Rich Barton, CEO, Zillow Group.
Illustration by Lanette Behiry/Real Estate News

Zillow revenue up thanks to big gains in rentals and mortgages 

The company reported better-than-expected revenue of $529 million in Q1 — a 13% improvement from a year ago — and hinted at further monetizing its audience.

May 1, 2024
3 minutes

Zillow reported strong earnings this week, delivering on CEO Rich Barton's promise to "press down on the accelerator."

The company posted better-than-expected revenue of $529 million in the first quarter, a 13% gain compared to the same period last year. Highlights of the quarter include strong growth in rentals — which saw revenue increase 31% year-over-year — as well as Zillow's mortgage business, which witnessed a 19% increase in revenue year-over-year.

And despite the competition Zillow faces in the home search space, Zillow reported that it tallied 217 million average monthly unique users — which remained largely unchanged from a year ago — and 2.3 billion total visits for the quarter, which the company noted as a 3% improvement year-over-year. 

What Zillow had to say

Even with the big increase in rentals revenue, there is still more growth ahead, Barton and Zillow CFO Jeremy Hofmann wrote in their letter to shareholders.

"With the largest audience of renters on the market and a 42% revenue CAGR (compound annual growth rate) since 2015, we believe Zillow Rentals has a billion-dollar-plus revenue opportunity to digitally organize a large, fragmented, local marketplace highly valued by all participants."

They also said their large audience base has the potential to provide the company with ongoing financial gains. "Today, we have a diverse and growing business, yet monetize only a small share of our audience. We believe that this massive unconverted audience will drive years of growth ahead for Zillow."

Key numbers

Revenue: $529 million for the quarter, which is up 13% year-over-year and up roughly 11.5% from the previous quarter. 

Cash and investments: $2.9 billion, up from $2.8 billion at the end of Q4 2023. Zillow noted that the company also repurchased 2.1 million shares in April to the tune of $91 million. 

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $125 million in Q1, up from $104 million a year prior, and $25 million above the company's midpoint estimate.

Net income/loss: Net loss was $23 million in Q1, an improvement from the net loss of $73 million in the previous quarter and nearly flat year-over-year. 

Traffic and visits: Traffic across all Zillow Group websites and apps totaled 217 million average monthly unique users, which remained flat year-over-year, the company said. Total visits were 2.3 billion, which increased 3% year-over-year. 

Notable moves

Just a day ahead of its earnings release, Zillow announced the rollout of a new tool: a touring agreement designed to help agents abide by new NAR rules that require them to get a signed agreement with a prospective buyer before showing homes. The touring agreement is good for seven days, and buyers would not pay any fees for touring services. 

"We believe any negotiation of compensation, and what it will look like for the buyer and agent to work together, should happen after both meet and feel ready," said Errol Samuelson, Zillow's chief industry development officer.

In March, Zillow revealed a new syndication agreement with portal rival Per the agreement, Zillow said it would begin syndicating apartment listings to its home search competitor and would be the exclusive provider of multifamily rental listings on the site.

In the earnings release, Zillow also noted that Real Time Touring via ShowingTime will expand to an additional 34 markets by the end of May, bringing the total number of markets to 124.

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