Zillow Group, Inc. ZG reported relatively mixed fourth-quarter 2024 results, wherein adjusted earnings missed the Zacks Consensus Estimate while revenues beat the same.  

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The company has a solid brand position in the residential real estate industry, boasting 204 million average monthly unique users across the Zillow ecosystem of apps and sites. Zillow’s advanced technology, such as its New Construction marketplace Real Time Touring and software solutions from ShowingTime+, is gaining huge popularity. Strategic acquisitions are tailwinds.

Net Income

In the reported quarter, net loss on a GAAP basis was $52 million or a loss of 22 cents per share compared with a net loss of $73 million or a loss of 32 cents per share in the prior-year quarter.  
 
On a non-GAAP basis, net income improved to $68 million or 27 cents per share from $50 million or 20 cents per share in the year-ago quarter. However, the bottom line missed the Zacks Consensus Estimate by 2 cents.

For 2024, Zillow witnessed a GAAP net loss of $112 million or a loss of 48 cents per share compared with a net loss of $158 million or a loss of 68 cents per share in 2023. On a non-GAAP basis, the company reported a net income of $349 million or $1.38 per share, up from $319 million or $1.26 per share in 2023.

Revenues

Quarterly revenues improved to $554 million from $474 million in the year-ago quarter. Healthy growth in the residential and rental segment boosted the top line. The top line beat the Zacks Consensus Estimate of $541 million.

Residential revenues increased 11% from $349 million in the prior-year quarter to $387 million in the fourth quarter of 2024, backed by solid growth in Premier Agent Business. Growth in the New Construction business, healthy demand for ShowingTime+ software solutions and contributions from Follow Up Boss also supported net sales in this vertical.

Rental Revenues rose 25% to $116 million from $93 million in the previous-year quarter. The expansion was driven primarily by 41% year-over-year growth of multifamily revenue. 

The Mortgages segment generated $41 million in revenues compared with $22 million in the year-earlier quarter. The integration of Zillow Home Loans with their Premier Agent partners and increasing volume of purchase mortgage orientation led to revenue growth in this segment.

For 2024, Zillow reported revenues of $2.24 billion, up 15% from the prior-year quarter’s revenues of $1.95 billion. 

Other Details

During the quarter, Zillow recorded a gross profit of $420 million compared with $359 million in the prior-year quarter, owing to healthy revenue growth in all the segments. The operating expenses during the quarter were $489 million, up from $464 million in the prior-year quarter. 

Adjusted EBITDA was $112 million compared with $69 million a year ago. The combination of higher-than-expected Residential Rentals revenues and effective cost management delivered better-than-expected EBITDA results in the quarter.

Cash Flow & Liquidity

In 2024, Zillow generated $428 million in cash from operating activities compared with $354 million in 2023. As of Dec. 31, 2024, the company had $1.08 billion in cash and cash equivalents compared with $1.49 billion a year ago.

Outlook

For the first quarter of 2025, Zillow expects total revenues in the range of $575-$590 million, implying 10% growth year over year. Total adjusted EBITDA is expected to be in the range of $125 million-$140 million. Management expects Mortgages revenues to grow approximately 30% year over year.

The company expects low to mid-teens revenue growth for 2025, with continued adjusted EBITDA margin expansion. GAAP net income is also forecasted to be positive.

ZG’s Zacks Rank

Zillow currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Keysight Technologies, Inc. KEYS is scheduled to release first-quarter fiscal 2025 earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.69 per share, indicating growth of 3.68% from the year-ago figure. 
 
Workday, Inc. WDAY is scheduled to release fourth-quarter fiscal 2025 earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.75 per share, indicating growth of 11.5% from the year-ago figure. 

Light and Wonder LNW is scheduled to release fourth-quarter earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, indicating growth of 47.95% from the year-ago figure. 

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