Zillow today posted record revenue of $88.6 million, a 66 percent increase over the same period last year and beating analysts expectations by $600,000. Earnings-per-share of 13 cents also beat the Street by five cents.
“We continue to solidly execute on our strategic priorities for the year, and are experiencing positive momentum throughout all of our home-related marketplaces,” said Zillow CEO Spencer Rascoff. “We plan to continue to invest heavily in our brand, business and products to fuel our long-term growth and strengthen our leadership position.”
The Seattle online real estate company also posted a net loss of $15.9 million, tied in part to acquisition costs.
Zillow is in the process of acquiring rival Trulia for $3.5 billion.
Shares of Zillow regained a bit of ground after the company posted its earnings report, with the shares increasing three percent in after hours trading. Shares of the company are up 26 percent so far this year.
Update: Shares of Zillow are now down almost 8.5 percent in after hours trading, after the company announced light guidance for the fourth quarter of this year. As would be expected, that also pushed down shares of Trulia, which dropped slightly more than 6.5 percent as of this writing.
Nov. 5, 2014 (GLOBE NEWSWIRE) — Zillow, Inc. (Nasdaq:Z), the leading real estate and home-related marketplace, today announced record financial results for the quarter ended September 30, 2014.
“The third quarter was another excellent one for Zillow with record revenue, traffic, mobile usage and Premier Agent advertiser revenue in what is turning out to be a transformative year,” said Spencer Rascoff, Zillow CEO. “We continue to solidly execute on our strategic priorities for the year, and are experiencing positive momentum throughout all of our home-related marketplaces. We plan to continue to invest heavily in our brand, business and products to fuel our long-term growth and strengthen our leadership position.”
Third Quarter 2014 Financial Highlights
- Revenue increased 66% to a record$88.6 million from$53.3 million in the third quarter of 2013.
- Marketplace Revenue increased 77% to a record$72.7 million from$41.0 million in the third quarter of 2013.
- Real Estate Revenue grew 86% to a record $65.6 million from $35.3 million in the third quarter of 2013. Premier Agent advertisers spent 87% more in the quarter compared to the same quarter one year ago.
- Mortgages Revenue grew 24% to $7.1 million from $5.7 million in the third quarter of 2013.
- Display Revenue increased 30% to $16.0 million from $12.3 million in the third quarter of 2013.
- Marketplace Revenue increased 77% to a record$72.7 million from$41.0 million in the third quarter of 2013.
- Basic and diluted GAAP net loss per share was $0.40 in the third quarter of 2014 compared to basic and diluted GAAP net loss per share of $0.03 in the same period last year. The third quarter of 2014 results include the impact of approximately $0.33 on basic and diluted GAAP net loss per share from acquisition-related costs due to the company’s proposed acquisition of Trulia, Inc.
- Basic non-GAAP net income per share was $0.15 in the third quarter of 2014 compared to basic non-GAAP net loss per share of$0.04 in the same period last year. Diluted non-GAAP net income per share was $0.13 in the third quarter of 2014 compared to diluted non-GAAP net loss per share of $0.04 in the same period last year. Basic and diluted non-GAAP net income (loss) per share excludes share-based compensation expense, acquisition-related costs, and the 2013 income tax benefit.
- Adjusted EBITDA was $14.6 million in the third quarter of 2014, or 17% of revenue, which was an increase from $4.3 million in the third quarter of 2013, or 8% of revenue.
Operating and Business Highlights
- Zillow reached a record 86 million average monthly unique users during the third quarter of 2014, up 41% year-over-year. In July, traffic broke an all-time record with nearly 89 million monthly unique users, an increase of 45% year-over-year.
- During the third quarter of 2014, visits to Zillow via a mobile device increased 70% year-over-year, and in September 2014, half of a billion homes were viewed on Zillow via a mobile device, which equates to 186 homes per second.
- Premier Agent advertisers spent a record amount with Zillow in the third quarter of 2014. Zillow added 4,059 net new Premier Agent advertisers in the third quarter for a total of 60,877 as of September 30, 2014, with average revenue per advertiser reaching a record$349, up from $264 in the same period last year. Premier Agent advertisers who have been on the platform more than 12 months spent 65% more in the third quarter this year than a year ago.
- Zillow Mortgages continues to grow despite tightening in the mortgage markets overall. While the Mortgage Bankers Associationreported a year-over-year decline in originations of 36%1 during the third quarter, Zillow Mortgages saw loan requests grow 18% year-over-year to approximately 7 million. The vast majority of these requests were for purchase loans, which also include Zillow pre-approval submissions.
- In the third quarter, Zillow announced plans to acquire Trulia, Inc. in a stock-for-stock transaction, which is expected to close in 2015. The combined company will maintain the Zillow and Trulia consumer brands, offering buyers, sellers, homeowners and renters access to vital information about homes and real estate for free, and providing advertising and software solutions that help real estate professionals grow their businesses.
- In September, Zillow began powering U.S. real estate search for Leju Holdings Limited, which operates one of the largest real estate sites in China, through a co-branded Zillow-Leju site. Chinese buyers are the largest population of foreign buyers of U.S. homes, and agents, brokers and MLSs that market their listings through Zillow now have their listings also appear on the Leju site for no additional cost or effort.
- Zillow continues to strengthen relationships with agents, brokerages and MLSs. The company recently added the New Jersey,Northern Nevada, and Northeast Oklahoma MLSs to the Zillow Partnership Platform. Additionally, Edina Realty, a Berkshire Hathaway Home Services affiliate and the largest brokerage in Minnesota, recently joined the Zillow Pro for Brokers program, as did Lyon Real Estate in Sacramento, California. There are now 3,200 brokerage partners in the Zillow Pro for Brokers program, which has grown 60% since the end of the second quarter.
- Zillow held its first-ever National Premier Agent Forum in Las Vegas in October. Approximately 1,000 Premier Agents attended to learn how to best utilize the Zillow platform, and to connect with Zillow executives, employees and other Premier Agents.
- In September, Zillow unveiled the fourth TV spot in the company’s award-winning national advertising campaign, “Find Your Way Home.” The 15 second spot, entitled “What If,” focuses on first-time home buyers and the mobile devices and products they use, likeZillow’s new mortgage pre-approval product. The ad is running in rotation throughout the fall and winter on major networks and national cable stations. Since launching its national advertising campaign, Zillow’s unaided brand awareness has increased from 9% to 31%2, and is now the largest in the category.
1 Source: Mortgage Bankers Association Quarterly Mortgage Originations Estimates as of October 2014.
2 Source: Ipsos AAU Brand Tracker, September 2014.
Quarterly Conference Call to Include Business Outlook
Zillow management will discuss Zillow, Inc.’s third quarter 2014 financial results, as well as the fourth quarter and full year 2014 business outlook, in a conference call today at 2 p.m. Pacific Time (5 p.m. Eastern Time) that will also be webcast live. The live webcast of the conference call will be available on the investor relations section of Zillow, Inc.’s website at http://investors.zillow.com/. For those without access to the Internet, the call may be accessed toll-free via phone at 877-643-7152 with conference ID# 24839928. Callers outside the United States may dial 443-863-7921 with conference ID# 24839928. Questions submitted via Zillow’s Twitter account (www.twitter.com/zillow) using the hashtag #ZEarnings, and questions posted on the Zillow Facebook page (www.facebook.com/zillow), will be considered during the Q&A portion of the call, in addition to questions submitted by those dialed in. Following completion of the call, a recorded replay of the webcast will be available on the investor relations section of Zillow, Inc.’s website at http://investors.zillow.com/.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, including, without limitation, statements regarding our beliefs about our execution on our strategic priorities, our positive growth trends and our future investments in our business. Statements containing words such as “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “will,” “projections,” “continue,” “business outlook,” “estimate,” “outlook,” or similar expressions constitute forward-looking statements. Differences in Zillow’s actual results from those described in these forward-looking statements may result from actions taken by Zillow as well as from risks and uncertainties beyond Zillow’s control. Factors that may contribute to such differences include, but are not limited to, Zillow’s ability to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments, including our proposed acquisition of Trulia, Inc.; Zillow’s ability to maintain and effectively manage an adequate rate of growth; the impact of the real estate industry o
