Zillow’s revenue doubled to a record $745.2 million during the third quarter, driven by its year-old iBuying program.
For the first time since the Seattle-based company launched an instant home-buying feature, revenue from its “Homes” segment eclipsed that of agent advertising.
During the third quarter, home buying generated $384.6 million in revenue, up 55 percent from the second quarter. (Zillow Offers yielded just $11 million during last year’s third quarter.)
But the company’s losses also widened to $64.6 million from $492,000 a year ago.
Zillow joined a crowded field of companies that buy homes for cash when it pivoted to iBuying last year. But it “wants to become the team to beat,” Barton said during an earnings call Thursday. Previously, he’s called a pivot to home buying as Zillow’s “moonshot.”
During the quarter, the company purchased 2,291 and sold 1,211 homes. It ended the quarter with 2,822 homes on its balance sheet. Zillow said its iBuying segment generated gross profit of $13.8 million — for an average of $11,400 per home.
Zillow Offers is currently offered in 21 markets and plans to launch in Los Angeles next month. “We’re getting close to a national footprint,” Barton said.
Company officials said they see Premier Agent — its marquee agent advertising feature — as a “distinct competitive advantage” as it builds up the home-buying business. “It’s the size and strength of Premier Agent that allow us to invest in and expand Zillow Offers so quickly,” Barton said.
Zillow said Premier Agent “re-accelerated” during the quarter, pulling in revenue of $240.7 million, up 3 percent year-over-year.
“The profitability of our Premier Agent business is foundational to Zillow’s success and is the reason we are able to expand Zillow Offers with such confidence and speed,” Barton said.
Barton recently set the record straight on how it makes money from iBuying. “We’re not flipping this property,” he said last month. “We’re looking to move it as quickly as possible and earn our money off the transaction fee.”