Investors bid up shares in real estate marketplace Trulia to record highs this week as soaring revenue helped the company cut its losses in the final three months of 2012.
Fourth-quarter revenue was up 75 percent from a year ago, to $20.6 million, helping Trulia trim its net loss to $1.6 million, down 22 percent from the same time a year ago. Trulia posted $564,000 in adjusted earnings before interest, tax, depreciation and amortization (EBITDA), the second consecutive quarter with positive adjusted EBITDA.
For the year as a whole, net losses were up 76 percent to $10.9 million on $68.1 million in revenue, a 77 percent increase from 2011.
Shares in Trulia closed at $30.50 Thursday, up 28 percent from Tuesday’s close before the release of fourth-quarter results. Since Trulia went public on Sept. 20, the San Francisco-based company’s shares have traded for as little as $14.69 and as much as $32.13, a new record high set on Wednesday.
CEO Pete Flint called 2012 "a milestone year" for Trulia.
"We helped a record number of consumers find a great place to live, while connecting over 24,400 subscribers with those transaction-ready consumers," Flint said in a statement. "We finished the year on a resounding note, achieving record quarterly revenue, a rapid increase in mobile traffic, and strong subscriber growth. We are well positioned to grow in 2013 as the real estate market continues its recovery."
Trulia expects to generate $21 million in revenue during the first three months of this year, which would represent 70 percent year-over-year growth compared to a year ago.
In a conference call with investors, Flint said Trulia will be "laser-focused" on adding new subscribers. This represents a shift from upselling existing customers, he said.
Last year, "marketplace" revenue — money coming in from real estate agents who advertise on the portal’s website and mobile ad platforms — made up 67 percent of Trulia’s total revenue. As of Dec. 31, 2012, Trulia has 24,400 agent subscribers, who paid an average monthly sum of $172 each to advertise on the portal.
The other 33 percent of 2012 revenue came from Trulia’s "media" stream, generated from display ads from companies like mortgage lenders and home improvement firms, targeting consumers.
"2012 was the year of mobile for Trulia," Flint said in an earnings call with investors, pointing out that the number of the portal’s mobile apps doubled from seven to 14 in the year.
Unlike Zillow, which doesn’t distinguish between subscriber ads on desktop or mobile, Trulia sells ads for each platform. Trulia Chief Financial Officer Sean Aggarwal said that 4,600 agents now advertise on Trulia’s mobile platform, an offering that launched in May last year. Many of those agents also advertise on Trulia’s website, Aggarwal said.
Trulia mobile advertisers pay about a 15 percent premium for advertising on Trulia’s mobile apps, Aggarwal said, when compared to ads on the Web platform.
However, website ads are becoming valuable, too, as the number of "high-demand" ZIP codes — those with more traffic or higher-priced homes — increase on the site, Flint said. Like Zillow, Trulia sells advertising by geography, using ZIP codes as demarcations.
The number of high-demand ZIP codes on Trulia increased by a couple hundred in 2012, Flint said, to more than 3,000, which is a little more than 10 percent of the ZIP codes active on the portal. Those ZIP codes, where about 20 percent of its subscribers advertise in, accounted for 55 percent of Trulia’s 2012 revenue, Flint said.
In September, Trulia launched the Trulia Mortgage Marketplace, which relies on Mortech Inc. as the sole provider of mortgage pricing information. Zillow acquired Mortech in December, and Flint said Trulia is looking at other mortgage pricing engines.
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