Zillow Group releases its second quarter 2019 financial report

August 8, 2019
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Results Reflect Significant Momentum in Homes Segment; Stabilization in Premier Agent Business

Zillow Group, Inc., which is transforming how people buy, sell, rent, and finance homes, today announced its consolidated financial results for the three months ended June 30, 2019. The company reported 84% year-over-year growth in total consolidated quarterly revenue, driven by demand for Zillow Offers as the company continues to accelerate growth into new markets.

Complete financial results and outlook can be found in the investor relations section of Zillow Group’s website.

“Our second quarter results reflect the momentum we are seeing across our businesses,” said Rich Barton, Co-Founder and CEO of Zillow Group, Inc. “The demand signal for Zillow Offers is incredibly impressive as seen in the annualized revenue run rate going from zero to $1 billion in just a year1. Our Premier Agent business is performing well, and our partnerships with the highest performing and most client-focused agents position us well to deliver a truly seamless transaction experience for home buyers and sellers. We’re in the early stages of a bold expansion of our company that opens up exciting opportunities for our customers, partners, shareholders and employees. We are uniquely advantaged by our brand awareness, audience size, technology, data science, industry partnerships, and operational know-how and are well on our way to rewire real estate.”

Recent highlights include:

  • Total Q2 consolidated revenue grew 84% year over year to $599.6 million, driven primarily by significant growth in the Homes segment. 
  • Consumer awareness and demand for Zillow Offers is growing rapidly. More than 69,000 homeowners requested an offer from Zillow to purchase their home during Q2, up 94% sequentially from Q1.
  • The addition of seven Zillow Offers markets since the end of Q1: Dallas-Fort Worth; Minneapolis; Orlando; Portland, Ore.; Nashville, Tenn.; and Colorado Springs and Fort Collins, Colo.
  • Today, the company separately announced four new Zillow Offers markets expected to open in early to mid-2020: Cincinnati, Tucson, Ariz.; Oklahoma City, and Jacksonville, Fla.
  • Expanded testing of the Flex monetization model, which allows Premier Agents to pay a success fee only when they close a transaction with a consumer lead, in lieu of paying for advertising up front.
  • Traffic to Zillow Group’s mobile apps and websites accelerated with more than 194 million average monthly unique users in Q2, an increase of 4% year over year, while visits reached a new high of nearly 2.2 billion, up 14% year over year.

 1 Homes segment annualized revenue run rate is calculated by multiplying Homes segment revenue for the quarter by four.

Second Quarter 2019 Financial Highlights

The following table sets forth Zillow Group’s financial highlights for the periods presented (in thousands, unaudited):

 
  Three Months Ended   2018 to 2019 
% Change
  Six Months Ended   2018 to 2019  
% Change
  June 30,     June 30,  
    2019       2018         2019       2018    
Revenue:                                          
IMT segment:                                          
Premier Agent $ 231,961     $ 230,885     %   $ 449,696     $ 444,617     1 %
Rentals   42,670       33,288     28 %     80,508       62,351     29 %
Other (1)   49,038       41,768     17 %     91,737       79,829     15 %
Total IMT segment revenue   323,669       305,941     6 %     621,941       586,797     6 %
Homes segment   248,924       -     N/A     377,396       -     N/A
Mortgages segment   26,985       19,305     40 %     54,345       38,328     42 %
Total revenue $ 599,578     $ 325,246     84 %   $ 1,053,682     $ 625,125     69 %
Other Financial Data:                                          
Segment income (loss) before income taxes:                                          
IMT segment $ 13,238     $ 110           $ 1,786     $ (6,506 )      
Homes segment $ (71,122 )   $ (10,061 )         $ (116,327 )   $ (14,451 )      
Mortgages segment $ (10,438 )   $ 356           $ (20,054 )   $ (2 )      
Net loss $ (71,977 )   $ (3,093 )         $ (139,502 )   $ (21,684 )      
Adjusted EBITDA (2):                                          
IMT segment $ 64,055     $ 59,718           $ 125,102     $ 106,401        
Homes segment   (56,452 )     (8,352 )           (90,976 )     (11,865 )      
Mortgages segment   (5,306 )     4,634             (7,907 )     7,774        
Total Adjusted EBITDA $ 2,297     $ 56,000           $ 26,219     $ 102,310        
Percentage of Revenue:                                          
Segment income (loss) before income taxes:                                          
IMT segment   4 %     %           %     (1 )%      
Homes segment   (29 )%     N/A            (31 )%     N/A       
Mortgages segment   (39 )%     2 %           (37 )%     %      
Net loss   (12 )%     (1 )%           (13 )%     (3 )%      
Adjusted EBITDA:                                          
IMT segment   20 %     20 %           20 %     18 %      
Homes segment   (23 )%     N/A            (24 )%     N/A       
Mortgages segment   (20 )%     24 %           (15 )%     20 %      
Total Adjusted EBITDA   %     17 %           2 %     16 %      
                                           
(1) Other revenue primarily includes revenue generated by new construction and display, as well as revenue from the sale of various other marketing and business products and services to real estate professionals.
(2) Adjusted EBITDA is a non-GAAP financial measure; it is not calculated or presented in accordance with U.S. generally accepted accounting principles, or GAAP. See below for more information regarding our presentation of Adjusted EBITDA, including a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net loss on a consolidated basis and income (loss) before income taxes for each segment, for each of the periods presented.
 

SOURCE Zillow Group, Inc.

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August 8, 2019

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