Zillow (Z) posted third quarter revenue of $88.6 million, up 66% from the third quarter of 2013.
The company posted a negative earnings and a net loss in the second quarter of $10.48 million in the second quarter of 2014, driven primarily by sales and marketing expenses that topped $48 million in the quarter.
“The third quarter was another excellent one for Zillow with record revenue, traffic, mobile usage and Premier Agent advertiser revenue in what is turning out to be a transformative year," said Spencer Rascoff, Zillow CEO. "We continue to solidly execute on our strategic priorities for the year, and are experiencing positive momentum throughout all of our home-related marketplaces. We plan to continue to invest heavily in our brand, business and products to fuel our long-term growth and strengthen our leadership position."
Basic and diluted GAAP net loss per share was $0.40 in the third quarter of 2014 compared to basic and diluted GAAP net loss per share of $0.03 in the same period last year.
Aside from its financial performance, Zillow reported Wednesday that it reached a record 86 million average monthly unique users during the third quarter of 2014, up 41% year-over-year. In July, traffic broke an all-time record with nearly 89 million monthly unique users, an increase of 45% year-over-year.
During the third quarter of 2014, visits to Zillow via a mobile device increased 70% year-over-year, and in September 2014, half of a billion homes were viewed on Zillow via a mobile device, which equates to 186 homes per second.
Premier Agent advertisers spent a record amount with Zillow in the third quarter of 2014. Zillow added 4,059 net new Premier Agent advertisers in the third quarter for a total of 60,877 as of September 30, 2014, with average revenue per advertiser reaching a record $349, up from $264 in the same period last year. Premier Agent advertisers who have been on the platform more than 12 months spent 65% more in the third quarter this year than a year ago.
The third quarter of 2014 results include the impact of approximately $0.33 on basic and diluted GAAP net loss per share from acquisition-related costs due to the company's proposed acquisition of Trulia (TRLA).
- Marketplace revenue increased 77% to a record $72.7 million from $41.0 million in the third quarter of 2013
- Real estate revenue grew 86% to a record $65.6 million from $35.3 million in the third quarter of 2013. Premier Agent advertisers spent 87% more in the quarter compared to the same quarter one year ago
- Mortgages revenue grew 24% to $7.1 million from $5.7 million in the third quarter of 2013
- Display revenue increased 30% to $16.0 million from $12.3 million in the third quarter of 2013
Basic non-GAAP net income per share was $0.15 in the third quarter of 2014 compared to basic non-GAAP net loss per share of $0.04 in the same period last year. Diluted non-GAAP net income per share was $0.13 in the third quarter of 2014 compared to diluted non-GAAP net loss per share of $0.04 in the same period last year.
Basic and diluted non-GAAP net income (loss) per share excludes share-based compensation expense, acquisition-related costs, and the 2013 income tax benefit.
Adjusted EBITDA was $14.6 million in the third quarter of 2014, or 17% of revenue, which was an increase from $4.3 million in the third quarter of 2013, or 8% of revenue.
Zillow Mortgages continues to grow despite tightening in the mortgage markets overall. While the Mortgage Bankers Association reported a year-over-year decline in originations of 36%1 during the third quarter, Zillow Mortgages saw loan requests grow 18% year-over-year to approximately 7 million. The vast majority of these requests were for purchase loans, which also include Zillow pre-approval submissions.
In the third quarter, Zillow announced plans to acquire Trulia in a stock-for-stock transaction, which is expected to close in 2015.
In September, Zillow began powering U.S. real estate search for Leju Holdings Limited, which operates one of the largest real estate sites in China, through a co-branded Zillow-Leju site.