CoStar Group has agreed to buy Vexcel Group, an aerial imagery company that photographs 320 major metros in more than 45 countries, for about $730 million in cash. The Arlington, Va.-based owner of CoStar, LoopNet, Apartments.com and Homes.com announced the deal Oct. 27, alongside third-quarter results that showed record revenue of $952 million and an Adjusted EBITDA figure that doubled from a year earlier.
The bet behind the purchase is that artificial intelligence can turn overhead photographs into property data at a scale and cost that CoStar’s field researchers cannot match. CoStar chief executive Andy Florance said the company believes it can “capture hundreds of data fields per property, across the approximately half a billion properties captured by Vexcel.”
What CoStar is buying in the Vexcel acquisition
According to CoStar’s announcement, Vexcel captures more than 60 million images a year across more than 45 countries and 320 major metros, with coverage of 99.6% of the U.S. population. It refreshes major U.S. metros up to three times a year and flies disaster zones within 24 hours of an event. CoStar describes the operation as one of the world’s largest survey-grade aerial imagery programs; in the release headline it goes further and calls it the largest.
Vexcel is not only a data vendor. It designs and manufactures the UltraCam line of aerial cameras and controls the aircraft and processing pipeline, which the company says lets it deliver resolution of 7.5 to 15 centimeters, roughly 16 times finer than typical satellite imagery. Its customers use the output for insurance underwriting, catastrophe response, infrastructure planning, mapping and AI applications, and CoStar says the imagery is licensed by the world’s largest technology companies.
Vexcel generated more than $140 million in revenue over the last 12 months, up more than 30% from the prior 12 months, on recurring multi-year contracts, with an Adjusted EBITDA margin of about 20%, according to CoStar. By our arithmetic, the $730 million price works out to a little more than five times trailing revenue.
Florance framed the deal as an extension of how CoStar built its commercial database. “Since 1989, CoStar Group has deployed thousands of researchers in vehicles driving tens of millions of miles across hundreds of cities on multiple continents to find, document and photograph real estate, tenants, and construction,” he said. Aerial photography and lidar, he added, can now produce “survey-grade measurements of land, houses, office buildings, industrial properties, retail properties, apartment buildings, construction sites, and other infrastructure,” and AI can extract features from those images to create what he called “a transformative, new, ultra-low-cost proprietary data source.”
CoStar also said it expects to accelerate Vexcel’s growth by putting its roughly 2,000 salespeople, many of whom already have relationships with Vexcel’s best prospects, behind the product. Vexcel will keep its brand, and chief executive Erik Jorgensen and his leadership team will continue to run it.
Terms and timing
CoStar’s Form 8-K says the price is subject to customary working-capital and post-closing adjustments, and that closing requires the expiration of the Hart-Scott-Rodino antitrust waiting period and certain foreign regulatory clearances. The deal does not need CoStar shareholder approval and has no financing condition. Either side can walk away if it has not closed by July 27, 2027, subject to extensions in certain circumstances.
CoStar expects to close in the first quarter of 2027, to fund the purchase from cash on hand and its revolving credit facility, and to see the deal add to Adjusted EPS in the first full year of ownership. Goldman Sachs and Latham & Watkins advised CoStar; William Blair and Snell & Wilmer advised Vexcel.
The purchase follows CoStar’s $800 million acquisition of Zonda, the homebuilding data provider, and comes as the big listing portals race to add AI to their products; Realtor.com, for one, recently put an agentic AI assistant in front of 192,000 agents.
Record quarter, higher guidance
The third-quarter earnings release showed revenue of $952 million, up 14% from $834 million a year earlier. Net income was $74 million, or 18 cents a diluted share, compared with a $31 million loss in the third quarter of 2025. Adjusted EBITDA was $229 million, double the prior-year $114 million and above the company’s own guidance range of $190 million to $210 million. Net new bookings were $37 million.
Most of the growth came from the residential segment, where revenue rose to $460 million from $373 million. The flagship CoStar information product brought in $344 million, up from $318 million, and LoopNet $89 million, up from $79 million.
Florance said efficiencies in the quarter brought “total anticipated cost savings this year to approximately $150 million versus our original guidance,” and that an ongoing expense review has identified “potential additional savings of at least $200 million” to be realized over the next 12 to 18 months, which he said keeps CoStar on track for its 2028 Adjusted EBITDA target of $1.25 billion.
CoStar raised its 2026 revenue guidance to $3.75 billion to $3.77 billion, about 16% growth at the midpoint, and lifted full-year Adjusted EBITDA guidance to $820 million to $840 million. For the fourth quarter it expects revenue of $976 million to $996 million.
The balance sheet shows how much of CoStar’s cash has already been spent. Cash and equivalents fell to $500 million at Sept. 30 from $1.63 billion at the end of 2025, after $789 million of acquisition spending and $668 million of stock repurchases in the first nine months of the year. Long-term debt stood at $994 million. With Vexcel to be paid partly from the revolver, CoStar’s next acquisitions are likely to depend more on borrowing than on cash it already holds; that is our inference from the filings, not company guidance.
For agents, brokers and investors who use CoStar’s products, the open question is how quickly AI-derived property fields from aerial imagery actually appear in the listings and analytics they pay for. Neither release gives a product timeline. More coverage of the sector is in our Technology & AI section.
