Zillow Pops After Reporting Q1 Financial Results

03:43 05/13/2019

Shares of online real estate database Zillow ZG  were jumping last week after the company reported its quarterly results for the first quarter.

For the quarter, Zillow posted a narrower loss than expected and said that sales creased YOY. The results topped Wall Street's expectations and sent shares flying over 15% after the market close on Thursday.

For the first quarter, Zillow saw a loss of $67.5 million, or 33 cents per share. This was wider than the company’s loss from the year-ago quarter of 10 cents per share but came ini narrower than the Wall Street consensus estimate of a loss of 34 cents per share, according to a survey of analysts conducted by FactSet.

Revenue at 454.1 million for the period was an increase of 39.6% and better than the $432.1 million expected, according to data compiled by FactSet.

Zillow reported that it had bought 898 homes during the period, marking an 80% when compared to its fourth quarter of 2018. The company also sold 414 homes during the first three-month period of 2019, about triple the amount from the previous quarter.

CEO Rich Barton said on the earnings call, 'We are leaning into early success and are accelerating our investment in Zillow Offers. Today we are announcing plans to enter another six markets by the end of Q1 2020, bringing our total announced markets to 20. In Q1 we received more than 35,000 seller request and that demand is rapidly accelerating.'

He added, 'We now receive one request every 2 minutes, which is nearly $200 million in potential transaction value per day. During the quarter, Zillow sold 414 homes and purchased 898 homes, up dramatically from our Q4 transaction volume.'

Barton also said, 'I came back as CEO mid-quarter, and this was the first full quarter for our CFO, Allen Parker. While there has been a lot of change at Zillow Group of late, we're settling into a new rhythm as our leadership changes and market expansion are generating a level of excitement and energy that comes from being a start-up again, but a start-up with 14 years of experience and the size and scale to confidently embark on this new mission to transform the transaction. I'm really proud of the way the team is executing. Despite the bears spying at the empty garbage cans in our backyard, one must only look in the front yard to see something astounding happening.'

'I know we still have much to prove to you before the fog is fully clear on Zillow Offers. We must show you that we are not just buying dollars for $0.95. The unit economics of Zillow Offers are justifiably under the microscope. But even at small start-up scale, the economics show promise.'


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