Zillow reported better-than-expected quarterly results, crediting in part the rapid growth of its new home-selling business.
The company’s “Homes” segment, which includes the Zillow Offers program it launched in 2018, generated $603.2 million in revenue, up 57% from the third quarter, as it sold 1,902 homes and purchased 1,787, ending the quarter with 2,707 on its balance sheet.
Overall revenue rose 158% to $943.9 million though Zillow’s loss widened to $101.2 million, or 49 cents per share, from $97.7 million, or 48 cents per share, in the quarter a year earlier as operating expenses increased 120%, reflecting its heavy investment in the Homes business.
The results beat analysts’ estimates of a loss of 57 cents per share and $814.6 million in revenue.
“In all, I’d characterize 2019 as tumultuously remarkable,” Zillow CEO Rich Barton said in a news release, noting that the company was “in the midst of a multi-year expansion to rewire real estate transactions and streamline how our customers buy, sell, rent and borrow that dramatically expands our market opportunity and profit potential.”
“Our team’s strong execution delivered record Q4 and full year results that beat our outlook on every measure,” he added.
The results delivered a boost to Zillow’s shares, which rose 17% to $64.17 on Thursday and another 2.2% to $65.59 on Friday.
Zillow has made a big bet on directly buying and selling homes, setting a goal of $20 billion in revenue in three to five years from the Homes segment.
The Offers service, which allows customers to request cash offers directly from Zillow, expanded from 20 to 23 markets in the fourth quarter, including the addition of Los Angeles — the second largest housing market in the U.S.
“In 2019, we made significant progress toward our vision to deliver a seamless, integrated real estate transaction experience for our customers,” Barton said in a letter to shareholders.
For the first quarter of 2020, Zillow is projecting Homes revenue of between $675 million and $700 million and total revenue of between $1.021 billion and $1.056 billion.
Justin Sullivan/Getty Images