This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Zillow Plunges as Earnings Fall on Compensation (Update 2)

Updated from 5:47 p.m. EST to clarify earnings announcement.

NEW YORK ( TheStreet) -- Zillow (Z) shares are plunging 9.6% to $82.35 in after-hours trading after the online real estate advertising company posted earnings that beat Wall Street estimates, though compensation expenses rose in the quarter.

Seattle-based Zillow reported a GAAP loss of 30 cents a share on $46.9 million in revenue as Marketplace Revenue rose 86% year-over-year to $36.5 million. Display Revenue increased 29% to $10.5 million from $8.1 million in the second quarter of 2012.

Hindered by $7.1 million in stock-based compensation during the quarter, the company's GAAP net loss was $10.2 million compared to net income of $1.3 million in the second quarter of 2012. The charge was one time item related to an acquisition. Excluding the charge, the company earned 1 cent a share, beating estimates.

Analysts polled by Thomson Reuters were expecting Zillow to report a second-quarter loss of 11 cents a share on $44.41 million in revenue.

The company noted that 61 million monthly unique visitors went on Zillow via mobile devices and desktops, a gain of 66% year over year.

CEO Spencer Rascoff, in a phone interview with The Street, was defiant, choosing to concentrate on the quarter's revenue while discounting the profit loss. Concerning a possible new equity offering, Rascoff said the company had nothing to announce.

"It was a tremendous quarter," Rascoff said. "We crushed revenue, we had record traffic, the highest ever net adds. It's being driven by mobile, where we had 120 homes viewed per second, up from 63 homes a year ago. Now, we're just starting to monetize rental in the past few weeks. We're firing on all cylinders."

Adjusted EBITDA was $5.3 million for the quarter, 11% of revenue, compared to $5.3 million in the year-ago quarter.

In addition to reporting earnings, Zillow is hosting a 30-minute event during which President Obama will answer housing-related questions. Rascoff will moderate the discussion using questions sourced from social media, including Facebook, Twitter, Vine, Instagram and other sites using the hashtag, #AskObamaHousing.

Rascoff said the key themes of the discussion will be reforming the government sponsored entities (GSEs) Fannie Mae and Freddie Mac as well as the impact of rising interest rates and values on home buyers and affordability rates. "There are a lot of questions on local housing dynamics, including negative equity, people being underwater, items like that. The common theme is more of a micro focus, as opposed to macro theme."

During the conference call, CEO Rascoff updated the company's revenue guidance. Zillow now projects 2013 revues to be between $186 million and $188 million, up from a prior outlook between $178 million and 182 million . Full-year EBITDA guidance is staying at $20 million. For the third quarter, Zillow expects revenue to be between $49.5 million and $50.5 million, with EBITDA between $1.5 million and $2 million.

Shares of Zillow closed the regular session higher, gaining 0.73% to close at $90.71.

-- Written by Chris Ciaccia in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
Z $23.98 -3.07%
AAPL $95.03 -2.90%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs