Zillow’s losses ballooned to $163.3 million during the first quarter despite record revenue from its now-halted iBuying business.
That’s a 142 percent uptick in losses from $67.5 million a year ago. Overall, the Seattle-based listings giant said revenue during the quarter rose 148 percent year over year to $1.1 billion.
The company’s iBuying division generated a record $770 million in revenue before Zillow suspended home purchases in late March. Until that point, Zillow had purchased 1,479 homes during the first three months of the year. Overall, it sold 2,394 properties, ending the quarter with 1,791 homes.
Zillow ended the quarter with $2.6 billion of cash and investments, the highest balance in company history. Premier Agent ad revenue rose 11 percent.
In a letter to shareholders, CEO Rich Barton said the company is “actively planning” to resume Zillow Offers, “likely within the next few weeks,” depending on health and safety concerns and local housing market demand.
During an earnings call Thursday, he said buyer demand is returning across the country. “We have passed peak fear,” he said. “Lights that were red two months ago are moving through yellow and beginning to flash green.”
“We are now seeing buyer demand return in markets across the country,” he said. Zillow, along with many of its competitors, suspended its home-purchasing program in March because of public health concerns and stay-at-home orders in many states. The company continued to sell homes, though; as of March 19, it owned 1,860 homes.
As the coronavirus pandemic began shutting down many parts of the U.S. economy in March, Zillow canceled its revenue guidance and slashed expenses by 25 percent. It froze hiring, suspended marketing and cut discretionary spending.
Though the listings giant expects to take a hit on revenue from discounts it offered on Premier Agent, Zillow projected second-quarter revenue would be flat at between $577 million to $620 million.
Barton predicted a “great reshuffling” in the way people buy and sell homes. The forced adoption of tools like virtual touring and digital paperwork were long overdue, he said.
The pandemic could also be a catalyst for people to change their homes. “Right now I’m in my bedroom because I have three kids on Zoom school all over the house and I don’t have an office,” he said. “My dad had an office when I was growing up. I never saw the need. Well, I see the need now.”