Zillow Revenue Grows 22% in 2020

Zillow Group announced fourth-quarter 2020 revenue of $789 million on Wednesday, easily beating Wall Street estimates.

Despite what Zillow officials called a “challenging” first half due to the impact of COVID-19 on the economy, the $789 million represents consolidated revenue growth of 22% over 2019.

It also posted earnings before interest, taxes, depreciation and amortization (EBITDA) of $170 million in the fourth quarter, better than Wall Street’s estimate of $125 million. For the year 2020, Zillow posted $343 million in EBIDTA.

All of this pushed Zillow into the dark during the fourth quarter. The company’s net profit was $46 million in the fourth quarter, well above the $101 million loss suffered in the fourth quarter of 2019. It was the second consecutive quarter that Zillow was profitable.

Online traffic hit record highs, with 201 million average monthly unique users reported in Q4 2020 — the most unique users Zillow has ever had in the fourth quarter of a year, officials said — and 2.2 billion visits.

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For 2020, Zillow saw 9.6 billion visits, up 19% from the prior year.

Zillow also announced that it had agreed to pay $500 million to acquire ShowingTime, which makes software that allows potential buyers to arrange showings with agents.

The Seattle-based company, which has shifted primarily from selling advertising to real estate agents to iBuying, acquired 1,789 homes in the fourth quarter. It was just two more homes than they had acquired a year prior, just before COVID-19-related closures froze the business in place.

In a letter to shareholders, Zillow CEO and co-founder Rich Barton and CFO Allen Parker said the company also expects a strong first quarter of 2021.

“Looking ahead, our economists at Zillow have made bold predictions for an even stronger housing market in 2021 than what we experienced in 2020,” the letter said. “They expect the number of home sales to rise 21% for the year, along with double-digit home price appreciation.”

Year-over-year, Zillow’s IMT segment revenue grew 33% to $424 million, residential segment revenue brought in $304 million (a pace in the fourth quarter of 2019), and Mortgage segment revenues increased 190% to $61 million. Cash and investments reached $3.9 billion at the end of the fourth quarter, compared to $3.8 billion at the end of the third quarter.

According to the Zillow Home Value Index, the company expects seasonally-adjusted home values ​​to increase 3.7% from the end of December 2020 through March 2021, and 10.5% through March 2021. December 2021. It also forecasts that home value appreciation will peak in June 2021 at 13.5%.

The seasonally adjusted annualized rate of existing home sales in November 2020 was 6.69 million, up 25.8% from November 2019, according to Jeff Tucker, chief economist at Zillow. Officials expect that rate to remain high – above 6.65 million – through 2021.

“Our bullish outlook for home sales and values ​​is driven by the current strength in the home buying market and our expectation that low mortgage rates, demographic tailwinds and an improving economy will continue to support market competition,” Tucker said.

Expect more technological advancements for the company in the new year, the letter to shareholders says.

“We connect services together for our customers and use our low customer acquisition cost across multiple products to compete against an industry of largely single-point solution providers with high customer acquisition costs,” it reads. .

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