Real Estate

Zillow Revenue Ticks Up As Tension Mounts Over iBuyer Fallout

The popular portal raked in $1.7 billion during the third quarter of 2021, though it also lost $328 million — much of it from iBuying.

In a shocking earnings report that revealed the end of Zillow’s iBuying program Zillow Offers, the popular real estate portal also revealed that it brought in $1.7 billion during the third quarter of 2021.

The company’s revenue between July and September easily bested Zillow’s recent quarters. However, despite the positive revenue haul, Zillow reported a net loss of $328 million, reversing a trend from recent quarters that saw Zillow report a profit. Zillow’s most expensive business was its Homes segment, which includes iBuyer Zillow Offers and which lost $422 million in the third quarter of the year.

Analysts had expected Zillow to report $1.99 billion in revenue.

Going into Tuesday’s earnings, Zillow stock dropped from an opening price of just over $95 per share to between $85 and $86 per share as the markets were closing. After the company published its earnings Tuesday, shares initially dipped in after hours trading before recovering to around the day’s closing price.

Credit: Google

Zillow’s share price has fallen even further over the course of 2021. Back in February, Zillow shares hit an all-time high and were trading at more than $200. There have been ups and downs since then, but the price has generally followed a downward trend. This is in keeping with some other tech-focused real estate companies such as Compass that have also seen falling share prices, though other firms such as Realogy are up for the year.

In Zillow’s case, recent pivots have likely weighed on investors’ minds. Chief among them is the fact that last month Zillow paused purchases through its Zillow Offers iBuying program. Then this week, a new report indicated the company hopes to sell about 7,000 houses. The report indicated Zillow hopes to earn $2.8 billion from selling the homes, and would attempted to work with institutional buyers.

That report was published in the middle of Monday — about half a trading day before Tuesday’s drop in share price.

As of the end of the day Tuesday, Zillow had a market cap of about $21.3 billion.

Despite recent stock woes and the iBuying pause, Zillow has had a string of generally positive earnings reports in recent quarters. In August, for instance, Zillow revealed that between April and June of this year it earned $1.3 billion in revenue. That was better than preceding quarters, though the spring did see Zillow’s profits dip relative to prior reporting periods.

In May, Zillow reported earning $1.2 billion in revenue and $52 million in net income during the first three months of 2021. That made it Zillow’s most profitable quarter ever — even beating the immediately preceding quarter, at the end of 2020, which up until then had also been the company’s best.

Developing…

Email Jim Dalrymple II

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