Rich Barton at the Zillow Premier Agent Forum. (Geekwire Photo / Kevin Lisota)
Zillow Group Q1 earnings: The Seattle real estate giant beat expectations with $1.2 billion in revenue, up 8%, and earnings per share of $0.47. Analysts expected revenue of $1.1 billion and EPS of $0.25.
Zillow continues to benefit from a strong U.S. housing market amid the pandemic driven by low mortgage rates and limited supply of homes. Median home sale prices were up 20% year-over-year for the week ending April 25, while days on market for sold homes hit record lows, according to the latest data from Redfin.
“Looking forward, we believe the tailwinds we have been talking about — from the Great Reshuffling and the offline-to-online technology migration, to positive demographic trends and pent-up demand for housing post-pandemic — are supportive of housing in 2021 and over the long term,” Zillow CEO Rich Barton wrote in a shareholders letter.
Business unit results:
Premier Agent: The company’s IMT segment, which includes its Premier Agent business that connects realtors to consumers, grew revenue by 35% to $446 million. Rentals revenue was up 46%.
Mortgages: Revenue spiked 169% to $68 million. Mortgage origination volume was up 8X.
Zillow Offers: The company’s home-buying segment brought in $704 million in revenue, down 9%, with a loss of $58.5 million, down from $98 million. Zillow bought 1,856 homes and sold 1,965 homes as it continues to accelerate activity following a pandemic pause. It ended Q1 with 1,422 homes in inventory. Zillow recently began using its Zestimate tool to make cash offers on homes.
Traffic: The company’s apps and websites drew 221 million average monthly unique users, up 15%, and 2.5 billion visits, up 19%.
Stock: Shares of Zillow skyrocketed after March 2020 and reached all-time highs in February, but have fallen around 40% since then. The stock was up 3% in after-hours trading Tuesday.
More from Barton: Zillow is reorganizing its structure to focus more on a customer’s holistic needs — they may need an agent, then a mortgage, then a Zillow Offers bid to sell their home, for example.
“Across the country, Millennials are moving up, Baby Boomers are downsizing, and in between, people of all generations are rethinking their lives in a cultural phenomenon we have termed the Great Reshuffling,” Barton said in a statement. “Millions come to Zillow to surf and dream, and when they are ready to transact, they can get a mortgage from Zillow Home Loans, connect to a Zillow Premier Agent, and may even find an initial offer from Zillow Offers to buy their home for their Zestimate.”