Zillow sees big revenue boost as it continues to beat expectations 

Once again, Zillow outperformed expectations as several of its residential products provided serious revenue growth in the third quarter.

The company saw a 17% year-over-year jump in revenue, which, at $581 million, also beat market expectations by about $25 million. Even with the double-digit gains, the company posted a net loss, though it was an improvement over the same period in 2023.

In a phone interview with Real Estate News, Zillow CEO Jeremy Wacksman highlighted better-than-expected revenue increases in residential (up 12% year-over-year), rentals (up 24% year-over-year) and mortgages (up 63% year-over-year).

Asked how the new presidential administration might impact Zillow and the industry, Wacksman said the company will continue to focus on addressing the challenges of housing affordability and availability by working with government administrations at all levels — local, state and federal.

"So for us it's about working on product, working on policy and working on advocacy around those issues," Wacksman said. "They're not going to magically get better tomorrow, and there are things we all have to work on together."

Zillow's stock jumped after its earnings report, rising more than $7 a share to around $62 in the first two hours of after-hours trading.

What Zillow had to say

During a call with investors, Zillow leaders noted that they've seen little change to agent commissions since the National Association of Realtors policy changes went into effect on Aug. 17. CFO Jeremy Hofmann said that commission fees for Premier Agents have remained in a "tight band" because clients are willing to pay for upper-tier agent services, including the new technology the company has provided.

When asked about rising mortgage rates, Wacksman said Zillow's growth is not tied to rates, but to the company's "enhanced market strategy."

"It's driven by helping convert more Zillow customers into transactions and helping them line up with a great agent partner," he added. "So we're really fortunate, I think, that we've been able to grow through a really challenging housing market these past couple years, and we expect to continue."

Executives also addressed the future of the Clear Cooperation Policy, which has been a hot topic in recent months.

Wacksman reiterated his stance that the policy should be strengthened, not eliminated, arguing that private listing networks are not good for either buyers or sellers.

"It's more about the consumer good for the industry. The U.S. real estate market is the most transparent market in the world because of policies like this," Wacksman said.

Key numbers

Revenue: $581 million for the quarter, which was up 17% year-over-year and above the outlook range by $25 million.

Cash and investments: $2.2 billion, down from $2.6 billion at the end of Q2 2024. 

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $127 million in Q3, representing 22% of total revenue and up $20 million from a year ago. The company said it was due to higher-than-expected residential revenue.

Net income/loss: A net loss of $20 million in Q3, which was an improvement from the $28 million loss a year ago.

Traffic and visits: Traffic across all Zillow Group websites and apps totaled 233 million average monthly unique users, up 1% year-over-year, the company said. Total visits were 2.4 billion in Q3, which increased 3% year-over-year. 

Notable moves

Zillow announced last month that it had acquired Virtual Staging AI, which allows agents to digitally stage a listing with virtual images. 

Zillow also recently began adding climate tools to its listings with the goal of helping home shoppers who are more likely to consider climate risks when making a purchase.