Zillow Group Inc. reported earnings that beat estimates, as the company’s core business performed better than expected in a depressed US housing market.
(Bloomberg) — Zillow Group Inc. reported earnings that beat estimates, as the company’s core business performed better than expected in a depressed US housing market.
- The online real estate company reported adjusted earnings before interest, taxes, depreciation and amortization of $104 million. Analysts estimated $60 million, the average in a survey compiled by Bloomberg.
Key Insights
- Zillow’s generates the lion’s share of its revenue by connecting real estate agents with prospective homebuyers. Revenue in that business, Premier Agent, fell 16% in the first quarter from a year ago — better than a 27% drop in US transaction volume.
- Traffic to the company’s websites averaged 212 million monthly unique users, in line with the first quarter of 2022, when home sales were still booming.
- Chief Executive Officer Rich Barton has promised to build a “super app” for housing to streamline the process of buying or selling a home. On Tuesday, the company announced an integration with OpenAI’s ChatGPT tool, allowing a select group of users to use conversational language to search for property.
- Real estate agents, who make up Zillow’s largest group of paying customers, have bristled in the past at the company’s efforts to introduce technology into the homebuying process. It’s too early to say how agents will respond as the company increases its use of artificial intelligence.
Market Reaction
- Shares have increased 33% since the beginning of the year through Wednesday’s close.
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