A green building solution moves east
A green building solution moves east

Zillow Group shares surged after the company posted revenue that beat estimates, fueled by its core business selling leads to real estate agents.

The stock jumped as much as 11% to $60.82 in late trading on Wednesday, with investors looking beyond mounting losses in the company’s nascent home-flipping operation. The fast-growing business, known as Zillow Offers, bought 1,787 homes in the fourth quarter and sold 1,902, generating $603 million in revenue for the segment, according to a statement.

Zillow co-founder Rich Barton reclaimed the chief executive officer job last year to lead the company’s ambitious pivot into buying and selling homes. It’s an expensive operation: The company lost an average of about $6,400 on every home it sold in the quarter, after interest. Overall, the Seattle-based company posted a $101 million net loss for the quarter.

Its revenue was $944 million, a jump of 158% compared with a year earlier.

“It’s a dramatic expansion of our ambition as we move down to the transaction — from search and find to buy, rent and borrow,” Barton said in an interview. “All that while, during all that transition, we just printed a two-and-a-half times revenue increase year-over-year for the quarter.”

Zillow’s core business boosted the company. Premier Agent, as the marketing operation is called, generated $233 million in revenue for the quarter, up 6% from the year before.

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