Zillow Stock Jumps on Earnings. The Company Beat Expectations in a Slower Housing Market.

The company’s net loss was also narrower than expected, with analysts projecting a net loss of $77 million.

Zillow shares were up 6% in premarket trading Wednesday.

Zillow reported full-year revenue of $1.9 billion, down 1% from the year prior, on a net loss of $158 million. Full-year revenue was about in line with analysts’ expectations, while its net loss was narrower than the $168 million forecast by Wall Street.

“We reported great revenue numbers across the whole of our increasingly diversified and growing business,” Zillow CEO Rich Barton said.

Revenue increased across Zillow’s business segments. In its residential segment, which contains its premier agent lead-generation program and comprises the biggest chunk of the company’s overall sales, revenue grew 3% to $349 million. Its rental revenue increased 37% to $93 million, while its mortgage revenue grew 22% to $22 million, the company said.

Zillow’s results cap off a year in the housing market that was defined by rising mortgage rates, which peaked near 8% in late October, according to Freddie Mac. Existing-home transactions in 2023 fell to the lowest total in nearly 30 years, National Association of Realtors data show, as high housing costs squeezed prospective buyers and some homeowners decided not to sell, reducing home inventory.

Mortgage rates have improved, but headwinds remain. The company expects the total transaction value of existing-home sales will fall from year-ago levels at its midpoint in the first quarter—but that Zillow’s revenue will increase 7% from the year prior, Zillow CFO Jeremy Hofmann said on a conference call.

“Despite the tough macro existing home sales environment, we expect our residential revenue to outperform Industry in Q1 as our growth pillars begin to contribute to revenue and the Investments we have made in our overall funnel continue to deliver benefits,” he said.

Zillow is perhaps best known for its listings platform. The company reported 194 million average monthly unique users of its apps and sites in the fourth quarter, and said in a shareholder presentation that it is searched three times more than Realtor.com, citing Google trends data. (
News Corp,
Barron’s parent company, also owns Move, which runs Realtor.com).

But it is more than that, Barton said on an earnings call.

“Zillow is now the container into which we will continually place new features and services that work together seamlessly to solve real customer and partner pain points,” Barton said.

The company sees opportunity for growth. Zillow captures only $1.5 billion of a total addressable market it calculates at $30 billion, executives said.

“Our position as one of the largest internet brands in the United States, alongside iconic brands such as
Facebook,
Spotify, and
Netflix,
gives us confidence that we have many years of growth into that $30 billion,” Barton said.

Financing, touring, and rentals are among Zillow’s areas of focus, it said in a shareholder letter.

“These growth pillars serve as a roadmap to achieve our goals to grow customer transaction share from 3% to 6% by the end of 2025 and grow our revenue alongside that transaction share growth,” Barton and Hofmann wrote.

For the current quarter, Zillow said it sees revenue coming in between $495 million to $510 million, about in line with what analysts had expected for first-quarter guidance, according to FactSet. The company forecasts earnings before interest, taxes, depreciation, and amortization, or Ebitda, coming in between $95 million to $105 million—shy of Wall Street’s expectation for $112 million, according to FactSet.

Write to Shaina Mishkin at [email protected]