Zillow Posts Record Q2 Revenue Of $46.9M, But EPS Drops To $0.30 Loss, Traffic Up 66% YOY

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Online real-estate database Zillow has announced its earnings for its second financial quarter of 2013. The company, which saw its stock soar over the last few months, reported record revenue of $46.9 million, but a massive loss per share of $0.30 compared to the $0.05 loss it posted in the last quarter. The Wall Street estimate was that Zillow would post revenue of around $44.42 million and a GAAP EPS of -$0.40.

Update: A Zillow spokesperson clarified that on a GAAP basis, the Street estimate was $0.40, so based on this data, the company beat by $0.10.

Last quarter, Zillow reported revenue of $39 million and an EPS of $0.06. In the year-ago quarter, the company reported revenue of $27.8 million.

The main reason for Zillow’s loss per share is due to its large increase in spending on marketing and sales (up from $12.153 million three months ago to $32.924 million this), as our own Alex Wilhelm points out. The company also almost doubled its expenses on technology and development.

The company’s audience — an important metric for Zillow — grew to 61 million unique users on mobile and web in July 2013. That’s an increase of 66 percent year-over-year. On mobile devices, monthly uniques doubled over the last 12 months.

zillow_q2-2012

“The second quarter was a tremendous one for Zillow as our focus and investments delivered record revenue, traffic and Premier Agent growth,” said Spencer Rascoff, CEO of Zillow, in a statement today. “We’re executing to the long game and making great progress against our strategic priorities to grow audience and gain market share, grow our Premier Agent business, and grow our emerging marketplaces. We’ve seen substantial audience growth with another record traffic month in July with more than 61 million unique users on mobile and Web, and we added a record number of Premier Agent subscribers during the quarter. Also, our emerging marketplaces are taking flight as Mortgages Revenue more than doubled in the quarter compared to last year, and we’re beginning to test monetization in our growing Rentals Marketplace.”

Last week, Zillow’s closest publicly traded competitor Trulia posted record earnings for its last financial quarter, so a lot of analysts will be looking at Zillow’s numbers today as an indicator of how the online real estate market is doing. After Trulia posted its earnings, quite a few analysts believed that Zillow would surprise them, too.

Here are the highlights from today’s report:

  • Revenue increased 69 percent to a record $46.9 million from $27.8 million in the second quarter of 2012.
  • Marketplace Revenue increased 86 percent to a record $36.5 million from $19.6 million in the second quarter of 2012.
  • Real Estate Revenue grew 80 percent to $30.6 million from $17 million in the second quarter of 2012.
  • Mortgages Revenue grew 126 percent to $5.8 million from $2.6 million in the second quarter of 2012.
  • Display Revenue increased 29 percent to $10.5 million from $8.1 million in the second quarter of 2012.
  • Due primarily to a non-recurring acceleration of share-based compensation expense of $7.1 million relating to a prior acquisition and a previously announced increase in marketing and advertising expenses, GAAP net loss was $10.2 million in the second quarter of 2013, compared to GAAP net income of $1.3 million in the second quarter of 2012.
  • Adjusted EBITDA was $5.3 million, or 11 percent of revenue, compared to $5.3 million in the second quarter of 2012, or 19 percent of revenue, due primarily to an exceptionally strong quarter for Display Revenue, better than anticipated Marketplace Revenue, and high operating leverage in our model.
  • Basic and diluted loss per share was $0.30, compared to basic and diluted earnings per share of $0.05 and $0.04, respectively, in the same period last year.