CoStar Group, Inc.

discuss the fourth quarter and full year 2023 results of CoStar Group. Before I turn the call over to Andy Florence, 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 first quarter and full year 2024, 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 any non-GAAP financial measure discussed on this call are shown in the detail in our press release issued today, along with the 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. And with that, I would like to turn the call over to our founder and CEO, Andy Florence.

Fantastic job, Cindy. Thank you. Good evening, everyone, and thank you for joining us for CoStar Group's fourth quarter and year-end 2023 earnings call. Total revenue for the full year of 23 was $2.46 billion, a 13% increase over the full year of 22, coming in above the high end of our guidance range and above consensus estimates. Revenue for the fourth quarter of 23 was $640 million or 12% growth year over year. This is our 13th year in a row of double digit revenue growth. We turned in another very strong year in sales in 23, achieving our second highest net new bookings level ever of $286 million. This performance in the face of higher interest rates and demand shocks that kept property markets distressed in 23 demonstrates the resilience of our business. Our full year 23 adjusted EBITDA was $492 million and $130 million for the fourth quarter, ahead of both the high end of our guidance range and consensus estimates. I'm proud to say that we achieved a major profit milestone in 2023 in our commercial real estate information and marketplace businesses as we deliver adjusted EBITDA margins of 40% for the full year. For the past three years, thousands of our team members have worked with professionalism and committed focus to build the new Homes.com, the premier marketplace for buying, selling, and renting homes in the United States. We've conducted dozens of focus groups across the country, listening to hundreds of agents, homebuyers, and home sellers, learning why they were so dissatisfied with the legacy offerings and what they hope for in a better residential portal. We heard loud and clear that brokers, agents, sellers, buyers, and investors all dislike real estate portals that use agents listings as bait to draw in homebuyers and then sell them off to other agents as leads with exorbitant commission splits. We learned that home buyers buy a home in a community, not in isolation, so they want quality, in-depth information on neighborhood schools, parks, restaurants, and local culture. Our product teams have designed what we believe is clearly the best residential real estate site in the world. The site is clean, powerful, intuitive, appealing, and spam-free. Our software developers rose to the challenge and built a lightning-fast, reliable platform that met the design specifications perfectly. Good job, Jerry and Zach and crew. Our content team comprised of hundreds of photographers, drone pilots, writers, voiceover talent, musicians, geographers, and video editors captured the essence of tens of thousands of U.S. neighborhoods, schools, and parks. Our team drove 2.6 million miles, captured 1.5 million images, shot 3.8 million video clips, and conducted over 350,000 drone flights. This investment creates an experience that consumers love, strengthens our SEO traffic position, and provides a significant advantage over competitive sites. Our efforts to grow traffic on Homes.com in 2023 were a big success. Homes.com was the fastest growing real estate website at the end of 23 with over 600% year-over-year growth in the fourth quarter according to Google Analytics. Our residential network traffic in the fourth quarter totaled 95 million average monthly unique visitors, growing 94% year-over-year. We were easily in second place in traffic by this measure, well ahead of the 66 million average monthly unique visitors that Realtor.com reported two weeks ago. Our largest competitors, Realtor and Zillow, reported either flat or declining traffic in the fourth quarter of 23. I believe we will be able to report even stronger traffic numbers in the near future. After building the site and traffic for over two years, last week we launched a massive marketing campaign for Homes.com with four commercials during the Super Bowl, an event that was watched by an estimated 123 million viewers. We ran a clever Apartments.com commercial in the first quarter with Invading Aliens to set Jeff Goldblum up for a memorable cameo in the first Homes.com ad in the second quarter connecting the two brands. In the spots, Dan Levy plays the nephew inheriting his uncle's business, Homes.com, and he sets out to reinvent the company and make it better than ever. He is supported by his hesitant sidekick played by SNL's Heidi Garner. The spots draw attention to the value of our neighborhood and school data that we offer home shoppers. The Super Bowl was only the kickoff. In the week following the Super Bowl, we generated an estimated 560 million impressions across prime broadcast TV, syndicated TV, cable TV, morning shows, late night shows, major streaming audio and video platforms, and of course on Google in various forms. During the course of the year, we will be in the Olympics, the Oscars, the Emmys, March Madness, the US Open, the Stanley Cup Playoffs, Major League Baseball, and much more. We believe that we will generate approximately 80 billion impressions for homes.com and reach 90% of US households with our message in 2024. We believe that no other competitor is investing close to what we're investing in this effort. We believe we can grow share. We believe that we have a better product and can significantly shift share and create a very attractive ROI for our investors. While we have excellent traffic numbers, we do not yet have the unaided awareness we need to sustain the top traffic position and to draw the volume of advertisers we seek. As we did with Apartments.com, our plan is to grow unaided awareness from the low single digits to more than 50%. That process will take time. but we believe that it will drive brand awareness, SEO, SEM efficiency, traffic, audience, customer demand, and revenue. On Monday, February 12th, the day after the Super Bowl, we were ready to begin monetizing Homes.com, selling memberships to agents a quarter earlier than we had previously communicated to you. As we did when we launched the new LoopNet and the new Apartments.com, we deployed the entire CoStar Group sales force to sell Homes.com. Our goal is to catapult our growth forward and quickly capitalize on the momentum and exposure generated from our marketing campaign. Our 1,000 plus person sales force gives us instant national reach with experienced salespeople that live in many of the very same neighborhoods as the 1.5 million residential property agents that we intend to reach. We trained the full sales team in January and rolled out very attractive incentive structures that reward our sellers to sell both homes and their primary brands, like CoStar or Apartments along with Homes. The more they sell of both brands combined, the more money they make. In addition to leveraging the strength of our entire CoStar Group sales team, we are rapidly building a sales force dedicated to selling only Homes.com. We have recruited a vice president, sales managers, and 100 sellers to date. and intend to have over 300 account sales representatives in place by the end of the year. The response to our sales effort is phenomenal. From a standing start, we sold almost 5.2 million. It was 5 million half an hour ago. 5.2 million annualized subscription revenue in just a little over a week. From a modest start on Monday, our sales climbed each day, and by Friday, we were selling $1.1 million in memberships in a single day. We've sold more than 827 memberships so far, with approximately 90% of the agents selecting 12-month memberships, with the rest choosing a six-month subscription. We've seen agents with larger portfolios signing up at price points in the thousands of dollars a month, so far topping out at $7,400 a month. We have proposals out at much higher price points. We also have agents with just a listing or so signing up at price points of only $100 to $200 a month. It doesn't matter if you're an agent with a large portfolio or small portfolio. Either way, we're charging a small fraction of the Xerious ridiculously high 40% of commissions being charged by Zillow and Realtor.com to agents. We have only demoed 0.02% of the agents out there at this point. If we maintain this pace, we could sell around 200 million in annual reoccurring revenue in our first 12 months of selling. The great news is that agents are definitely willing to spend for advertising exposure and they absolutely love the homes.com, your listing, your lead business model. Our direct field sales team, telephone sales teams, and e-commerce sales channels are all producing results. We are initially focused on approximately 500,000 of the 1.5 million agents in the country. The annual revenue potential of this initial pool of agents for a basichomes.com membership is over 2.5 billion. Knowing that apartments.com basic silver ads comprise around 25% of all apartments.com listings, If the same ratio were to apply to homes.com, then the potential opportunity could be as high as $10 billion. Overall, I'm very proud of what the team has worked so hard to accomplish with homes.com in only three years and believe it will be the most successful product launch in CoStar Group history. This coming year also marks a turning point as we've reached the peak year of our residential investment. With sales and revenue growing in the months ahead, we expect overall company profit levels to increase each quarter throughout the year and for the foreseeable future. In December, we successfully closed our acquisition of On The Market in the United Kingdom for £100 million. We believe that the time of the acquisition of On The Market was one of the top three residential portals in the UK. 100 million pounds is 2% of the current leading portal Rightmove's 4.4 billion pound market cap. Rightmove currently has significantly more traffic than on the market, so a top priority for us is to grow the appeal of the site for homebuyers and sellers and grow traffic. Just one month in, we're making huge progress, increasing January 2024 site traffic on the market by 81% year-over-year, according to Google Analytics, within waste time. We believe that we are now the fastest-growing residential portal in the UK. As our traffic has grown, our leads have also grown 81% since December of 2023. Rightmove announced at their recent Investor Day that they plan to grow revenue per agent by 42% to over £2,000 per agent per month over the next five years. That is 10 times what on the market charges agents today. Rightmove is also committed to maintaining at least 70% profit margin levels through 2028, leaving them little room for investing in product and technology. You simply cannot make this stuff up, but you have to love it. In sharp contrast, we plan to continue CoStar's longstanding strategy of investing and partnering with agents in the industry to generate and attract high intent leads at a fraction of the cost of other UK portals while still achieving an attractive margin. Agents are telling us that they're in search of an alternative to Rightmove's unfriendly agent listing fees and are supportive of on the market. Since acquisition, we have added over 1,000 agent advertisers and 57,000 listings to the site. Again, in a matter of two months. Our long-term intention is to create the number one property portal in the UK by combining CoStar's marketing and traffic generation expertise, the market-leading technology we've developed in homes.com, CoStar's research and content generation capabilities, and the strength of our established commercial real estate platform in the UK. The European residential market opportunity is estimated to be $17 billion. and we intend to build and expand our share of the residential opportunity in Europe, beginning with on the market. Apartments.com had a phenomenal year. Revenue for the year was 914 million, or 23% growth over 22. This is almost 170 million of incremental annual revenue, the largest contribution ever for any of our brands. As of January this year, Apartments.com is now not only the largest business by revenue at CoStar, but also officially our first billion dollar revenue run rate business. But here comes CoStar right behind it. And then homes. The sales team delivered exceptional results at Apartments.com in 23 with annualized net new bookings growing 34% over 22. We now have almost 71,000 communities advertising their availability on apartments.com, which is 11% above the fourth quarter of 22 and almost twice that of our nearest competitor. Our highly productive sales team conducted over 623,000 quality meetings in 23, which was 37% higher than in 2022 and a new record. Our customers love our sales team, rewarding them with a 94% net promoter score rating for the full year of 2023. We continue to expand our mid-market sales effort by growing our sales team and developing targeted product offerings that suit the needs of mid-sized communities. Net productivity for our sales team increased by 14% in 2023 as compared to 2022, which resulted in a 44% growth in properties under 50 units advertising on apartments.com. The opportunity in the small property sector is massive at almost 7 billion, and our penetration in this sector is still below 5%. Our award-winning marketing campaign featuring the wonderful and very funny Jeff Goldblum as Brad Bellflower, inventor of the apartment internet, entertained audiences and delivered over 12 billion media impressions and almost 1 billion visits to our websites during the year. We jump-started our 2024 media campaign with a Super Bowl ad. This is year 10 of our brand building marketing campaign since we launched Apartments.com back in 2015. This consistent long-term brand marketing strategy continues to prove successful as we finish the year with 52% unaided brand awareness with renters in the fourth quarter, six percentage points above our closest competitor. Based on recent study by Market Research for Market Connections, industry decision makers representing 15,000 communities named Apartments.com as the most widely used advertising solution at 74%. The research also found that Apartments.com was the most well-known advertising solution, beating our closest competitor by 25%. The apartments.com brand is stronger than it's ever been, delivering almost a billion visits to our websites and 43 million average monthly unique visitors during 2023, according to Google Analytics. Our customers care about the number of potential renters utilizing our site every month to find a place to live, making unique visitors a key metric. For the past eight quarters in a row, apartments.com held the number one position in terms of monthly average unique visitors when comparing to our traffic to Zillow's publicly disclosed average monthly unique visitors. Overall economic conditions are expected to remain favorable for rental property advertising. Vacancy rates increased in 2023 for three to five star properties by 160 basis points to 9.1% and are expected to increase in 2024 as new unit deliveries are expected to remain high in 2024 at approximately 470,000 units. We expect to see apartments.com generate strong double-digit revenue growth in 2024, somewhere in the high teens or more, which is balanced to some degree by the level of homes.com sales effort this top performing advertising juggernaut delivers in 2024. CoStar delivered another strong quarter with revenues of $925 million and 11% year-over-year growth rate. Fourth quarter revenue grew 8% year over year to $238 million. We have never seen this level of positive revenue growth for CoStar while we're at the bottom of a severe property market downturn. The strength of CoStar continues to be our ability to expand the information content and analytic capabilities in the product to diversify into bigger and broader customer sets, like owners, lenders, and corporate tenants. In 23, we sold twice as much to the owner, lender, and corporate tenant sectors than we did to brokers. Net sales in the fourth quarter to owner, lender, and tenant customers grew almost 30% compared to the third quarter of this year. The CoStar lender product had an exceptional year in 23, nearly doubling our customer base and delivering over five times the revenue that we realized in 22. We now have over 1000 active users for a lender product our opportunity pipeline is large, with over 300 institutions progressing through our sales process. Our competitive data advantage has helped us when virtually every deal versus the main competitors in this space, including winning seven of the largest theory lenders in the industry. Looking ahead, there is significant opportunity to expand the CoStar lender addressable market beyond our initial focus on depository institutions. As regional banks and credit unions tighten up their credit lending requirements or commercial lending requirements, private lenders are stepping in to fill the void. We believe the total addressable market for our expanded target customer set is over 600 million. We are currently serving less than 15% of this opportunity, and have plans to increase our sales and product teams to accelerate our growth next year. We released our hospitality benchmarking product in the CoStar platform in 23 and are rapidly migrating our SDR customer base into the CoStar environment. Over 600 customers are now using the benchmark product in CoStar, with the remaining customers to be migrated in the first half of 24. More than 18,000 users are now in CoStar managing their hotel's performance and optimizing their revenue through the reimagined tools and additional analytic capabilities. As a result of the movement of STR benchmarking at CoStar, revenues from our hospitality benchmark subscriptions will now be reported as part of CoStar, similar to our integrated approach of our lender products for financial institutions being in CoStar. The transition of STR benchmarking to CoStar in 24 is a major milestone for our roadmap to build the full suite of STR product capabilities in CoStar. We plan to incorporate forward booking information, complete P&L benchmarking, and international market performance this year and the next. STR overall had an incredible year. 23 revenue grew 13% over last year. delivering the highest annual ever results since we bought STR in 19. The team had a record sales quarter to end the year, growing 54% over the fourth quarter of last year. Subscription revenue grew 17% in 23 over the prior year, and now makes up 81% of the overall revenue, the highest percentage since the acquisition. SDR's quarterly renewal rate is now in a very impressive 98%. With the full capability of CoStar and SDR combined, we expect to unlock increased value for our customers and grow strong double-digit revenue towards what we believe is a 300 million hospitality market opportunity. Overall, we remain very confident in the strength and value of CoStar's platform and our growth performance in the downturn. Renewal rates for CoStar remain rock solid at 92%, and we're seeing early indications of increased leasing and sales activity as we move into the first quarter of 2024. Although it's too early to call a recovery in the property markets, we expect solid mid-single-digit revenue growth from CoStar in 2024. LubeNet revenue was $265 million in 23, up 15% year-over-year, and at the high end of our guidance range. Signature ad listings were up 11% in the fourth quarter, delivering more traffic and leads to our customers. International revenue in the fourth quarter was up 33%, and net new bookings were up 186% over the fourth quarter of 22. LoopNet continues to be the number one listing site for commercial properties. Average monthly unique visitors to the global network in the fourth quarter were up 11% year over year and was seven times the traffic of the next largest competitor. In the UK, LoopNet is now the number one dedicated commercial property marketplace by traffic after launching only a little over a year ago. We continue to expand internationally given our success to date and the size of the opportunity. We plan to launch LoopNet in France and Spain in 2024. 2023 was a year of growth for the LoopNet sales team. At the end of 22, only 40% of the sales were managed by LoopNet dedicated sales representatives. And we've now effectively transitioned to 80% of those accounts from CoStar reps to LoopNet reps. The LoopNet sales team is focused on ramping up activity, face-to-face meetings, and MPS scores following the success formula of apartments.com. As a result, we expect to deliver increased sales productivity and bookings as we move through 2024. 10X continues to demonstrate the value of our digital sales platform for our commercial properties. In the year when sales transactions were down 49%, 10X brought $4.5 billion in assets to the platform, which was a modest decline of 9% relative to the market's steeper decline. We delivered a 52% trade rate in 23, nearly double the offline trade rate, but below the rates we achieved in 22. Overall, 10X revenue finished the year around 20% below prior year levels. Despite this decline, we increased our share of property sales in the 1 to 10 million asset category during the year, moving more transactions from offline to online. The market outlook for the coming year remains uncertain. Although interest rates have stabilized near term, bid-ask spreads and debt constraints remain a challenge. Regardless of these uncertainties, in the first 45 days of 2024, Our trade rate and number of bidders per asset have increased from the fourth quarter of 23 levels. There are still billions of dollars of transactions occurring each year in the 1 to 10 billion asset category, which we continue to pursue as part of what we believe is a 3 billion long-term market opportunity. The real estate capital markets in the fourth quarter continue to be impacted by higher borrowing costs, tight lending standards, and deteriorating real estate fundamentals. In 23, transaction volumes were down 49%, and price declines ranged from 10% to 35% across all sectors. Banks continue to slow their loan growth as property fundamentals decline and delinquencies rise. With interest rates expected to decline later this year, current expectations are for sales volumes to increase compared to last year. We saw some early indications in January with sales volumes rising 6.4%. The office sector continues to be the most challenged with 58 million square feet of negative absorption in 23. Absorption since the pandemic now sits at negative 178 million square feet. Office attendance is 60% of what it was before 2020, though that understates demand since hybrid work requires higher peak use. The market sits at a record high 13.5% vacancy rate. A silver lining is the decline in construction starts, which we predict will eventually result in a shortage of premium office space. Since our 15-year lease at our Washington, D.C. headquarters location is set to expire in 2025, we assessed more than 25 viable sites in the greater Washington, D.C. metro area. We ultimately decided to purchase a five-star trophy LEED Platinum office building located at 1201 Wilson Boulevard in Arlington, Virginia. We were able to purchase the building and the land lease for a significant discount to both recent valuations and current replacement cost. We also received nearly 7 million in both tax and economic incentives. While past performance does not ensure future performance, you might recall that back in 2010 during the great financial crisis, we acquired our 1331 L Street location for 42 million. a then significant discount to replacement cost, and sold it within two years in a sale leaseback for $101 million, more than twice what we bought it for. We are betting that the office market is at a NADAR again. We will likely execute a sales leaseback on 1201 Wilson Boulevard at some point in the future. The industrial sector is also seeing a historic wave of new construction push vacancies up from all-time lows, but at 5.7%, industrial vacancies are still at half their peak levels. Industrial demand has remained positive, though, and the rise in vacancies should be mitigated by a pullback in construction starts in the second half of 23. The retail sector continued to be the best performing in the fourth quarter with both positive absorption and limited new construction. The result was vacancy rates dropping to 4% in all-time low. Conditions should remain healthy for retail with under-construction at near all-time level lows. The U.S. hotel sector ended the year with REF PAR growth of 4.9%, outpacing inflation, and being driven by ADR growth of 4.3% and occupancy growth of 0.6%. Robust group demand and corporate transient demand were the primary contributors to growth. Revpar is expected to continue to outpace inflation in 24 with 4.1% growth projected. In the U.S. residential sector, mortgage rates have come down from 7.8% to 6.6%, but rates are still high enough to prevent homeowners from selling, creating low inventory of homes for sale and low levels of homes being sold. But if interest rates continue to drop, affordability will improve, and even a drop to 6% would mean home ownership would become affordable for an additional 37 million Americans. In the context of a distressed commercial real estate market, CoStar turned in an outstanding performance in 23, growing revenue 13% with record levels of profitability in our CRE business. It is clear that CoStar Group's diversified subscription business is highly resilient in a distressed property cycle. We believe that we will improve profits and margins again in 24 to 1.1 billion adjusted EBITDA with 42% margins. Our entire team has worked extraordinarily hard in building the Homes.com platform and business. We believe that we just launched CoStar Group's next transformative billion dollar business. In the conversations we were having with brokers, leaders, and agents, they tell us they're 100% behind our you're listing your lead business model, but gets better for brokers, agents, homebuyers, and home sellers. I am thrilled to see that support with 5.2 million in annualized subscription sales in just the first six business days of selling homes.com. The first half of 24 is the peak investment for homes.com. We believe profits and margins will start showing significant growth in the second half of 24. After my brief remarks, I'm going to turn the call over to our Chief Financial Officer, Scott Wheeler. Are you still there, Scott?

Still here, ready to go. Thank you for those brief remarks. Okay, so clearly 2023 was a very strong year for the company, but that sure feels like a long time ago, doesn't it? These last few weeks have really been like turning a page when you get into the launch of homes.com, the advertising brand campaign, the selling efforts. I think 2024 is going to be a great year, I can already tell. But first, let's wrap up on 2023. The full-year revenue growth was an impressive 13% versus prior year, which was ahead of our guidance and forecast. What I found interesting was that 2023 was the 13th consecutive year of double-digit growth, and we grew 13%. Did you know that? And last year, when our 12th consecutive year of double-digit revenue growth, we grew 12%. Huh, I wonder what that means this year. We'll see. Let's not get ahead of ourselves, but we actually turned in a great revenue performance in 2023. Profit results also came in above expectations with full-year adjusted EBITDA at 492 million and 20% margin, exceeding the high end of our guidance range. But I think most impressive is that you can still see our core costar business delivering 40% profit margins and a record high 45% in the fourth quarter before you consider the investments we're making moving into the residential sector. I think it's important we keep an eye on the underlying strength of this business portfolio as we exit the investment phase of homes.com particularly and we'll expect profitability to increase as Andy mentioned once again as we move through 2024. So looking at our revenue by our different businesses, Apartments.com grew 23% in the fourth quarter and the full year in line with our expectations. Apartments.com added twice the amount of revenue in 23 than its nearest competitor and increased revenue in the fourth quarter of 23 sequentially over the third quarter, which demonstrates both the strength of our product platform and our 97% subscription model in Apartments.com. Our competitors are still in the game of chasing transaction revenue, which is why their revenue cycles up in the middle of the year and then drops back in the fourth quarter. These transactions sure feel good during an upswing in market demand, but will leave you weak and unable to invest in a cyclical downturn. We expect departments.com revenue growth rates somewhere in the 17 to 18% range for the full year of 2024, and we're estimating 20% revenue growth for the first quarter. We expect our renewal pricing levels to moderate this coming year as inflation in the economy has come down. Also, we continue to grow aggressively in the smaller property space, which carries lower price points relative to institutional scale communities. We're going to see increased levels of productivity in 2024 for our large and more experienced Salesforce and apartments. Now the question is, will this increased output benefit apartments or homes.com? So far, this sales team is proving very effective at selling both. CoStar revenue grew 8% in the fourth quarter and 11% for the full year of 2023 at the top end of our full year guidance range. As Andy mentioned, in 2024, we will report STR benchmarking revenue in CoStar as the STR product is now fully integrated into the CoStar platform and customer migrations will be complete this year. Including our benchmarking revenue, we expect full year and first quarter CoStar revenue growth in the range of 11% to 12%. So in 2024, CoStar will become our second brand business, producing over $1 billion in revenue. On a pro forma basis, adjusting for the STR revenue shift, we expect CoStar revenue growth of between 7% to 8%, consistent with what we indicated in our third quarter earnings call back in October. LoopNet revenue grew 12% in the fourth quarter, exceeding our 11% guidance. Revenue for the full year was $265 million, or a 15% increase over prior year, at the top end of our guidance range of 14% to 15%. We expect to see first quarter LoopNet revenue growth in the range of 8% to 9%, as the sales results for LoopNet in the fourth quarter were lower than earlier in the year, following the full account transitions from CoStar to LoopNet. We expect our LoopNet sales team to make meaningful contributions to selling both LoopNet and Homes.com in 2024. So accordingly, our LoopNet 2024 forecast range assumes revenue growth in the mid-single-digit range. Revenue from information services grew 9% for the full year as expected. As a reminder, information services includes STR, Real Estate Manager, our original lender products, and a few smaller information-related products, Thomas Daly and Business IMO in Europe. In 2024, a big piece of this revenue, the STR benchmarking, will move up into CoStar. Also, as we continue to grow our integrated CoStar lender product, more and more of the original lender products residing in Information Services are also moving into CoStar. This is good news, of course, as we are executing on our strategy to integrate all of the Information Services products inside the CoStar platform. When the dust settles on all this, we expect Information Services revenue for 2024 in the range of approximately $130 million to $135 million, with $33 million of revenue in the first quarter. Our real estate manager business is now the largest single component of information services, which we expect to grow in the mid to high single digits in 2024 for real estate manager. Other marketplace revenue was $134 million for the full year of 2023, ahead of our expectations for the fourth quarter, with modestly higher transaction revenues from 10x. Our subscription marketplace businesses, lands and business for sale, contributed solid double-digit growth as they do year in and year out. We expect similar outcomes in 2024 with revenue relatively flat to the 2023 overall and first quarter revenue a little below $30 million. Our 2024 revenue outlook includes double-digit revenue growth in the subscription marketplace businesses and a rather conservative view, I must say, of 10x transaction revenue. We've not built any transaction market recovery assumption into 2024, So if a recovery does materialize in the months ahead, then we should benefit. Residential revenue, I saved the best for last. I can finally talk about forward growth expectations for homes.com. First, to round off on 2023, our residential revenue was $10 million in the fourth quarter and $44 million for the full year of 2023, in line with our expectations for the legacy HomeSnap revenue and inclusive of a small amount of revenue from the on-the-market acquisitions. Our 2024 residential revenue outlook includes three components. These are homes.com on the market and the legacy residential products formerly known as HomeSnap. Homes.com is generating revenue. I've been waiting three years to say that. I'm just going to have to say it again. Homes.com is generating revenue. I think it definitely felt better the second time. So it was exciting to see our first Homes.com membership product putting points on the sales board this year. We have every brand sales team in every city across the country competing to sell Homes.com and this is certainly going to be fun to watch. I think the CoStar team is a little bit salty still from having apartments reach $1 billion in revenue first and they are currently leading the Homes.com top selling contest ahead of apartments. What's fun is that every sales team, no matter how big or small, has a shot at victory. Pound for pound, I'm seeing Lanz.com's sales team is ahead of everyone in terms of net sales per person of Homes.com, and their team is one-tenth the size of Apartments. Momentum is certainly building, and all nine of our brand sales teams have contributed net new sales for Homes.com. Of course, it's very early in the year, and with every salesperson in CoStar incentivized to sell both their core brand products as well as Homes.com, It's a bit challenging, as you might imagine, to pin down a sales and revenue outlook by brand this year. Will we sell more homes.com, or will we sell more of our commercial brand products? It's really too early to tell, but I believe we are going to sell a whole lot of both. It's a great problem to have, and regardless of the specific mix of products we sell, we believe that 2024 will be the best net sales year in the company's history by a wide margin. Well, let's look at what happened the last time we took this approach, which was back in February 2015 when we appointed the entire sales force at the launch of Apartments.com. As we came into 2015, our total net sales bookings for the company were growing around 15% year over year. In 2015, with everyone selling our new Apartments.com ad products in addition to their core branded products, our net new bookings increased almost 80% with sales of all brands growing year over year. Now, to parrot Mr. Florence a few moments ago, we all know that past performance is not indicative of future results. However, there are a number of factors working in our favor with Homes.com. We know the size of the residential market opportunity is multiple times bigger than multifamily. We just launched the biggest marketing campaign in real estate history, four times the size of our Apartments.com initial marketing campaign. And nobody else in the industry is competing with a your listing, your lead business model that doesn't try to take agent commissions, but lets them buy advertising exposure to sell their listings. I think these are all very positive relative to our Apartments.com experience back in 2015. So taking our best educated guess, our 2024 forecast assumes revenue contribution from Homes.com memberships in the $50 to $60 million range in 2024, starting from zero in the first quarter and exiting the year with an approximate $100 million quarterly run rate. Now you might think my forecast looks a bit wimpy as you keep hearing Andy talk about updating our sales efforts every minute over here, but one step at a time, we're just getting started. We expect on the market our new UK residential business to deliver approximately $40 million in revenue in 2024. First quarter revenue is expected to be in the $10 million range. The results of On the Market were insignificant to our overall financial results in 2023 as the acquisition closed in the middle of December. We expect legacy residential products to continue to decline in 2024 as we sell customers Homes.com memberships. We expect full-year 2024 revenue of around $20 million from the legacy products. So, combining all the components of our residential business, our forecast assumes revenue in the range of $110 to $120 million in 2024, starting the year with a little over $15 million in the first quarter and growing to over $40 million in the fourth quarter of 2024. Year-over-year total revenue growth is expected to be 150% and year-over-year organic revenue growth in residential is around 70% in 2024. So to wrap up on 2023 net income was $96 million for the fourth quarter and 375 million for all of 2023, an increase of around $5 million compared to 2022. It's nice to see net income improve while we were in a major investment cycle. And that's thanks to our net interest income, which was an impressive $220 million in 2023. We earned roughly 5% on around a $4.2 billion net cash balance for the year. Let's talk about a few of our performance metrics, first with our Salesforce, which totaled approximately 1,160 people at the end of the year, with modest increases in 2023 focused on our marketplace businesses of Apartments.com and LoopNet. Salesforce expansion in 2024 will be primarily concentrated in our Homes.com residential business. Contract renewal rates were 90% in the fourth quarter of 2023, and these remain strong at 95% for customers who have been subscribers for five years or longer. Subscription revenue on annual contracts was 81% for the fourth quarter of 2022, up from 80% in the prior year. Looking ahead to 2024, we expect full-year revenue to range from $2.75 to $2.77 billion, implying an annual growth rate of between 12% and 13%. First quarter 2024 revenue is expected to range from $645 to $650 million, representing revenue growth of 11% year over year at the midpoint. 2024 adjusted EBITDA is expected in the range of $170 to $190 million, reflecting an adjusted EBITDA margin rate of around 7% for the entire year. First quarter 2024 adjusted EBITDA is expected to dip slightly into negative territory as we launch our brand marketing campaign, ahead of the revenue growth in Homes.com. We expect to see positive margins return after the first quarter and grow for the remainder of the year with adjusted EBITDA margins in the 12 to 13% range in the second half of 2024 and exiting much higher than that. Our financial strategy for 2024 is to once again drive operating leverage and profit generation in our commercial businesses while we fund our residential marketplace strategy. We expect to increase profit margins in our commercial portfolio which should be generating approximately $1.1 billion of profit before investments in homes.com and on the market in 2024. We're off to a strong start with homes.com sales this year with plans to increase our total residential investment levels in 2024 to support the brand launch and build our sales capabilities. 2024 will be the peak net investment year for residential, which includes our full marketing campaign on the market in the UK, and our teams reaching full strength in content, technology, and sales. Our level of capital expenditures is expected to increase in 2024 from around $150 million in 2023 to around $800 million in 2024 as we enter the big construction years for our Richmond campus and at our new headquarters building in Arlington, Virginia. The operating capital apart from the building projects, is expected in the $40 to $45 million range in 2024, which is consistent with the same spending levels in 2023. Our forecast for net interest income is around $200 million for 2024, which takes into account our increased capital spend and the possible interest rate reductions in the years ahead. In summary, I'm very proud of the exceptional results we delivered in 2023 during a year complicated by high interest rates, inflation, and continued economic uncertainties. We remain focused on our strategic investment in residential markets while producing record profit levels in our established commercial businesses. With monetization of homes.com this year, we're adding another strong double digit growth revenue stream to our brand portfolio and moving past the peak of the residential investment cycle and onto the next phase of profit growth and profitability improvement for the company. Overall, we're making great progress towards our long-term revenue and profit objectives and remain confident in our ability to grow homes.com to become yet another high margin billion dollar revenue business for CoStar. Having said all that, I think it's time to turn the call back over to our operator for the question and answer session.