Zillow managed to narrow its losses and beat expectations on the back of last year’s rollercoaster housing market.
The company reported losing $72 million last quarter, its second quarterly loss of 2022 after surging mortgage rates slowed the housing market.
Zillow posted adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — of $73 million in the fourth quarter, down from $154 million in the same period of 2021. The company’s mortgage segment endured another rough quarter, with revenues falling 65 percent year-over-year.
“The unprecedented housing macro volatility continued, this time to the downside — the scenario we feared could happen,” Zillow co-founder and CEO Rich Barton said.
The company carried out its second major round of layoffs in the fourth quarter, ultimately reducing its workforce by about 2,000 employees.
Even with the loss, the company’s performance in the fourth quarter exceeded analysts’ expectations. Rentals — particularly multifamily properties — continue to be a source of growth for the company, with revenue rising 13 percent year-over-year.
When asked about the potential impact of CoStar Group acquiring Move, Inc. and its subsidiary, Realtor.com, Barton touted his company’s focus on the “mover consumer.”
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“We like our position,” Barton said. “No matter what comes to pass from a competitor perspective or from a regulatory perspective or even from [a] Department of Justice lawsuits perspective, our position and power and confidence is derived from the fact that we have this great relationship with this giant audience.”
Zillow ended the year by acquiring VRX Media, a national photography brand that the company integrated into its new program, Listing Media Services. The technology platform and real estate photography service — which offers agents high-quality media packages including listing photos, interactive floor plans and embedded virtual tours — launched last month in select markets.
The company also announced a new partnership with Opendoor that will allow homeowners to request a cash offer through Opendoor and also receive an estimate of their potential home sale price on the open market through Zillow. The program is operating in Atlanta and Raleigh.
With the launch of these programs, the company headed into 2023 on solid ground, Barton asserted.
“We’re feeling good about our position,” he said, “despite the fact that macro and housing markets are pretty foggy and pretty choppy right now.”