Zillow beats expectations with fourth quarter earnings results
The Seattle-based real estate giant reported revenue of $435 million, exceeding its estimate of $413 million.
Zillow delivered numbers it says "outperformed expectations" in the fourth quarter, given the slowdown overall in the market.
The company reported consolidated revenue of $435 million in Q4, which was down 19% year-over-year. According to Geekwire, Q4 revenue beat estimates of $413 million.
Full-year revenue was down 8% compared to the red-hot real estate market of 2021.
"While navigating a slow and difficult housing market in 2022, we kept our eyes on the future — our vision of building the housing super app," said Zillow co-founder and CEO Rich Barton in a news release announcing the fourth quarter results. "Our consolidated Q4 financial results outperformed our expectations, and we've been rapidly shipping products aligned with our five growth pillars."
In the earnings call following the release of the results, Barton was asked by a caller about the possibility of CoStar entering the residential ecosystem.
"Building great products and consumer brands is really hard… we like our position. It gives us great comfort that no matter what comes to pass from a competitive perspective, or a regulatory perspective or a DOJ perspective, our position and confidence is derived from the fact that we have this great relationship with this giant audience that is served by this trusted brand," Barton said.
Revenue: Consolidated Q4 revenue was $435 million, and full-year 2022 revenue from continuing operations was $2 billion. Q4 revenue was down 19% year-over-year, while the full-year 2022 revenue was down 8% over 2021.
Cash and cash equivalents: Cash and investments at the end of Q4 were $3.4 billion, compared to $3.5 billion at the end of Q3 2022, after $174 million in share repurchases during the quarter.
GAAP Net loss: On a GAAP basis, consolidated net loss was $72 million for Q4 and $101 million for 2022. Consolidated net loss from continuing operations was $72 million for Q4 and $88 million for 2022.
EBITDA (earnings before interest, taxes, depreciation and amortization): Total Adjusted EBITDA from continuing operations was $73 million for Q4, down from $154 million in the same period in 2021. For the full year, EBITDA was $514, down from $654 million in 2021.
Traffic: Traffic to Zillow Group's mobile apps and websites in Q4 was 198 million average monthly unique users, which was flat year-over-year. Total visits during Q4 were 2.2 billion, down 5% year over year. Average monthly unique users for 2022 were 220 million, up 1% year-over-year. Visits during 2022 were 10.5 billion, up 3% from the previous year.
What Zillow had to say
In a letter to shareholders, Barton said the company is on solid ground at the start of 2023, noting that the company's traffic and brand is extremely strong and regained the top spot as the most-visited rentals platform.
More importantly, Barton said in his letter, "We exited 2022 with our employee base in a far more stable place than where we started the year."
Notable moves in Q4
The company made significant cuts to prepare for the downturn in the real estate market in 2022, including ending its iBuying program. In the letter to shareholders, Barton noted that they began the year with 10,000 iBuyer homes on the balance sheet and ended the year with zero.
Zillow also announced on Feb. 15 that it has launched its partnership program with Opendoor in the Atlanta and Raleigh, North Carolina markets. Customers in those markets can now simultaneously request both a cash offer from Opendoor and an estimate of what their home could sell for on the open market with a local Zillow Premier Agent partner. This new product experience will launch in additional markets nationwide in the coming months.
Write to Dave Gallagher.