Zillow today announced its Q4 2013 earnings. The company booked $58.3 million in revenue (up 70% year-over-year) for a GAAP earnings per share of $0.07 and non-GAAP EPS of $0.20. Net income was $2.7 million.
In the year-ago quarter, Zillow reported earnings of $34.3 million and net income of $500K. For all of 2013, the company reported record revenue of $197.5 million, up 69 percent year-over-year.
The analyst consensus ahead of the earnings was that the company would report revenue of about $56.18 million and earnings per share of $0.07, a 12 percent drop from the year-ago-quarter.
In previous quarters, the company reported record traffic to its site, as well as large growth for its mobile apps. Despite record earnings, however, the increased advertising expenses that drove this traffic meant the company reported a net loss of about $1.2 million in the last quarter. For the full FY2013, Zillow today reported a loss of $12.5 million and once again, the company noted that this was “due primarily to previously announced investment in advertising.” This is pretty much in line with expectations, though, as Zillow has long decided to forgo short-term profit in order to grow its user base.
This time around, Zillow’s traffic once again grew to new record levels – which was surely also driven by the slowly recovering real-estate market. In total, quarterly traffic grew 57 percent year-over-year, to 54.4 million average monthly uniques on mobile and Web.
In January 2013, the company says, it reached a new record with 70 million unique users, and in an interview after the earnings hit, CEO Spencer Rascoff stressed that mobile is now also a large driver of the company’s revenue growth. As for Zillow’s recent emphasis on rentals, Rascoff noted that it’s still a relatively small driver of the company’s revenue right now, but he expect this to grow fast.
“This was a breakaway year for Zillow in which we repeatedly delivered record revenue, traffic, and mobile usage as we significantly grew our market share as the category leader. And we’ve had an incredibly strong start to 2014 with another traffic record of nearly 70 million unique users in January,” said Rascoff in today’s announcement. He also stressed that the site is now significantly larger than any of its competitors and that it will continue to invest in growing its audience rapidly.
Besides reporting its earnings today, Zillow also announced that it is relaunching StreetEasy, the New York City-centric real-estate site it acquired for $50 million in August 2013. The service is getting a complete redesign, but maybe even more importantly, it is moving from its current freemium model to a completely free service. Previously, StreetEasy users had to pay $10 per month for access to advanced search features and information like recorded sales information, property records and real-time email alerts for new properties.
Now, the service is making all of its tools available without the previous paywall. This is pretty much in line with how Zillow itself operates, too, so this move doesn’t come as a major surprise. Rascoff also noted that Zillow considers itself to be a media company, so the more eyeballs it can get on its content, the better it is for its bottom line.
Given StreetEasy’s popularity in the New York market, the company has clearly decided to keep the brand itself going too, similarly to what it’s been doing with Postlets.