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C r u z.
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Bruce, b r u c e?
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S and P Global.
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Global. Global? Yes. Okay.
To the CoStar First Quarter Financial Results Call. At this time, all lines are in a listen only mode. And later, we will conduct a question and answer session with instructions being given at that time. And as a reminder, today's call is being recorded. I would now like to turn the call over to our host, Rich Simonelli.
Please go ahead, sir.
Thank you very much, operator, and welcome to Coast Guard Group's Q1 2019 conference call.
Before I
turn the call over to Andy Florence, our CEO and Founder and Scott Wheeler, our CFO, I'd like to share some very interesting and important items that can actually make your day. Certain portions of our discussion today may contain forward looking statements, which involve many risks and uncertainties that 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 April 23, 2019 press release, on our Q1 earnings and our company outlook and in our CoStar filings with the SEC, including our most recent annual report on Form 10 ks and our subsequent Q reports on Form 10 Qs under the heading FASTERS Risk Factors. All forward looking statements are based on information available to Kosar on the date of this call and 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 to the non GAAP financial measures discussed on this call, including non GAAP net income, EBITDA, adjusted EBITDA and forward looking non GAAP guidance are shown in detail in our press release issued today, along with definitions for those terms, long definitions.
The press release is available on our website located at costargroup.com. As a reminder, today's conference call is being broadcast live and in color on our new and vastly improved Investor Relations website. Please refer to our press release today to how to access this call going forward. Remember, one question, so look at a good one. And I'll now turn the call over to Andy.
Thank you, Rich. Well, let's move to this call quickly so that we can all get to those long definitions of key financial terms in our press release. Thank you for joining us for CoStar Group's Q1 2019 earnings call. It's just 8 weeks ago that we reported superb year end results and we're pleased to be back so soon reporting another strong quarter with solid revenue growth and even stronger profitability growth. In the Q1 2019, CoStar Group total revenue was $328,000,000 up 20% year over year.
We generated $55,000,000 more revenue in the past quarter than we did in the same quarter 1 year ago. Apartments.com led the way with 30% year over year revenue growth. LoopNet's revenue increased 17% year over year. CoStar Suite revenue grew 13%, which was at the upper end of our guidance. Our rural lands marketplaces grew 21% and our business for snow marketplace revenues grew 12% year over year.
Our Real Estate Manager continues to be a tour de force and major contributor with 95% year over year revenue growth. With high incremental margin on each dollar sold, our strong revenue growth continues to translate into even higher earnings growth. In each of the last two quarters, we've generated the highest quarterly net income in our history. Net income increased to $85,000,000 in the first quarter, up 63% from $52,000,000 in the Q1 of 2018. We generated $113,000,000 of EBITDA and $125,000,000 of adjusted EBITDA in the quarter.
When annualized, that's consistent with our expectations of generating $500,000,000 of adjusted EBITDA in 2019. Our $55,000,000 year over year increase revenue in the quarter generated a $43,000,000 year over year increase of EBITDA, effectively $0.78 of every incremental dollar sold translated into EBITDA. In the Q1 2019, adjusted EBITDA margin was 38%, an increase of 700 basis points compared to the Q1 of 2018. Company wide net new bookings grew 36% year over year to $48,000,000 in the Q1 of 2019. For the 2nd consecutive quarter, Apartments dotcom generated our best bookings quarter ever as our sales force continues its strong momentum with a 40% increase in net new bookings year over year.
Last year, we communicated that our entire apartments sales force was investing a significant amount of time and effort into the important job of converting the newly acquired ForRent contracts into apartments network contracts. That investment yielded great results, but also meant that they had less time available to generate net new sales last year. Now that we have completed the full rank conversion and have more time, you can clearly see the department's sales force's productivity is surging. These results are more impressive because of the quality of customer service the Apartments sales force is delivering while also delivering great sales numbers. During the Q1 of 2019, the Apartment Stock Company sales force conducted 80,000 sales meetings and earned an audited net promoter recommendation score of 9.8 out of 10.
That is clearly
8 out of 10. That is clearly outstanding customer satisfaction.
LoopNet net bookings were up 27% in the Q1 of 2019 over Q1 of 2018. In the Q1 of 2018, we achieved record CoStar sales results when thousands of stranded intelligent clients rapidly migrated to CoStar. Not surprisingly, while CoStar sales were strong this quarter, the bookings did not rise over the Q1 twenty eighteen exceptional high watermark. We have grown the CoStar sales force by 6 percent from the Q4 of 2018 to the Q1 2019. We intend to continue to grow the CoStar sales force by approximately 30% overall from Q4 2018 to Q4 2019.
We have a robust product pipeline for CoStar, CoStar Analytics and the LoopNet marketplace, So we want to grow our sales force to meet the scale of our future opportunity. As we add salespeople, they typically have material revenue impact about a year after they join us. We attribute a big part of our Apartments.com sales success the priority we place on customer service. Our CoStar sales commission plans over the past year now reflect these same values. As a result, our sales people are spending more face to face time with our clients and prospects.
CoStar sales meetings were up 43% year over year from 30,000 in the Q1 of 2018 to 43,000 in the most recent quarter. On a per salesperson basis, meetings were up 33%. Net promoter recommendation scores for the CoStar sales force declined to 9.02 on a 10 point scale. I believe this is a leading indicator of client retention and future sales growth. Apartments.com continues to increase our industry leading position among Internet listing services by achieving all time highs in unique visitors and number of visits as reported by Comscore for both the month of March and the Q1 2019.
In the Q1 2019, the Apartments dotcom network had 162,000,000 visits, up 35% year over year, and averaged 20,000,000 unique monthly visitors, an increase of 30% year over year. According to Comscore, the Apartments dotcom network hit an all time high of 61,000,000 visits in March. That's an increase of 18,000,000 visits over March of 2018 and is up 40% year over year. We have been the number one most visited apartment network for the past 41 months. Also according to comScore, as a network, we had twice the number of monthly visits and monthly visitors that the RentPath network had in the Q1 2019.
On a site basis, apartments.com had 4x the number of monthly visits the Department Guide had. Wow! Apartments.com tracks a list of 10,000 apartment keywords that we believe are are important for marketing multifamily communities online. As of today, we hold the number one organic position at Google's core results for 93% of those keywords when compared to other listing sites. Our primary competitor, RentPath, only holds 2% of them.
We continue to pull further away from the competition, and I believe that in 2019, we will see a strengthening continuation of that trend. We launched our 2019 apartments.commarketing campaign, which focuses on the reality that the apartments you choose will change the future view. We have 4 new TV spots of the highest production quality and special effects we've ever produced. Of course, they feature Jeff Goldblum as our spokesperson, Brad Bellflower. We've already gotten great feedback from our clients, from renters and the media on the campaign, and we're excited that the heaviest portion of our media plan kicks in during the Q2 to support peak rental season.
We're also excited to announce that tomorrow, we plan to launch a completely redesigned forrent.com website just in time for peak rental season. The new site has a completely redefined renter search experience. Key features include a beautiful new design, lightning fast performance and optimization to rank in the top of Google searches. It is the 1st site in our network of 11 sites that offers renters and more of a focus on the independent or smaller properties by returning them mixed in to the very top of our search results. So we have renters the feeling that this is really a condo small home and small independent owner website as well as having large institutional properties.
We plan to support the new site launch with aggressive levels of marketing support, including paid search, display advertising, social media, e mail marketing and strong push by our direct sales team. We look forward to the new site delivering even more traffic leads and leases to our advertisers. We've identified a need that some advertisers with properties in the lease up low occupancy and highly competitive market environments have to drive additional lease up communities even beyond our existing top level prior top level Diamond package. In response, we have introduced a newer higher tiered advertising level called Diamond Plus. We're really creative with that name, which guarantees the advertiser placement in the top three search results in a given submarket.
The We believe Diamond Plus Ads will continue to positively impact our net new bookings throughout 2019 and beyond. In March, LoopNet visits grew 23% year over year and we had nearly 6,000,000 unique monthly visitors coming to the site. We are steadily rolling out a number of enhancements for LoopNet as we continue to focus on improving the user experience. This is similar LoopNet strategy we successfully deployed with Apartments.com marketplace. We continue to show strong success with sales of higher priced power ads to boners on the LoopNet platform, and these remain a major part of our growth strategy.
We had nearly $3,000,000 in annualized net new sales of Power ads in the Q1 and the highest priced diamond level ad sales showed the strongest growth at 87% premium lister product, we continue to focus on raising the quality of the listings, eliminating unlimited listing plans with foreseeable discount and increasing prices on many of the older underpriced listing plans. Average price per listing for this product was up 49% compared to the same quarter last year. Realla is our United Kingdom emerging version of LoopNet. I'm very excited about the potential of that product and in fact we have seen a 346% year over year growth in unique visitors on Reala. Velvex is our version of LoopNet for Spain and its organic unique visitors are up 163% year over year.
Right now, we're in investing phase on these sites, building out the traffic, but we intend to begin monetizing them later next year. We continue to deliver a steady stream enhancements to the CoStar products. Dozens of these enhancements are new commercial real estate analytic tools. These include tools for assessing the probability of selling leasing in various timeframes, animated weather map like time based market trends laid over digital markets maps, market overview videos from our team of analysts and economists, daily rental rate detail, new statistical exports, retail property underwriting reports and much more soon to be followed by even more enhancements. We recently announced a strategic relationship with Fort Worth based Buxton.
Buxton is an industry leader in retail site analytics. They analyze and model the retailer's successful stores' competitive threats and store to store among other factors, and then determine ideal potential new locations that are likely to achieve above average sales. Now Buxton clients who are also CoStar clients will be able to search CoStar for properties that are within ideal trade zones Buxton has identified, This combines the best strengths of each company to provide greater convenience and value to our mutual customers. Both firms intend to cross sell to one another's client basis. In the Q1 of 2019, CoStar Real Estate Manager revenue was up 95% year over year.
It continued its strong performance with an increase of 15% on net new bookings in the Q1 of 2019 compared to the same strong quarter last year. Cote Real Estate Manager continues to add Fortune 1,000 customers such as HP, Archer Daniels, Campbell Soup, AECOM, Aramark and many others. CoStar Real Estate Manager has staked out a leadership position in the lease accounting software market and Q1 represent the Q1 reporting under the new ASC 842 standard. Continued opportunity exists with later reporting public companies as well as the full slate of large private companies. We expect to continue to leverage this market leadership position throughout the remainder of 2019.
As we continue to add more institutional and analytic services to CoStar Suite, we have begun to enhance our research coverage of REITs, CMBSs and Institutional Investors. In the Q1, we completed audit and reconciliation of more than 12,000 REIT owned properties, which encompassed 1,600,000,000 square feet. We added nearly 4,000 true owners to current or formally owned REIT properties. We reconciled CMBS filings back to 2015 and stayed current on 2019 filings, adding thousands of new lease comps, rental points and new deals. Brokers using Listing to Anshark continued to be solid contributors to the database.
In the U. S, more than 40% of our listings are added each month by our users and new users are steadily joining the ranks of Listing Manager. We plan to market Listing Manager to encourage more use of this service. We believe that the Listing Manager function in CoStar and LoopNet will help us to deliver higher quality data, more effective marketing benefits, greater convenience to our clients, all at a much lower cost than some of our historical data collection methods. Commercial Real Estate continues to attract unprecedented levels of interest from investors.
Total deal volume has set new records in each of the past few years and pricing continues to rise. The high level of interest in commercial real estate is justified by sound fundamentals characterized by strong leasing, consistent demand, limited supply and the lowest vacancy rates since 2000. The robust health of the sector has benefited the industry at large, including brokers, appraisers, underwriters, donors and lenders. In the multifamily sector, high levels of construction have been boosting advertising revenues for platforms like Apartments.com, a near necessity for communities in lease up. Barring any surprises, the U.
S. Will set a record the U. S. Economy will set a record in July 2019 for the longest post war expansion on record with 102 months of consecutive job gains. We see no obvious imbalance stretching this remarkable streak in the commercial real estate markets and consensus forecast and CoStar's house view as growth continuing into 2020, albeit at this lower pace.
International concerns around Brexit and China may inflow slightly, but may also perpetuate the flood of international capital that has fueled U. S. Asset price gains, including in commercial and multifamily real estate. The slow and steady growth of the past few years has produced consistent demand and rent gains across all property types. Apartment rent growth accelerated last year, posting 3% gains for the first time since 2016, despite increasing supply.
But a broad shortage of housing, especially for sale product, has produced unprecedented demand for new rental product. And transaction volume continues to set new records as investors clearly believe in the multifamily story. The office market features enviable fundamentals and limited supply, at least outside of major markets, which are undergoing wholesale reinventions like Hudson Yards in New York, Boston Seaport, Amazon's HQ2 in Crystal City, Lake League Union in Seattle and South Loop Market in San Francisco. The single digit office vacancies have delivered only media rent growth at just 2% over the past year. Perhaps the most remarkable feature of the office market is the consistency of rent growth, 8 years of slow, steady increases, a welcome departure from the good and buff cycles of 1999 and 2007 or throw in there 1986 or 1981.
I think that's roughly right. The outlook calls for more steady if modest rent gains thanks to low vacancy levels even if demand weakens. Demand for industrial properties remain at historically high levels driven by the growing trend towards online purchasing and same day delivery. Still, vacancy rates appear to have bottomed out amid record setting deliveries. Persistent rent growth of more than 5% has drawn record setting sales volume, resulting in price appreciation exceeding 10% year over year.
The growing economy has yet to reverse lackluster dynamics for retail sector though as structural changes in the industry weigh out demand for physical space. While well located properties continue to perform well, historically low vacancy rates are still mainly a result of limited construction and have yet to fuel significant rent gains. We expect the record levels of interest in commercial and multifamily real estate continue. Across all property types and in any economic outcome, Hostar Group offers products and services that are essential to owners, lenders, brokers, investors and property managers alike as they participate in commercial real estate's increasingly competitive ultra high stakes marketplace. It's been a great start to the year for CoStar, and I'm extremely excited about the rest of the year and particularly the coming decade as we continue to execute on our long term vision.
At this point, I'm going to liven up the call by turning it over to our CFO, Scott Mueller.
Well, thank you, Andy, An exciting introduction. Here comes the lively portion of the call. I'm going to call it call plus. All right. Well, we did have a great start to 2019.
Great sales numbers, produced great revenue growth, and these both allow our leverage model to give us increased levels of profitability and strong cash generation. So as Andy mentioned, revenue in the Q1 of 2019 increased 20% over Q1 of 20 was 13% in the Q1 of 2019 versus Q1 of 2018. The growth is primarily driven to both brokers and owners and it's evenly balanced between existing clients and new logos. As previously communicated, the revenue growth rate for CoStar Suite is expected to be in the 11% to 13% range for 2019. Revenue in the Information Services Group grew 25% year over year in Q1, primarily as a result of CoStar Real Estate Managers revenue growth of 95%.
The adoption of the new lease accounting standards created strong demand for our real estate manager product, which we do expect to continue, although slightly moderated throughout the year as we move past the peak adoption date of the new lease standard. Information services revenue is expected to grow at a rate of 11% to 13% on a year over year basis. Multifamily revenue growth for Q1 remained strong at 30% over the Q1 of 2018, which is in line with our expectations. Going forward, the 2nd and third quarters of 2019 are expected to reflect lower growth rates than the Q1 of 2019 for two reasons, both related to the ForRent acquisition. First, we've now lapped the anniversary date of the ForRent acquisition.
2nd, there will be a modest negative effect on the 2019 growth rate because certain products and duplicative revenues were eliminated since the acquisition, but were in our 2018 base results. The growth rate in the Q2 for 2019 is expected to be in the low teens, increasing to the high teens by the Q3. On a pro form a basis, when we include ForRent for all of 2018 and we exclude the discontinued services, the year over year multifamily revenue growth would be approximately 20% in both the second and the third quarters of 2019. Multifamily revenue is expected to exit 2019 in line with the 20% full year outlook for multifamily. Last but certainly not least, commercial property and land revenue grew 17% year over year in the Q1 of 2019.
This is due to the continued strong sales of LoopNet marketing products, including our tiered advertising products, which grew approximately 37% year over year in the Q1. Our lands business also contributed to strong growth and 21% year over year revenue growth. And we continue to expect organic growth in the commercial property and land sector in the 18% to 20% range for 2019. Gross margins came in at 78% in the Q1 of 2019, in line with what we saw in the Q4 of 2018, and we expect this level of gross margins to continue around 78% for 2019. Operating expenses of $164,000,000 for the Q1 of 2019 were slightly below our expectations, primarily as a result of modest timing delays in our marketing and some G and A spend.
1st quarter adjusted EBITDA of $125,000,000 represents a 49% increase compared to adjusted EBITDA of $84,000,000 in the Q1 2018. Adjusted EBITDA was approximately $3,000,000 above the midpoint of our guidance range and about $1,000,000 above the high end of our guidance range. Resulting adjusted EBITDA margin of 38% is 90 basis points above the midpoint of our guidance and 7 40 basis points above the 31% margin we achieved in the Q1 of 2018. Net income for the Q1 of 2019 of $85,000,000 increased 63% or $33,000,000 compared to Q1 2018. Our effective tax rate in the quarter was 13%, reflecting benefits associated with share based payment transactions.
Non GAAP net income for the Q1 increased 54% to 90 $2,000,000 or $2.53 per diluted share and includes adjustments for stock based compensation and acquisition related expenses. Non GAAP net income for the Q1 assumes a tax rate of 25%, which does not include discrete items such as the impact of the share based payment transaction. Cash and investment balances were approximately $1,200,000,000 as of March 31, 2019, up $132,000,000 since the end of 2018. Now let's look at some of our performance metrics for the quarter. At the end of the Q1, our sales force totaled approximately 757 people.
The renewal rate on annual contracts for the Q1 was in line with the rate achieved during the Q4 of 2018 at 90%. The renewal rate for customers who've been subscribers for 5 years or longer was 96%, in line with the 96% renewal rate in the Q4 of 2018. Subscription revenue on annual contracts now accounts for 82% of our revenue in the Q1, up from 79% this time last year. The improvements are primarily the result of our successful migration of the ForRent customer base to our Apartments.com network and to annual contracts. I'll now discuss our outlook for the full year and the Q2 2019.
Based on Q1 revenue and sales results, our full year 2019 revenue range of $1,370,000,000 to $1,380,000,000 remains unchanged. We continue to expect revenue growth for the year between 15% 16%. We expect revenue for the Q2 of 2019 in the range of $333,000,000 to $337,000,000 representing top line growth of around 13% at the midpoint. The growth rate expected in the second quarter is negatively impacted by the discontinued ForRent revenues mentioned earlier and the lapping of the anniversary of that acquisition. On a pro form a basis, including ForRent for all of 2018 and excluding discontinued services, our revenue growth rate outlook for the Q2 would be approximately 16%.
We expect adjusted EBITDA to be in a range of $495,000,000 to $505,000,000 for the full year of 2019, in line with our previous outlook. Year over year, we expect adjusted EBITDA growth of 20% with adjusted EBITDA margin for the year of approximately 36% at the midpoint of the guidance range. For the Q2 of 2019, we expect adjusted EBITDA in a range of $98,000,000 to 102,000,000 dollars As in prior years, we expect the 2nd quarter to be the low point for adjusted EBITDA margins for the year as we increase our marketing spend from the start of the peak apartment rental seating. Margins are expected to increase sequentially in the 3rd and 4th quarters. In terms of earnings, our revised range of 9.90
dollars to
$10.10 for full year non GAAP net income per diluted share is an increase of approximately $0.10 at the midpoint compared to our previous outlook. For the Q2 of 2019, we expect non GAAP net income per share in a range of $1.94 to $2.02 based on 36,700,000 shares. So to wrap things up, great start to the year, very strong position financially, and I certainly look forward to updating each and every one of you on our progress as we continue throughout the year.
And our first question comes from George Tong of Goldman Sachs. Please go ahead.
Hi, thanks. Good afternoon. Your 2Q guidance implies about 120 basis points of year over year EBITDA margin expansion at the midpoint, which compares with 7.40 bps of margin expansion you just delivered. And your full year guidance suggests the rate of margin expansion will narrow relative to the first half. Can you discuss the factors that are driving a more conservative back end margin outlook?
Yes. I think what you see, George, is certainly the timing of investment costs. 2nd quarter was primarily driven by all the marketing that we're spending, and we expect that to be our strongest quarter, but still up in the 3rd Q4 over the prior years. I think you also see a lot of benefit in the Q1 as we passed had the ForRent acquisition annualizing. And so all those benefits are now into the numbers as we lap the margin improvements we got last year from ForRent.
So those are pretty much the biggest factors I would call
All right. Thank you. And now to the line of Bill Warmington of Wells Fargo. Please go ahead. Good afternoon, everyone.
Welcome, Bill. We've been waiting for you.
So, through that, you're handing out free Teslas to all the sell side analysts.
Is that the right herd? It
Depends on the nature of the report.
Okay. That's a good question, Phil. Thanks.
All right. Okay. Now the real question. The I was hoping for an update on the LoopNet marketplace in 2 ways. 1 being the build out of the LoopNet marketplace site and how that's going?
And second is, can you talk about some changes in the sales force structure moving to a more of a national account coverage model that might help the sale of that?
Sure. So definitely a lot of effort, a lot of work going on LoopNet 2.0. And actually, it was I just got there for a week or so last year, the development last week. 2 weeks ago, I was with the development team for the week out in California going over product, a very productive meeting. And we hope to make strong releases in the 3rd Q4 around that criteria.
I picked up a customer service call this morning randomly, and the customer was complaining they wanted 2 major features in LoopNet that we have already put into the new design. So in the right top of the list. So stronger, easier searching for restaurants and being able to highlight things with broker comments. So feel good about that, where that's going. We're also spent last week with our photography team, making sure that we're right to support the new elements of that product.
And you can see the growth beginning to click up and you remain very excited about it. And you also see it beginning of an effort going on in Spain and in United Kingdom to match the effort that we're doing here. And so all in all, it remains on track and or side effect. In terms of the major accounts or the national accounts, the sales force, we took the we had last year quotas on what the sales force needed to sell of LoopNet in order to make the higher commission rates. We removed that this year so on general customer service and set their own allocations and priorities.
And the nice thing is the sales results will continue to come in for LoopNet naturally without the commission focuses. So we think that's looking good. And we will be structuring the LoopNet major national accounts the same way we structure Apartments.com in the near future. So it's a lot of software work going on and a lot of operating work that needs to be done to position for it, but it's on track and it's a top priority.
All right. Thank you. And now to the line of David Ridley Land of Bank of America. Please go ahead. Sure.
Two questions on the impact of the ForRent product cancellations. 1, do you have some sort of clarification for the impact of net bookings in the Q1? And 2, did I get my sort of math right around your guidance for the Q2 that it's about $3,000,000 of revenue that was canceled for the Q2. Is that in the ballpark?
No, we don't have a number on the bookings side, David. There was there's certainly effects running through last year, but we didn't talk about on the bookings side effect. But on the pro form a side, let me see the let me look for the apartments pro form a for you. Just a second. I will get it.
I'll share somewhere. So yes, we had somewhere between $3,000,000 $6,000,000 per quarter throughout the year that are going to affect us, and the biggest effect would have been in the Q2 for 2018. So hopefully that will help give you some idea of how we're helping those discontinued revenues are.
All right. Thank you. And now to the line of Peter Christiansen from Citi. Please go ahead.
Good afternoon. Thanks for the question. On the 40% bookings growth in multifamily, do you have any sense of what portion of that is coming from competitive takeaways versus just normal wins, new wins? And then my follow-up is with $1,200,000,000 going on, dollars 1,300,000,000 in cash on the balance sheet, what's your sense for deploying that capital as we look forward the next couple of quarters?
Good questions. So the first one, I was I ran into our Head of Apartment Sales last week, dad in Richmond, and she might tell me about some huge competitive wins we just had. I think she was talking about some maybe with 135 properties moving over or something or some organization with 135 properties moving over. So my sense is that there is a lot of competitive shift going on. We are having some success with Diamond Plus adds as well, but a lot of it's competitive shift.
And the numbers are really quite impressive. Like when I look at the total accounts that I won't recall exactly what the number was last time I looked, but they are very impressive competitive wins and for good reason, because the traffic numbers are so compelling, the lead advantages are so compelling on Apartments dotcom. And the benefit of having invested well over $1,000,000,000 in Apartments dot com has resulted in a huge competitive distancing going on there. I also got an email today from the apartments regional sales manager with someone moving a bunch of properties over, then they specifically cited the quality of our customer service. They said the fact that we were in their communities every month or every month and a half, briefing them on what was happening in their local market and the fact that they had not seen the competitor in 4 years was a major factor in shifting all their purchasing over to us.
So what hard numbers I've seen in the last 2 months, I would say major competitive shift and anecdotally in the last 2 weeks, I'd say continuation and possible acceleration of competitive shift. In terms of our petty cash of $1,200,000,000 to $1,300,000,000 we are remain active in looking at a number of potential acquisitions, but we remain selective. And we devote a significant amount of effort to that ongoing. And those things will happen in time, but our track record over the last many years of acquiring 30 plus companies, it's sort of hard to imagine that won't continue. And so that we would expect that capital would be put to good use in transformative ways.
And we look forward to that day.
And now to the line of Andrew Jeffrey from SunTrust. Hey, guys. Good luck to hear the update today.
Andy, one of the areas
that has come up over the years is international and you've kind of mentioned big markets, but maybe not a whole lot of companies with critical mass or maybe different market structures. It sounds like maybe you're getting closer to monetizing that opportunity now. Can you kind of frame that up and what it might mean over the next few years for your growth?
Sure. So we're I mean, you're right. There are some acquisition opportunities over there that are midsized that could be interesting, but really what we're focusing on is just organic growth in those markets. So we have been ratcheting up our investment in the last 18 months in the United Kingdom. We're in Germany and Spain.
We see some exciting some good opportunities in France, availability of lower cost digital data, machine learning to harvest data on the Internet. So we're in an investing period and we saw on a small scale, we saw a huge growth in the Q1 in the United Kingdom in our bookings, but still modest by comparison to the United States. And we think that we have our expectation that, that growth will pay off in the next couple of years. The nice thing is we're now getting a multi country footprint, and I will be I think it will be transformative when we can put 3 or 4 European countries into one consistent platform. So that's one of our big goals in the next 3 years or so, and I think that will move us up to parallel growth rates in the United States.
And now to the line of Stephen Sheldon from William Blair.
On bookings, it seems like you're continuing to see broad based momentum, but wanted to ask how bookings activity in the Q1 kind of compared to your expectations.
So just excluding the LoopNet runoff in
the year ago period, dollars 48,000,000 this quarter was down some relative to about $54,000,000 in the year ago period and $50,000,000 in
the Q4. I know there
is some seasonality relative to the
Q4, but anything else that we
should consider when making the sequential and the year over year booking comparisons? Not really. I think we were very happy with the bookings. I was upwardly surprised. Like the Apartments.com bookings were extremely strong and continued extremely strong.
We are running the business looking 9 months, a year or so out. So we're working a lot of things that are not month to month and there is always volatility as you look at the numbers, like what land might be doing 1 quarter, what farms might be doing 1 quarter, things shift around, they're all generally really strong. But there is since they're real returns and real sales results, there's volatility to them. If they were ever perfectly linear, that'd be a made off situation. That's not happening.
And so they move around, but they're strong. I think we got the payoff from last year's customer service and conversion efforts with 4 revenues to the surge in productivity there. The investment in additional face time with customers with CoStar will probably pay off in the next two quarters. So, overall, great quarter, very happy with the results and phenomenal results.
And now to the line of Mayank Tandon from Needham.
Thank you. Andy or Scott, what are the
things about revenue growth in terms of the pricing that you expect this year and over time and contribution from new clients plus increased penetration from current clients? How should we think about the growth profile
and can you break it down that way? I don't realize it's going to be difficult across different segments, which is maybe growth something overall.
I'll throw some marks that you can do as well. So a lot of the pricing lift we're seeing is, we are not driving aggressive price increases against our core customers for the same price same products, the exception being on our marketplaces, demand is really strong. So with LoopNet, you're seeing super strong demand in markets like Southern California and Southern Florida, so you're getting some saturation on advertisers. So we're eliminating big, big, deeply discounted contracts. So someone was hitting 60% price breaks or discounts.
We're eliminating those consistently and bringing people more up to standard pricing level that looks like gives you that 49% year over year price lift on PL. It's not so much for taking off everybody up, we're eliminating low end discounts. Then you're getting product transformation. So as we rebuild LoopNet to really effectively showcase mega properties and super high end properties, Those will be sold at dramatically higher price points, but to new customers for new product. So that will bring the ASP up dramatically, but not because we're doing across the board increases for the same product, It will be more incremental prices.
As it continues, we go into more analytic products for CoStar, you're selling to higher utility institutional clients, you get higher ASPs there as well. But delivering product to the 1 or 2 person brokerage shop in Oklahoma City remains just a higher priority. We're not taking those prices up beyond roughly inflation. So it's a mix. Do you want to?
Yes. We tracked the pricevolume mix equation into the big groups. And as you just said, the only place where we really had price increase was in the LoopNet, getting rid of some of those discounts. And then as we moved people in the ForRite acquisition to the broader network, then you saw this other effect of moving to a broader network contract, which would have higher revenues per property than what we had before. So it's
not really a pure price increase, it's
a broader package increase. And so it's those types of things and the other ones that Andy mentioned that are really driving what we call price, which really is accounting for good half of what our revenue growth is in many quarters because of those effects.
All right. Thank you. And now from the line of Pat Walraven from IMT Securities. Please go ahead.
This is actually Joe Goodwin on for Pat.
Thank you for taking my question.
I'm just curious, you have a former salesperson,
JMP Securities.
Yes, as a former software salesperson myself, I
was looking at the net promoter scores that you all shared earlier
and they seem really high and from
my experience, you'll always love speaking with software sales reps.
That's what it implies.
So I guess just really curious, how do you
guys go about calculating those scores and how and when should you look at that data?
Yes. So what happens is there is an independent team that works in a different group from sales based out of Atlanta, Georgia. And each day, they look at meetings that occurred 4 to 24 hours prior, and they randomly sample the people that those meetings were held with, then I won't get the wording exactly right, but they say based on your meeting yesterday and your overall impression of Apartments or CoStar, how likely you recommend CoStar or Apartments dotcom to a friend or colleague. So it's a recommend question and that gets us a 9.02 on CoStar and it's a 9.8 on apartments.com. And there was one woman, sorry, I can't remember her name or where she was, who for the year last year, Skyrock scored 9 point 98%.
So she is just a little bit of a stronger first person than you were. I've been down to her like 9.98 and I'll try to get her name to the next earnings call, but I won't actually consult a recruiter. You're right that people don't want to talk to typically don't want to spend their day with software salespeople, but we try to make sure that we're showing some new benefit to them. We also talk to them about the general market. I also believe we delivered over 1,000,000 tchotchkes last year.
Cookies and the candy. Cookies, candy, a charger cable, a cozy. We delivered so many little minor gifts. We do have all kinds of strategies for building those relationships and it tends to work.
And now to the line of Sterling Auty from JPMorgan. Please go ahead.
Sterling, we're having a hard time hearing you.
Is that any better?
That's better.
Okay. By saying that in the prepared remarks, you had the commentary on the strength of multifamily, but that's on the deceleration of commercial real estate. Just on a high level, does that mean that you as you look throughout the rest of the year that the focus of the investments will continue to have the strength in multifamily housing? And just this quarter, did you invest to the level you thought you would in the commercial real estate side of the business?
I would think that we did invest in the commercial real estate side of the way we would expect to. And investing I think the question is, are we investing into the strength of multifamily? In their prepared remarks, I noticed that and I thought, yes, there's a lot of upside in commercial real estate right now as with the whole economy. And yes, the statistics, the market indicators are all as the best I've seen in my career, for sure. I hate to ever admit this, but I also we noted earlier $1,200,000,000 to $1,300,000,000 in cash.
Downturns are good too because we've bought some amazing companies for the downturns. And we are not terribly cyclical as a company. We typically are able to grow through downturns. And there is actually both a cyclical advantage to strength in the apartment industry for us as people are building a lot of new developments. They are ready to invest in getting faster lease up on those new buildings.
Conversely, when the wheels come off and vacancy rates drop, what they spend on lead generation with Apartments.com is PS, any other call for term you want to use, compared to the amount of money at risk in these communities. So when someone is spending $1100, $1200 a month on getting the majority of their leads to keep their $250,000,000 property leased and solvent, they don't cut back on that $1100 a month. So I think that's one of the nice things about our business is we are pretty we up cycle and we're very resilient on the down cycle. But still today, no indicators show the down cycle.
Thank you. We have no one else in queue. Please continue.
With that, we're going to wrap up the call. Thank you, everyone, for joining us. And thank you, Scott, for a fantastic call plus. And thank you, Rich, for fascinating read on the risks and the definition. Look forward to hearing hearing spending time with you guys again at the end of the second quarter.
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