After the market close on Tuesday the online real-estate company posted earnings of 4 cents per diluted share, beating analysts' expectations of a loss of 2 cents per share.
Revenue came in at $224.59 million, above Wall Street's expected $221.86 million. Additionally, Zillow increased its 2016 fourth-quarter revenue outlook to between $218 million and $223 million.
"This was a great quarter. Revenue up 35% year-over-year, we did $60 million of EBITDA, consensus was $50 million. We raised full-year outlook, and things are going very well," Zillow CEO Spencer Rascoff said during Wednesday morning's "Squawk Alley" on CNBC.
The benefits of Zillow's audience scale are beginning to yield positive results, he noted.
"We acquired Trulia a couple of years ago, and now all of our brands have between two-thirds and three-quarters of all home shoppers," Rascoff stated.
Rascoff also tackled concerns of supply in the current housing market.
"We have 6% fewer homes today than we did a year ago, and about half of home buyers don't get the first home they bid on," he added.
What remedies that is a "slow-and-steady" price appreciation that pulls homes out of negative equity, he explained.
About 12% of all of Zillow's listed homes have mortgages with negative equity, Rascoff said. Homeowners consequently can't list the property, but negative equity decreases as home values appreciate.