Zillow Q3 2024: Strong YoY Revenue Growth But a Small Net Loss for U.S. Portal Giant

American real estate giant Zillow says it exceeded expectations in its Q3 2024 filing released yesterday.

Highlights include:

• Year-on-year revenue growth of 17% to $581 million was above the midpoint of the company's outlook
• Q3 Adjusted EBITDA was $127 million, or 22% of total revenue
• Net losses for the quarter narrowed 28.5% to $20 million, from $28 million in Q3 2023

Jeremy Wacksman, who replaced Rich Barton as Zillow's CEO earlier this year, said:

"Zillow had another strong quarter, with 17% total revenue growth year over year. I’m proud of how we are executing our strategy to serve renters, buyers, sellers, agents and the broader residential real estate industry.

"We continue to invest in tech solutions to build the integrated transaction experience consumers demand and deserve. These investments give Zillow an advantage as we connect high-intent movers with high-performing agents, driving adoption of our services and contributing to increased revenue."

Despite being one of the dominant global forces in real estate marketplaces, Zillow is still operating at a loss and is under pressure to diversify its revenue streams after a major legal settlement earlier this year essentially eliminated the portal's ability to take a slice of buyer agent commissions.

However, net losses of $20 million for the quarter are a drop in the ocean for one of the world's biggest marketplaces, representing just 3% of total revenues.

More importantly, however, is that Zillow's net losses have narrowed while experiencing solid revenue growth in two of its secondary segments:

Despite Zillow's residential revenue dropping slightly in Q3 ($405 million) from Q2 ($409 million), both the Rentals ($123 million, a 24% increase) and Mortgage segments ($39 million, a 63% increase) experienced both quarter-on-quarter and year-on-year growth.

Zillow remains an active innovative force, with no fewer than three headline product and service updates in the past month alone.

In September, Zillow added third-party climate risk data to its sale listings, before adding its 3D home tours onto rival/partner portal Realtor.com in October.

Meanwhile, the portal has closed the acquisition of Virtual Staging AI, which allows sellers, agents, and photographers to create digitally staged listing images without the need for physical furniture and decor. Virtual Staging AI will be integrated into Zillow's Showcase product.