Newly public Zillow swings to first-ever profit
Online real estate marketplace Zillow (Z), which went public last month, marked its first quarter of profitability with net income of $1.6 million in the second quarter, or break even on a per share basis, up from a $1.92 million loss, or 16 cents per share, in the year-ago quarter. Total revenue increased 116% to $15.8 million from $7.3 million in the second quarter of 2010. Seattle-based Zillow, a real estate website with listings and sales data on more than 100 million U.S. homes, soared in its first day of public trading July 20, closing at $35.77, up nearly 79% from its initial offering price of $20 a share. Shares rose about 7% on Wednesday ahead of its first official earnings report. Zillow's revenue growth was driven by marketplace revenue, which includes subscription fees for real estate agents and advertising sold to mortgage lenders. The company said marketplace revenue was up 269% to $9.7 million from $2.6 million in the second quarter of 2010. "The second quarter was outstanding for Zillow with record revenues, traffic and mobile usage. It marks our first profitable quarter on a GAAP net income basis and our fourth consecutive profitable quarter on an adjusted EBITDA basis," said Zillow CEO Spencer Rascoff. "We're extremely pleased with our progress and rapid growth, yet we believe we've only scratched the surface of our opportunity." Average monthly unique users grew 93% to a record 20.8 million in the second quarter of 2011 compared to 10.8 million average monthly unique users for the same period in 2010. July marked another record traffic month with 23.2 million unique users to Zillow's websites and mobile applications, a 98% increase from July 2010, the company said. Zillow estimated revenue of $16 million to $17 million for 3Q during an afternoon earnings call. Still, the company said it is still operating cautiously due to the struggling housing market "Zillow's data still says we haven't bottomed yet (nationwide) and as a result the company is being very cautious," Rascoff told investors during the conference call. Zillow said its premier agent count grew 180% year over year. The firm said it believes the program has a lot more opportunity for growth. The program provides real estate agents with a bundled package that includes "elite agent" status in a ZIP code and a bundle of ad placements. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.