ZipRealty today reported 2004 fourth-quarter net revenues of $17.5 million, up 89 percent from $9.3 million during the same quarter in 2003. Net income was $900,000, or 1 cent per diluted share, in the fourth quarter, up from $200,000 the previous year.

Net revenues for all of 2004 were $62.3 million, an 84 percent increase from $33.8 million generated in 2003. Net income for 2004 was $3.2 million, which compares to a net loss of $4.6 million in 2003.

The company also announced plans to expand into the Las Vegas market in mid-2005, representing the first market expansion for ZipRealty since 2000 when it entered Chicago. The company currently operates in 12 major metropolitan areas nationwide, and has less than one half of one percentage share of the markets it currently represents, according to chief executive officer Eric Danziger.

“2004 could be characterized as a breakout year for us, as we leveraged the company’s infrastructure and saw our results positively impacted by a variety of strategic initiatives that were implemented,” Danziger said.

ZipRealty had 914 employed realty agents at the end of 2004, up from 440 at the end of 2003.

The company closed 8,500 transactions in 2004, totaling approximately $3 billion in sales volume. That was up from 5,394 transactions in 2003, representing $1.6 billion in sales volume. Average net revenue per transaction increased 17.9 percent in 2004 to $7,147, compared to $6,058 in 2003.

Overall customer satisfaction ratings for the year were the highest in the company’s history, with an overall client satisfaction rating of 94 percent and with 93 percent of closed clients indicating that they would consider recommending ZipRealty to a friend, the company said.

Danziger said he believes the company’s customer satisfaction rating triples the national average. The company’s customer-centric business model, driven by its employee-agent strategy and proprietary technology enables efficiencies in the industry, he added.

“This is an industry I feel that has been built more around the Realtor than the customer,” he said, later adding, “We’re not saying we are an eBay or Amazon but we do think we are an agent of change in the real estate industry, much like eBay and Amazon are agents of change in their industries.”

Zip is a full-service brokerage that rebates part of its sales commission to home buyers and sellers. Zip’s chief financial officer and EVP Gary Beasley said the company has “no plans to modify the rebate model in the near future.”

ZipRealty successfully completed its initial offering of common stock in November 2004, raising $63.3 million of proceeds after underwriting discounts and commissions. As of December 31, 2004, the company had approximately $83.5 million of cash, cash equivalents and short-term investments, $82.3 million of stockholders’ equity, and no long-term debt.

The company expects revenues between $97 million and $102 million for all of 2005, with reported net income expected in the 36 cents to 40 cents per diluted share range. Diluted shares outstanding are expected to average approximately 26.1 million for the year.

For the seasonally slow first quarter of 2005, the company expects revenues of between $17 million and $18 million. Reported net income per diluted share is expected to be between zero and 2 cents. Diluted shares outstanding are expected to average approximately 25.9 million for the quarter.

ZipRealty shares (Nasdaq: ZIPR) traded at $17.68 Thursday, up 4.9 percent from the previous day’s close.


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