The Synopsis Dialogue. Meta, Perimeter Solutions, and CoStar 3Q25 Earnings, Time Spent Competition, 50% Sales Spent on S&M
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Nov 3, 2025 In this discussion, the hosts dive into Meta's soaring growth in daily and monthly active users, along with substantial investments in AI. CoStar's impressive revenue uptick of 20% and its hefty 50% sales and marketing expenditure are highlighted, along with insights on its valuation intricacies. Perimeter Solutions faces challenges with its P2S5 facility while securing a lucrative USDA contract. The competition for user attention in the digital landscape is also examined, showcasing the evolving battle for engagement.
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CoStar's Growth Hinges On Elevated S&M
- CoStar grew ~16.5% revenue ex-acquisition and maintains high retention, but S&M is 50% of revenue.
- The key valuation question is how much S&M can sustainably decline without crushing growth.
Request S&M Breakouts For Margin Clarity
- Demand clarity on how CoStar allocates S&M between brand advertising and salesforce costs.
- Ask management for breakouts to estimate steady-state margins and normalized owner earnings.
CoStar Valuation Still Priced For Growth
- At $65 share price CoStar implied 38x mature margins using a 30% margin assumption.
- Even after the sell-off you need sustained double-digit growth to justify the premium.