Please ensure Javascript is enabled for purposes of website accessibility

Zillow Group Revenue Leaps 22% on Strong Premier Agent Growth

By Joe Tenebruso - Updated May 11, 2018 at 10:12AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The online real estate titan is aggressively pursuing a "dramatically under-penetrated" market.

Zillow Group (Z 0.31%) (ZG 0.15%) reported first-quarter results on May 7. The leading online real estate platform is investing heavily in new growth businesses, which is helping to drive revenue sharply higher, albeit with mounting losses.

Zillow Group results: The raw numbers


Q1 2018

Q1 2017

Year-Over-Year Change


$299.9 million

$245.8 million


Net loss

($18.6 million)

($4.6 million)


Net loss per share




Data source: Zillow Group Q1 2018 earnings press release.

What happened with Zillow Group this quarter?

Average monthly unique users of Zillow Group's mobile apps and websites rose 5% year over year to more than 175 million, including 35 million monthly unique rental users. In all, visits to Zillow Group's apps and websites -- Zillow, Trulia, StreetEasy, and -- jumped 15% to nearly 1.8 billion.

A person pointing towards a screen with a search box and pictures of three different homes

More people are turning to Zillow Group for their house-hunting needs. Image source: Getty Images.

Moreover, Zillow Group is getting better at monetizing this growing traffic: Premier Agent revenue per visit increased 6% to $0.121.

"Zillow Group had a great start to 2018 and we are already executing well on our strategic priorities for the year," CEO Spencer Rascoff said in a press release. "First quarter 2018 revenue growth was driven by strength in the Premier Agent, Rentals, and New Construction marketplaces."

Premier Agent revenue leapt 22% to $213.7 million, fueled by a 58% spike in the number of Premier Agent accounts spending more than $5,000 per month on Zillow's platform. Importantly, these agents appear to be receiving a strong return on their advertising spend, as evidenced by a 38% jump in total sales to Premier Agents who have been customers of Zillow for more than one year.

Rascoff highlighted the success of Zillow's Premier Agent business in the company's first-quarter prepared remarks:

Premier Agent revenue growth for the first quarter of 2018 accelerated sequentially over the fourth quarter of 2017. Bookings in the first four months of 2018 are up 28 percent year-over-year and new advertiser account adds for the first four months are the highest we've seen since 2015. The Premier Agent business is growing fast and is still dramatically under-penetrated relative to its overall potential.

Additionally, rentals revenue soared 35% to $29.1 million, and other revenue -- which includes Zillow Group's new construction marketplaces, dotloop, and display businesses, among others -- surged 33% to $38.1 million. Mortgages revenue, however, fell 6% to $19 million, due in part to higher interest rates, which negatively impacted refinance volume. 

All told, Zillow Group delivered a GAAP net loss of $18.6 million, or $0.10 per share, compared to a loss of $4.6 million, or $0.03 per share, in the first quarter of 2017. And adjusted EBITDA -- which excludes share-based compensation and acquisition-related costs -- was $46.3 million, or 15% of revenue, down from $54.8 million, or 22% of revenue, in the year-ago period.

Looking ahead

For the second quarter, Zillow expects total revenue of $322 million to $327 million and adjusted EBITDA of $49 million to $57 million.

Zillow also provided an updated full-year financial outlook, which includes:

  • Total revenue of $1.433 billion to $1.578 billion, signifying year-over-year growth of 40% at the midpoint, and including:
    • Premier Agent revenue of $917 million to $927 million,
    • rentals revenue of $144 million to $146 million,
    • mortgages revenue of $76 million to $77 million,
    • homes segment revenue of $125 million to $255 million, and
    • other revenue of $171 million to $173 million.
  • Adjusted EBITDA of $260 million to $285 million, up 15% at the midpoint.

Additionally, Zillow said that it expects to hold 300 to 1,000 homes in inventory as part of its new house-flipping business by the end of 2018.

"This year, we are taking our business beyond lead generation by creating better experiences for consumers and further strengthening our partnerships with real estate professionals," added Rascoff. "Our opportunity is expanding with the introduction of innovative products and services, like Zillow Instant Offers, that provide end-to-end solutions for consumers and will generate more home-related transactions across our platforms. It will be an exciting year as we begin the next phase of Zillow Group's growth."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
$33.85 (0.15%) $0.05
Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
$33.77 (0.31%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.