CoStar Group shares tumbled 12.96% in post-market trading on Tuesday, erasing recent gains, as investors reacted negatively to the company's second-quarter earnings release. The real estate information technology firm reported results that showed strong profitability but fell short on the top line and offered a cautious outlook that spooked the market.

The sell-off was triggered by a slight revenue miss for the quarter. CoStar reported Q2 revenue of $925 million, just below the consensus estimate of $928.8 million. While adjusted earnings per share of $0.32 beat the $0.29 analyst expectation and net income surged 817% year-over-year, the revenue shortfall weighed heavily on sentiment. More significantly, the company revised its full-year revenue guidance downward to a range of $3.715 billion to $3.755 billion, from a prior range of $3.78 billion to $3.82 billion, and set third-quarter revenue expectations of $935 million to $945 million, also below the $967.7 million analyst consensus.

The post-market plunge came after shares had rallied over 10% across the two prior trading sessions as optimistic pre-earnings expectations were priced in. The combination of the minor revenue miss and the rare top-line guide-down prompted swift profit-taking, overshadowing the company's strong profitability metrics and upbeat commentary on its longer-term outlook in an uncertain commercial property market.