Zillow today posted record first quarter revenues of $39 million, but losses accumulated as the fast-growing Seattle company digested acquisitions and spent heavily on a nationwide advertising campaign.
“We are pressing our advantage,” said Zillow CEO Spencer Rascoff in an interview with GeekWire.
Rascoff called the nation’s housing recovery “gravy” to Zillow’s overall business, noting that it provides a nice “tailwind.”
Zillow’s revenues were up 71 percent, and the company boosted its revenue targets for the year to $178 million to $182 million. Zillow’s shares initially traded up in after hours trading, but fell into the red later. It now has a market value of more than $2.1 billion.
Rascoff declined to discuss the company’s valuation, describing himself as a “lowly operator running the company.” He said it was up to Wall Street to value the business, and up to him to build it.
At this juncture, he said it makes sense for Zillow to invest in opportunities, especially what he calls “brand whitespace” in the real estate category. As part of that, the company showed a net loss of $3.7 million during the quarter.
“We control the margin. We choose what margin to operate the business at,” said Rascoff, adding that they’d decided to invest in the brand and the market in a big way in 2013. As part of that, Rascoff said that they will double their planned ad spending this year, increasing it by as much as $10 million to $15 million.
The company is also attracting a record number of visitors, buoyed in part by the recovering housing market. Zillow topped 52 million unique visitors during the month of April, up from the previous record of 50 million in March. That includes mobile traffic where Rascoff said Zillow users last month viewed 241 million homes, or 93 homes per second. Today, 55 percent of its visits on Zillow come from mobile devices.
In a release, Rascoff called it “a breakout quarter.”
“We are extremely excited about the massive market opportunity in front of us, and about growing our audience, our Premier Agent business, and our emerging marketplaces,” he said. “We are stepping on the gas in a number of areas, playing the long game and making calculated investments in products, people and marketing that will allow us to create a massive, enduring brand.”
Previously on GeekWire: ‘Industry outsider’ Zillow zooms past $60 per share, now valued at $2 billion… Zillow CEO Spencer Rascoff’s secrets to startup success: Be a servant to your managers… Zillow CEO Spencer Rascoff: International expansion is not in the cards for now