Zillow Group Reports Third Quarter 2016 Results

  • Record Revenue of $224.6 million increased 35% year-over-year, excluding revenue from Market Leader, which was divested in the third quarter of 2015.
  • Marketplace Revenue of $206.9 million increased 45% year-over-year, excluding revenue from Market Leader.
  • Record GAAP net income of $6.8 million increased 126% year-over-year; Adjusted EBITDA of $59.5 million increased 102% year-over-year. 
  • More than 164 million average monthly unique users visited Zillow Group consumer brands Zillow ®, Trulia ®, StreetEasy ®, HotPads ® and Naked Apartments ® during the quarter.
  • Zillow Group captured nearly three quarters of total market share for the mobile-only real estate category.

SEATTLE, Nov. 01, 2016 (GLOBE NEWSWIRE) -- Zillow Group, Inc. (NASDAQ:Z) (NASDAQ:ZG), which houses a portfolio of the largest and most vibrant real estate and home-related brands on mobile and web, today announced its consolidated financial results for the three months ended September 30, 2016.

"Our third-quarter performance was terrific," said Zillow Group CEO Spencer Rascoff. "We delivered another quarter of record revenue, and Adjusted EBITDA exceeded our expectations. Traffic to Zillow Group's mobile apps and websites increased year-over-year and revenue growth in our Premier Agent marketplace accelerated. With all of our marketplaces performing strongly, we expect to end 2016 in a strong position to continue executing on our strategic priorities."

Third Quarter 2016 Financial Highlights
  • Revenue increased 35% to $224.6 million from $165.8 million in the third quarter of 2015, excluding revenue from Market Leader, which was divested in the third quarter of 2015.
    • Marketplace Revenue increased 45% to $206.9 million from $142.3 million in the third quarter of 2015, excluding revenue from Market Leader.
      • Premier Agent Revenue increased 33% to $158.3 million from $119.4 million in the third quarter of 2015.
      • Other Real Estate Revenue 1 increased 182% to $28.8 million from $10.2 million in the third quarter of 2015.
      • Mortgages Revenue increased 57% to $19.8 million from $12.6 million in the third quarter of 2015.
    • Display Revenue decreased 25% to $17.7 million from $23.5 million in the third quarter of 2015. The decrease is primarily a result of the company's strategy to deemphasize display advertising and improve the user experience.
  • Record GAAP net income was $6.8 million, or 3% of Revenue, in the third quarter of 2016, compared to GAAP net loss of $26.0 million, or 15% of Revenue, in the same period last year.
  • Adjusted EBITDA was $59.5 million in the third quarter of 2016, or 26% of Revenue, which was an increase from $29.5 million, or 17% of Revenue, in the third quarter of 2015.

Operating and Business Highlights
  • More than 164 million average monthly unique users visited Zillow Group consumer brands Zillow, Trulia, StreetEasy, HotPads and Naked Apartments during the third quarter of 2016, an increase of 16% year-over-year.
    • Zillow Group's market share in September 2016 was nearly two-thirds of the total online real estate category. 2
    • Zillow Group's mobile-only market share is even larger, capturing nearly three quarters of the category. 2
  • Leads to Zillow Group Premier Agent ® Advertisers for the third quarter of 2016 grew nearly 40% year-over-year to 4.6 million.
  • The Premier Agent marketplace continues to accelerate as top performing agents realize the benefits of advertising on Zillow Group's mobile applications and websites.
    • Total sales to Premier Agent Advertisers who have been customers for more than one year increased 59% year-over-year.
    • Sales to existing Premier Agent Advertisers accounted for 71% of total bookings.
    • Premier Agent Advertisers who spend more than $5,000 per month:
      • Increased 80% year-over-year on a total dollar basis.
      • Increased 79% year-over-year in the number of agent advertisers.

1 Other Real Estate Revenue includes agent services, dotloop, StreetEasy, Naked Apartments, rentals and other offerings to endemic advertisers that are not traditional display advertising.

2 comScore Media Metrix Multi-Platform, September 2016, U.S.

Business Outlook - Fourth Quarter and Full Year 2016

For full year 2016, Zillow Group is raising its Revenue outlook to the range of $837 million to $842 million. The 2016 Revenue outlook represents a 30% year-over-year increase at the midpoint of the guidance range, compared to a 24% increase from 2014 to 2015, on a pro forma basis and excluding revenue from Market Leader, which was divested in 2015. For full year 2016, Zillow Group is raising its Adjusted EBITDA outlook to the range of $136 million to $141 million (excluding the impact of a $130.0 million litigation settlement), which represents 16% of Revenue at the midpoint of the guidance range.

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