Zillow continues to invest heavily in its brand — part of an attempt to become the dominant player in online real estate. But that investment is coming with a cost for the Seattle company.
Zillow today posted a net loss of $6.3 million for the first quarter, nearly double the loss of $3.7 million for the same period last year.
Nonetheless, the company beat Wall Street estimates on revenue and earnings-per-share. Analysts projected a 24 cent per share loss for the quarter, versus the 16 cents per share loss it posted. “Zillow was much more profitable than expectations,” said Zillow CEO Spencer Rascoff in an interview with GeekWire. “We certainly are in growth mode.”
This marked the 14th quarter in a row of 67 percent or greater revenue growth.
“We’re continuing to ramp our marketing investment, and plan to be firing on all cylinders through the busy spring and summer home shopping season, which also helps increase value and opportunity for our agent and broker partners,” Rascoff noted in a press release.
The increased advertising is driving more revenue, which jumped 70 percent to $66.2 million for the quarter. Its marketplace revenue accounted for $53.4 million — up 72 percent — and display advertising revenue accounted for $12.9 million — up 62 percent.
During the fourth quarter, Zillow’s revenue also grew by 70 percent, up to $58.3 million. And it posted net income of $2.7 million.
Meanwhile, the company said that it attracted 79 million unique visitors in April, an all-time record for Zillow. A large percent of those users continue to come via mobile, with the company now saying that roughly two-thirds of its visits come via mobile devices.
Last week, Zillow’s primary rival, Trulia, announced a $5.3 million net loss for the first quarter on revenues of $54.5 million. Trulia, which now owns Bellevue-based Market Leader, said that it was nearing 50 million visitors during the month of April.
Both companies are spending heavily on advertising, with Trulia set to spend up to $45 million and Zillow to spend up to $65 million.
Asked about competition with Trulia and Realtor.com, Rascoff said that Zillow’s lead is “widening” in almost every measure, growing faster than the other sites.
Shares of Zillow were hammered in regular trading, down nine percent. The stock is now trading at about $93.60, with a market value of $3.7 billion. Despite beating Wall Street estimates, shares of Zillow fell slightly in after hours trading.
Asked about that, Rascoff said that he “pays almost not attention to what the stock does.” (Update: The stock is now up nearly six percent in after hours trading).
In a conference call, Zillow boosted its revenue guidance by $15 million, from $304 million to $308 million for the full year. It also boosted EBITDA to $48 million to $50 million. The company finished the quarter at 900 employees, up from 650 for the same period last year.
Editor’s note: Zillow CEO Spencer Rascoff will be the keynote speaker at the sold-out GeekWire Awards on Thursday May, 8th.