Zillow Group exceeded the company's outlook for revenue and adjusted EBITDA in its Q1 filings released yesterday.
Highlights include:
Rich Barton, co-founder and CEO at Zillow, said:
"Zillow’s strong revenue numbers across the business helped us once again meaningfully outperform the residential real estate industry as we continue to execute on our growth strategy and expand the breadth and depth of market coverage for the housing super app experience in 2024.
"We’ve organically amassed and maintained a large, engaged audience and strong brand, and we’ve been investing heavily in software to digitize and integrate the end-to-end moving transaction for consumers, their agents, and their loan officers."
Despite a slight increase in net losses, it's pretty much solid progress across the board for Zillow after recording nice growth in each of its segments: residential, rentals, and mortgages.
Residential revenues continue to make up the bulk of Zillow's income, with $393 million representing a nice 9% revenue increase YoY.
Rentals revenues of $97 million increased 31% YoY, driven primarily by multifamily revenue.
The firm will also be delighted to dive further into the transaction with mortgages in particular, which broke through the $30 million glass ceiling for the first time since 2022:
The mortgage revenues will be particularly pleasing given the news that buyer commissions are set to be eliminated in the US this summer, which will therefore strike off an entire revenue stream for Zillow, which makes money by taking a slice of the very buyer commissions that are set to be outlawed in July.
Zillow also used the opportunity to brag about its market leadership through web visits, with over two billion for the quarter. According to the shareholder letter sent out alongside the financial results statement:
"Zillow is searched more on Google than the category term 'real estate' and three times more than the next brand in the category."
Meanwhile, Zillow has outlined its growth strategy to penetrate more so-called Enhanced Markets and double revenue from transactions by the end of 2025:
"Since 2022, we’ve been building the integrated transaction experience and testing it in Enhanced Markets.
"Now, we are pressing on the accelerator—to increase our breadth of coverage across more markets and our depth of penetration in those markets—driving toward sustainable, profitable growth. Our for-sale growth pillars mark the pathway to meeting our goals to grow customer transaction share from 3% to 6% by the end of 2025.
"We’re pleased to share that Real Time Touring is expanding to an additional 34 markets by the end of May, which will bring us to a total of 124 markets.
"Zillow Home Loans continues to see double-digit adoption rates, which contributes to growing revenue per customer transaction year over year. We’re pleased to share that this month we are expanding to a total of 19 Enhanced Markets and are on track to reach our target of 40 Enhanced Markets by the end of 2024."
Meanwhile, COO Jeremy Wacksman recently revealed that Zillow's AVM Zestimate has decreased its error rate from 10% at the time of launch (in 2006) to just 2% today.