Loading...
01/10 16:56
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with Q2 revenue up 13% YoY, exceeding expectations, and a 23% EBITDA margin. Despite a net loss, the company's financial health is supported by significant cash reserves and share repurchases. Positive developments include growth in rentals and mortgages, and a strategic focus on Enhanced Markets. The Q&A section shows management's confidence in navigating challenges and leveraging industry changes. The optimistic guidance and share repurchase plan suggest a positive stock price movement over the next two weeks.
Q2 Revenue $572 million, up 13% year-over-year, exceeding expectations due to strong performance across all revenue categories.
Residential Revenue $409 million, up 8% year-over-year, driven by investments in top and mid-funnel experiences that improved connection and conversion rates.
Rentals Revenue $117 million, up 29% year-over-year, primarily driven by multifamily revenue growth of 44% year-over-year.
Mortgages Revenue $34 million, up 42% year-over-year, with purchase loan origination volume growing 125% year-over-year.
EBITDA $134 million, resulting in a 23% EBITDA margin, a year-over-year margin expansion of more than 100 basis points due to revenue outperformance and effective cost management.
Net Loss $17 million, representing 3% of revenue.
Cash and Investments $2.6 billion, down from $2.9 billion at the end of Q1, due to share repurchases and convertible note repurchases.
Outstanding Convertible Debt $1.5 billion, with $608 million due in September 2024 and $419 million due in May 2025.
Net Cash and Investments Balance $1.1 billion after backing out convertible debt, providing financial flexibility.
Zillow Showcase: Zillow Showcase is a unique offering that enhances the selling experience, allowing homes to sell faster and for more money, typically 2% more than similar non-Showcase listings.
BuyAbility: A new feature that provides buyers with personalized, real-time estimates of home prices and monthly payments, enhancing customer engagement.
Real Time Touring: Integration of touring solutions into the buyer flow, improving connections with high-intent customers.
Enhanced Markets Expansion: Zillow is expanding its Enhanced Markets from 19 to 36 by the end of August 2024, aiming for 40 by the end of 2024.
Multifamily Properties: Zillow has increased its multifamily properties to 44,000, up from 40,000, representing a 38% year-over-year growth.
Revenue Growth: Q2 revenue was $572 million, up 13% year-over-year, outperforming the residential real estate industry.
Cost Management: The leadership team has maintained cost discipline, resulting in a 23% EBITDA margin, a year-over-year margin expansion of over 100 basis points.
Leadership Change: Jeremy Wacksman has been promoted to CEO, with Rich Barton transitioning to Co-executive Chair.
Diversification of Revenue Streams: Zillow is diversifying its revenue through rentals and mortgage opportunities, with rentals now accounting for 20% of total revenue.
Competitive Pressures: Zillow faces ongoing competitive pressures in the residential real estate market, particularly as the industry continues to recover from pandemic dislocation. The company has noted that the total purchase loan origination volume for mortgage buyers is down mid-single digits year-over-year, indicating a challenging environment.
Regulatory Issues: The company is navigating industry rule changes that impact the real estate market, which could affect their operations and customer engagement.
Supply Chain Challenges: Zillow is working to integrate its services and products effectively, which involves managing relationships with various partners and ensuring that their offerings meet market demands.
Economic Factors: The current mortgage rate environment remains challenging, impacting overall industry performance and consumer behavior in the housing market.
Debt Management: Zillow has $1.5 billion of outstanding convertible debt, with significant amounts due in the near future, which poses a financial risk if not managed properly.
Market Expansion Risks: As Zillow expands its Enhanced Markets, there is a risk associated with the execution of their growth strategy and the ability to achieve their target of 40 Enhanced Markets by the end of 2024.
Revenue Growth: Q2 revenue was $572 million, up 13% year-over-year, marking the eighth consecutive quarter of outperformance against the residential real estate industry.
Rentals Revenue: Rentals revenue grew 29% year-over-year to $117 million, with multifamily revenue up 44% year-over-year.
Mortgages Growth: Mortgages revenue grew 42% year-over-year to $34 million, with purchase mortgage origination volume increasing 125% year-over-year.
Enhanced Markets Expansion: Zillow is expanding its Enhanced Markets from 19 to 36 by the end of August 2024, aiming for 40 by the end of 2024.
Zillow Showcase: Zillow Showcase listings are expected to capture 5% to 10% of new listings, representing a $150 million to $300 million annual revenue opportunity.
Cost Management: The leadership team has maintained cost discipline, resulting in improved EBITDA margins.
Q3 Revenue Outlook: Expect residential revenue between $375 million and $385 million, with total revenue between $545 million and $560 million.
Q3 EBITDA Outlook: Expect EBITDA between $95 million and $110 million, equating to a 19% margin at the midpoint.
2024 Revenue Growth: Expect to drive double-digit revenue growth for 2024 with modest EBITDA margin expansion.
Annual Fixed-Cost Run-Rate: Approximately $1 billion, consistent with the end of 2023.
Advertising Spend: Advertising spend will be adjusted based on growth opportunities, particularly in the rentals marketplace.
Share Repurchase: In Q2, Zillow repurchased $292 million of its shares at a weighted average price of roughly $42.
The earnings call reveals strong financial performance with 13% YoY revenue growth, a 26% EBITDA margin, and a $1 billion share repurchase authorization. Despite macroeconomic challenges and competitive pressures, Zillow's strategic partnerships and marketplace strategy drive growth, particularly in Rentals. While management was vague on some Q2 forecasts, the overall sentiment is positive, bolstered by the company's substantial share repurchase plan and revenue growth exceeding industry averages. The lack of clear guidance on some issues is a minor concern but doesn't overshadow the strong financials and strategic initiatives.
The earnings call highlights strong financial performance with Q2 revenue up 13% YoY, exceeding expectations, and a 23% EBITDA margin. Despite a net loss, the company's financial health is supported by significant cash reserves and share repurchases. Positive developments include growth in rentals and mortgages, and a strategic focus on Enhanced Markets. The Q&A section shows management's confidence in navigating challenges and leveraging industry changes. The optimistic guidance and share repurchase plan suggest a positive stock price movement over the next two weeks.
The strong financial performance, including 13% revenue growth and a 31% increase in Rentals revenue, indicates a robust business trajectory. The Q&A section highlights confidence in future growth, driven by enhanced markets and strategic initiatives like Listing Showcase and touring expansion. Despite some concerns about first-time homebuyers, the overall sentiment remains optimistic, supported by effective cost management and a positive outlook for Rentals. The lack of specific guidance details slightly tempers the rating, but the overall market reaction is likely positive, within 2% to 8%.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
