about that, what we've got going on. Appreciate the color. Thank you. Thank you, Ms. Balsky. The next question is from Ryan Tomasello with Stifel. Please proceed. Hi, everyone. Thanks for taking the question. Just two part one here. Clearly, a lot of confidence in the resiliency of the business. Just given the uncertainty that's out there around macro and CRE, it'd just be helpful to hear your thoughts around your willingness to pull expense levers under the scenario that the sales environment does weaken more than you're hoping. As a follow-up, on the Homes.com traffic trends, maybe you could elaborate a bit more, Andy, on what levers you've leaned on so far to drive that traffic growth in terms of, I guess, SEO, SEM, synergies with Apartments.com, and what remaining levers you have to pull that you just alluded to. Thanks. Yes. I don't think we want to go into too much detail on our traffic strategies right now, just for competitive reasons. I would point out that we have the greenest residential real estate portal around because our load time of the homepage is ranges from 4 milliseconds to something like 30, 24 milliseconds. That gives us a B.A. on Google Analytics for performance time, which means you consume less electricity and generate less carbon. We only generate 0.22 grams per 10,000 loads. Super efficient, high performance is a key piece that we've done. I hope that obfuscates what we're doing in strategy for traffic. I think we've talked about some of those traffic strategies and some of it's self-evident, like what we haven't yet done, which we're gonna be doing, and the things that we've done in apartments that are in the past successfully that we've talked about today that have not yet been done with homes that are self-evident. Yeah. There's more ahead than there is in the rearview mirror on the traffic performance. Congrats to Gerry Rodgers and his team for such a great performance, and that benefits your SEO growth. In our willingness to if the market continues to degrade significantly, sure, we're always, you know, we're always responsive to any need to sort of pull back on initiatives where we're not seeing a market perform because of severe economic conditions. You know, we are prepared to do cost containment efforts. Realistically, you know, in the very worst markets over the last 35 years, you know, we've rarely seen. I think the worst we ever saw was a 2%-3% decline when we were only selling CoStar brokers. We are so much more diverse now, and we have so many, what I believe are counter-cyclical drivers, whether it be lender or Ten-X or marketing for high asset value items that I think it's unlikely that we'd be in a situation where we have to really pull back because of the economy. I'm quite impressed by this particular down cycle and the potential. Yeah. Well, you notice, I mean, we looked very closely at the last disruptions that happened, the pandemic in 2020 and the Great Financial Crisis more than a decade ago. As you proceed through each of those, you noticed in the last down cycle that our revenue growth didn't slow at all, and we see nothing even as disruptive of that this time. You just look what's happening with apartments and LoopNet proving to over balance counter-cyclical that our revenue growth is not gonna slow at this balance in a down cycle, and we don't see that coming at all. We do see a lot of clear data underneath, as you might suspect, on what's going on. Our portfolio is much stronger as even 3 years ago, and I think we saw that in the results that we announced today. Thank you, Mr. Tomasello. There are no additional questions waiting at this time, I will turn the call over to Andy to wrap the call up. Wow, we finished 7 minutes early. Well, I'd like to thank everyone for joining us for our first quarter 23 earnings call. We look forward to speaking with you again on our second quarter call on July 25th, 2023 at 5:00 P.M. Eastern Standard Time. Thank you very much for participating today, and have a good evening or a good day if you're in Asia. Bye-bye. This concludes today's conference call. You may now disconnect.