REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS    

Disaggregated Revenue

The Company provides information, analytics and online marketplaces to the commercial real estate industry, hospitality industry, residential industry and related professionals. Revenues by operating segment and type of service consist of the following (in thousands):

	Three Months Ended September 30,
	2022						2021
	North America		International		Total		North America		International		Total
CoStar	$	203,657	$	9,033	$	212,690	$	174,071	$	9,194	$	183,265
Information Services	32,524		8,489		41,013		29,177		6,749		35,926
Multifamily	189,536		—		189,536		171,125		—		171,125
LoopNet	57,126		1,775		58,901		52,103		424		52,527
Residential	19,351		—		19,351		24,747		—		24,747
Other Marketplaces	35,430		—		35,430		31,729		—		31,729
Total revenues	$	537,624	$	19,297	$	556,921	$	482,952	$	16,367	$	499,319

	Nine Months Ended September 30,
	2022						2021
	North America		International		Total		North America		International		Total
CoStar	$	590,141	$	27,764	$	617,905	$	505,470	$	26,958	$	532,428
Information Services	93,306		23,424		116,730		84,959		20,820		105,779
Multifamily	547,372		—		547,372		508,629		—		508,629
LoopNet	164,417		5,228		169,645		151,770		1,082		152,852
Residential	57,565		—		57,565		53,939		—		53,939
Other Marketplaces	99,837		—		99,837		83,722		—		83,722
Total revenues	$	1,552,638	$	56,416	$	1,609,054	$	1,388,489	$	48,860	$	1,437,349

Deferred Revenue

Changes in deferred revenue for the period were as follows (in thousands):

Balance at December 31, 2021(1)	$	96,724
Revenue recognized in the current period from the amounts in the beginning balance	(88,431)
New deferrals, net of amounts recognized in the current period	94,791
Effects of foreign currency	(2,840)
Balance at September 30, 2022(2)	$	100,244
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(1) Deferred revenue was comprised of $95.5 million of current liabilities and $1.2 million of noncurrent liabilities classified within lease and other long-term liabilities on the Company’s consolidated balance sheet as of December 31, 2021.

(2) Deferred revenue is comprised of $100.1 million of current liabilities and $0.2 million of noncurrent liabilities classified within lease and other long-term liabilities on the Company’s condensed consolidated balance sheet as of September 30, 2022. This balance includes $1.9 million of net new deferrals recognized in connection with the Business Immo acquisition made in 2022. See Note 5 for further discussion of acquisitions.

Contract Assets

Contract assets are generated when contractual billing schedules differ from revenue recognition timing and represent a conditional right to consideration for satisfied performance obligations that becomes a receivable when the conditions are satisfied. Contract assets as of September 30, 2022 and December 31, 2021 were as follows (in thousands):

Balance	Balance Sheet Caption	September 30, 2022		December 31, 2021
Current portion	Prepaid expenses and other current assets	$	3,335	$	3,094
Non-current portion	Deposits and other assets	7,459		6,146
Total contract assets		$	10,794	$	9,240

The revenue recognized from contract assets for the three and nine months ended September 30, 2022 was $0.8 million and $1.6 million, respectively. The revenue recognized from contract assets for the three and nine months ended September 30, 2021 was negligible.

Commissions

Commissions expense is included in selling and marketing expense in the Company's condensed consolidated statements of operations. Commissions expense activity for the three and nine months ended September 30, 2022 and 2021 was as follows (in thousands). The Company determined that no deferred commissions were impaired as of September 30, 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Commissions incurred	$	40,511	$	30,337	$	115,749	$	83,983
Commissions capitalized in the current period	(29,720)		(17,876)		(83,875)		(49,798)
Amortization of deferred commissions costs	19,377		15,881		55,373		46,728
Total commissions expense	$	30,168	$	28,342	$	87,247	$	80,913

Unsatisfied Performance Obligations

Remaining contract consideration for which revenue has not been recognized due to unsatisfied performance obligations was approximately $462 million at September 30, 2022, which the Company expects to recognize over the next five years. This amount does not include contract consideration for contracts with a duration of one year or less.