Zillow beats third-quarter expectations, hopes for mortgages

Exactly one year after Zillow saw Huge investment in iBuying implodesthe real estate giant appears to be plowing through the quagmire that is the housing market in 2022. A strong third-quarter earnings report is likely to bolster its core business as executives refocus on mortgages and shows shows the strength of

As Zillow CFO Allen Parker said on a conference call, revenue last quarter was $483 million, beating the company’s expectations and offsetting the impact of rising mortgage rates and affordability issues. not completely escaped. Next quarter earnings will be down 19% for him year over year.

But as many real estate-focused companies dug loopholes this year, Zillow CEO and co-founder Rich Barton continued to hire in the product and technology sectors of the business despite the headwinds. , said it plans to build a mortgage department.

Mr. Burton said on the third quarter conference call.

Zillow shares surged more than 11% in early trading on Thursday.

After abandoning the idea of ​​focusing on iBuying (which also led to a 25% headcount reduction), Zillow continues to rely on the Premier Agent program, which provides the majority of the company’s revenue. This year has been even more challenging, with revenue from Premier Agent only 3% year-to-date, and he’s down only 13% from the third quarter of last year.

“Premier Agent earnings beat both our expectations and the industry’s forecast of a 15% decline,” said Parker. “Higher-than-expected conversion rates, customer connections and retention during the quarter were the main drivers of our slightly higher revenue relative to the industry.”

The company’s mortgage segment posted revenue of $26 million in the quarter, down 63% from $70 million in Q3 2021. Arm, Zillow Home Loans.

Zillow COO Jeremey Wacksman said on the conference call: “That’s why we love the business profile. And like we talk a lot, that’s what customers want. It’s a business problem that we want to solve because it also solves things.They need good agents and they need a mortgage to buy a house.To integrate and digitize it is , is what they want and what they expect from Real Estate 2.0.”

Other focuses include the evolution of ShowingTime, a showing service that Zillow acquired for $500 million last fall, and a “strategic partnership” with OpenDoor as the company steps into the iBuying space.

Briefly mention: Zillow’s The long-term goal of creating a “super app” for housing, It ostensibly integrates all steps of the home search and buying process. Other tech leaders and companies have recently touted the concept of “super apps” in other industries. Elon Musk and Twitter.

Barton clarified that this single, integrated experience that includes buying, selling, financing and leasing remains part of the company’s vision.

“Customers want this super app,” he said. “This is a huge business opportunity, and given Zillow’s brand strength, audience and technology capabilities, we are well positioned to deliver.”

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