Zillow, Inc. announced financial results for the quarter and full year ended December 31, 2012.
“The fourth quarter was another terrific one as incredible execution by the Zillow team re-accelerated year-over-year growth, and delivered revenue and profit that exceeded our expectations,” said Spencer Rascoff, chief executive officer of Zillow, Inc. “The quarter capped off a pivotal year of tremendous growth and we’re looking forward to 2013 as we focus on three core priorities: attracting more users with great products and services; growing our Premier Agent business with unmatched value and tools; and accelerating our emerging mortgage, rental and home improvement marketplaces.”
Fourth Quarter 2012 Financial Highlights
- Revenue increased 73% to $34.3 million from $19.9 million in the fourth quarter of 2011. Total revenue showed re-accelerating year-over-year growth when compared to year-over-year growth of 67% in the third quarter.
- Marketplace Revenue increased 95% to $26.8 million from $13.7 million in the fourth quarter of 2011. Zillow achieved record Marketplace Revenue while executing a pricing model transition in the Premier Agent business.
- Display Revenue increased 22% to $7.5 million from $6.1 million in the fourth quarter of 2011.
- Net income was $0.5 million, compared to net income of $0.9 million in the fourth quarter of 2011. The fourth quarter of 2012 results include a year-over-year increase in depreciation and amortization expense, and share-based compensation expense, primarily related to acquisitions.
- Basic and diluted earnings per share were $0.02, compared to basic and diluted earnings per share of $0.03 in the same period last year.
- Adjusted EBITDA was $6.8 million, or 20% of revenue, which was an increase from $3.3 million in the fourth quarter of 2011, or 17% of revenue.
Full Year 2012 Financial Highlights
- Revenue increased 77% to $116.9 million from $66.1 million in 2011.
- Marketplace Revenue increased 105% to $86.7 million from $42.2 million in 2011.
- Display Revenue increased 26% to $30.2 million from $23.9 million in 2011.
- Net income was $5.9 million, compared to net income of $1.1 million in 2011. Included in the full year financial results for 2012 is approximately $1.1 million of acquisition-related transaction costs, compared to 2011 transaction costs of $0.4 million.
- Basic and diluted earnings per share were $0.20 and $0.18, respectively, compared to basic and diluted earnings per share of zero for the same period last year.
- Adjusted EBITDA was $25.2 million, or 22% of revenue, which was an increase from $11.9 million in 2011, or 18% of revenue.
Operating and Business Highlights
- Average monthly unique users grew 47% to 34.5 million in the fourth quarter of 2012 compared to 23.5 million average monthly unique users for the same period in 2011. In addition, January 2013 was a record traffic month with 45.9 million unique users, representing 45% year-over-year growth. In December, the company crossed another mobile milestone as more than half of the visits occurred on mobile devices. On weekends, 60% of Zillow’s traffic comes from a mobile device.
- Premier Agent subscribers increased by 2,770 in the fourth quarter of 2012, and totaled 29,473 on December 31, 2012, up 87% year over year. Average monthly revenue per subscriber in the fourth quarter of 2012 increased 3% to $267, compared to $258 in the same period last year. Premier Agent revenue is reported as part of Marketplace Revenue.
- Zillow entered the home improvement market earlier this month with the launch of Zillow Digs™, on the Web at www.zillow.com/digs and on iPad®, as an important complement to the company’s existing real estate, mortgage and rental marketplaces. Expanding into home improvement makes Zillow more relevant to consumers throughout the entire lifecycle of homeownership and expands its total addressable market, as the home improvement industry was expected to spend approximately $6 billion on advertising in 20121. Zillow Digs includes patent-pending Digs Estimates, the estimated costs of recreating actual kitchens and bathrooms.
- In the fourth quarter, Zillow completed three acquisitions that accelerate its mortgage, rental and real estate marketplaces: Mortech, Inc., a Lincoln, Neb.-based software and services company that provides a CRM and pricing engine to the mortgage industry; HotPads™, a San Francisco-based consumer rentals shopping site and suite of mobile apps; and Buyfolio, a New York City-based online and mobile collaborative shopping tool.
- Earlier this month, Zillow announced that HGTV’s FrontDoor is joining the Zillow® Real Estate Network, the leading real estate network. Zillow now will be the exclusive provider of all real estate listings for HGTV’s FrontDoor, giving agents and brokerages that list on Zillow substantial additional marketing for their listings. Scheduled to launch in the second quarter, Zillow Premier Agents also will receive exposure through FrontDoor.
|1 According to Borrell Associates in their 2012 report forecasting the home improvement market.|