Zillow delivered strong revenue growth in Q3 while still continuing to operate in the red. It delivered USD 88.6 million in revenue, a 66% increase over the same period in 2013. However, during the same period, it delivered USD 16 million in losses, up from USD 5.5 million in 2013.
On a year to date basis, revenues were tracking at USD 233m, up from USD 139 million for the first 9 months last year. Year to date losses are now USD 33 million, up from USD 15 million in 2013.
As with many companies, Zillow reported an adjusted EBITDA that indicates that the underlying business is actually profitable, delivering an adjusted EBITDA of USD 14 million profit. The adjusted EBITDA takes out share based compensation and also acquisition based costs.
Company guidance for Q4 is that Zillow will delivered USD 89 - 90 million in revenues for the quarter, below analyst expectations. In addition display advertising is slowing. On this news, Zillow closed 3.5% down and following the earnings call, plunged 8% in after market trading well below USD 100.
Third Quarter 2014 Financial Highlights