Zillow Revenue Up Again in Q4 2023, but Annual Net Loss Persists

In a fourth quarter and full-year 2023 earnings call Feb. 13, Zillow Group basically sang the same song as it did for its Q3 report: solid quarterly revenue of $474 million, 9% higher than a year earlier, but a net loss of $73 million, about the same negative number from Q4 2022. 

Regarding the full-year earnings picture, Zillow reported $1.5 billion in revenue, down 5% compared to 2022. The portal giant also lost $158 million during the year, up from $101 million in 2022.

Nevertheless, Zillow Co-Founder and CEO Rich Barton was upbeat in his remarks.

“We reported great revenue numbers across the whole of our increasingly diversified and growing business,” he said. “This is evidence of the progress we’re making to transform the way people buy, sell, finance and rent homes by continually adding more functionality, software and services to Zillow’s housing super app.

“Our progress in crafting an integrated customer experience in our early markets has given us the confidence to press on the accelerator and expand this experience to more markets in 2024.”

While second-place CoStar continues to nip at its heels, Zillow still remains top dog, as Barton pointed out.

“We have the leading real estate audience and a brand that is a household name, and we have barely scratched the surface on a real estate market with $2 trillion of total transaction value.”

We continue to be the No. 1 most visited rentals platform with average monthly rentals, unique users up double digits year-over-year,” he said. “In Q4, we are well positioned for future rentals revenue growth.”

Barton also referenced residential real estate’s continuing legal problems.

“We’re monitoring the progress of numerous lawsuits facing several organizations within the industry,” he noted. “Zillow is not a named party in these suits, and we are confident in our ability to meaningfully grow our company in this evolving climate. We continue to advocate for what we believe is best for consumers and the industry as a whole. First, we believe in a real estate marketplace that is transparent and fair in which consumers and agents have easy and equitable access to listings and information.

“Second, we believe buyers and sellers deserve independent representation, and finally, we believe consumers should be well-informed on agent compensation and their right to negotiate.”

Zillow’s stock price of $53.88 was down about 3% today.

Q4 highlights include:

  • Zillow Group’s fourth quarter results exceeded the company’s outlook for revenue and Adjusted EBITDA.
  • Q4 revenue was above the midpoint of the company’s outlook range by $31 million. Full-year revenue was $1.9 billion, down 1% year-over-year.
  • On a GAAP basis, net loss was $73 million in Q4, or 15% of revenue, compared to $72 million in Q4 2022, or 17% of revenue, and was $158 million for the full year 2023.
  • Residential revenue was up 3% year-over-year in Q4 to $349 million, outperforming both the residential real estate industry total transaction value decline of 4% and the company’s outlook.
  • Cash and investments at the end of Q4 were $2.8 billion, down from $3.3 billion at the end of Q3.
  • Traffic to Zillow Group’s mobile apps and sites in Q4 was 194 million average monthly unique users, down 2% year-over-year. Visits during Q4 were 2.2 billion, up 1% year-over-year.
  • Rentals revenue of $93 million increased 37% year-over-year, primarily driven by multifamily revenue growing 52% year-over-year in Q4.
  • Mortgage revenue of $22 million increased 22% year-over-year, due primarily to a 105% year-over-year increase in purchase loan origination volume to $487 million in Q4.

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