Z
illow's third-quarter revenue surged 17% year-over-year, reaching $581 million and exceeding market expectations by $25 million. The company attributed this growth to strong conversions and agent partnerships across its major divisions. Residential products drove significant revenue increases, with rentals up 24% and mortgages soaring 63%. Despite the double-digit gains, Zillow posted a net loss, though it was an improvement over the same period in 2023.
In a phone interview, CEO Jeremy Wacksman highlighted the company's focus on addressing housing affordability and availability by working with government administrations. He emphasized that these issues won't be resolved overnight and require collective effort from industry stakeholders. Zillow's stock jumped after its earnings report, rising over $7 per share to around $62 in after-hours trading.
During a call with investors, leaders noted that agent commissions have remained relatively stable since the National Association of Realtors policy changes took effect. CFO Jeremy Hofmann attributed this to clients' willingness to pay for upper-tier services, including new technology provided by Zillow. Wacksman also addressed rising mortgage rates, stating that Zillow's growth is driven by its enhanced market strategy and ability to convert customers into transactions.
Executives discussed the future of the Clear Cooperation Policy, with Wacksman reiterating his stance that it should be strengthened, not eliminated. He argued that private listing networks are detrimental to both buyers and sellers, emphasizing the policy's importance in maintaining a transparent real estate market.
Key numbers include:
* Revenue: $581 million for the quarter, up 17% year-over-year
* Cash and investments: $2.2 billion, down from $2.6 billion at the end of Q2 2024
* Adjusted EBITDA: $127 million in Q3, representing 22% of total revenue
* Net income/loss: A net loss of $20 million in Q3, an improvement from the $28 million loss a year ago
* Traffic and visits: 233 million average monthly unique users across Zillow Group websites and apps, up 1% year-over-year
Notable moves include Zillow's acquisition of Virtual Staging AI and its addition of climate tools to listings.
