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Residential revenue fell 14% year-over-year to $361M, driven primarily by lower Premier Agent revenue as a result of weakness in the overall housing market. Meanwhile, rentals revenue grew 21% to $74M boosted by strong traffic and growth in multifamily properties. Mortgages revenue fell 43% year-over-year to $26M due to higher interest rates that slowed refinance activity and impacted revenue for both the company’s mortgage marketplace and Zillow Home Loans.
“We’re starting to see our investments pay off, with Q1 financial results that outperformed the top end of our outlook,” said CEO Rich Barton.
The company expects Q2/23 revenue in the range of $451M-$479M, compared to the consensus of $456.8M.
BTIG analysts said the beat was driven by ongoing outperformance relative to the housing market.
“While housing market conditions remain uncertain, we think ZG’s relative outperformance is encouraging,” they said in a note.
Wolfe Research analysts remain more cautious on Zillow.
“While we are encouraged by ZG’s product initiatives, we believe NT/MT share performance will be tied to difficult RE macro outlook,” they wrote.
(Additional reporting by Senad Karaahmetovic)
