Zillow Group capped off a “tumultuously remarkable” year with a fourth quarter earnings report that exceeded estimates as the company’s “Zillow 2.0” shift continues.
The Seattle tech giant posted record revenue of $943.9 million, up 158 percent year-over-year and well ahead of the $810 million expected by analysts. The company reported a non-GAAP loss of $0.26, which beat expectations of -$0.30.
Shares were up more than 9 percent in after-hours trading.
The revenue growth was driven in part by the company’s new business of buying and selling homes, a strategy that rolled out last year.
Zillow’s “Homes” segment brought in $603.2 million in revenue, up 52 percent from the third quarter, and took a net non-GAAP loss of $82.5 million. The company sold 1,902 homes and purchased 1,787 homes, ending the quarter with 2,707 homes on its balance sheet.
“In all, I’d characterize 2019 as tumultuously remarkable,” Zillow CEO and co-founder Rich Barton said in a statement. “We’re in the midst of a multi-year expansion to rewire real estate transactions and streamline how our customers buy, sell, rent and borrow that dramatically expands our market opportunity and profit potential. Our team’s strong execution delivered record Q4 and full year results that beat our outlook on every measure.”
Barton returned to the CEO seat this past February, when Zillow announced its surprising pivot.
The company is betting its future on directly buying and selling homes, and it is rapidly expanding the service across the U.S. Zillow Offers, the service that lets customers go online to request cash offers directly from Zillow, expanded to three markets this quarter and is now live in 23 markets.
Zillow Offers has high expectations. Zillow projected last year that the business could bring $20 billion in annual revenue on its own in three to five years while buying up 5,000 homes per month.
The company on Wednesday also unveiled a new mission and internal expanded values “to reflect our operational expansion toward transactions.”
Zillow’s cross-town rival Redfin beat analyst expectations last quarter powered by its own home-buying business, Redfin Now.
Zillow’s Premier Agent business saw revenue rise 6 percent to $233 million, helping fuel the company’s Homes push. Zillow said its “core Premier Agent market-based pricing model has returned to healthy growth.”
“We ended 2019 in a much stronger position than we started,” Barton and CFO Allen Parker wrote in a letter to shareholders. “The past year has been transformational for our company as we began a multi-year journey to replatform real estate in favor of our customers. Our results reflect a sound strategy, operational discipline, and are driven by the hard work of our entire Zillow Group team.
“Movers increasingly expect a tech-enabled, seamless real estate transaction experience, and we are proving we are best positioned to deliver it directly and in combination with our Premier Agent partners. The concept of trading in your home is one that is starting to be realized by Zillow customers in key markets around the country.”