Zillow Group’s overall quarterly revenue continues to explode as the company scales Zillow Offers, its direct-to-consumer homebuying and selling platform. The company reported $745.2 million, which more than doubled from last year’s third-quarter revenue of $343.1 million, and a quarterly jump of roughly $150 million.
Zillow’s 117 percent increase in revenue year-over-year led it to beat analyst expectations by nearly $28 million.
While the ballooning revenue can be attributed to the growth of Zillow Offers, so can the company’s widening losses. Zillow posted a net loss of $64 million after posting a $492,000 net loss in the third quarter of 2018.
“Our third-quarter results were strong, demonstrating that Zillow Group’s business model expansion to mechanize real estate transactions is gaining traction as consumer demand reveals people want a better, simpler way to buy, sell, rent and finance homes,” Zillow co-founder and CEO Rich Barton, said in a statement.
“Our core Premier Agent business is strong, with record revenue that exceeded our outlook,” Barton added. “The profitability of our Premier Agent business is foundational to Zillow’s success and is the reason we are able to expand Zillow Offers with such confidence and speed. This quarter’s results illuminate how Zillow Group is in the most favorable position to lead real estate 2.0.”
Zillow Homes — the segment of the business under which Zillow Offers, the company’s homebuying and selling platform, exists — generated $384.6 million revenue, a significant increase from last quarter’s $248.9 million in revenue. That segment of the business operated at a loss of $87 million before income taxes.
In the third quarter of 2019, the company sold 1,211 homes and bought 2,291 homes. More than 80,000 homeowners have requested an offer through the program. Zillow Offers now operates in 21 markets after opening in eight new markets in the third quarter. In the fourth quarter, Zillow plans to take Zillow Offers to Los Angeles.
In the third quarter, Zillow lost, after interest expenses, an average of $4,826 on each home. That number is trending in a negative direction now, after last quarter’s average loss of $2,916 per home, post-interest expenses.
Premier Agent continues to account for a smaller portion of overall revenue, but the segment continues to grow. Revenue for Zillow’s internet, media and technology segment — which is led by Premier Agent — increased 7 percent year-over-year to $335.3 million. The segment posted a net profit of $42.1 million before taxes.
“Retention rose year over year, and both customer and agent satisfaction has improved because of the mechanisms we have put in place over the last year,” Barton wrote in a letter to shareholders. “Demand for leads remained strong, contributing to $240.7 million in Premier Agent revenue, an increase of 3 percent year over year.”
Traffic to Zillow’s website and app reached an all-time high in the third quarter, with monthly users up 5 percent year-over-year to 195.6 million.
Zillow’s mortgage segment grew 40 percent year-over-year to $25.3 million in revenue — although it was slightly lower than its second-quarter revenue. The segment posted a net loss of $12.3 million before taxes.