Zillow had a headline-making first quarter, marked by the end of its lawsuit with Compass, the launch of Zillow Preview with a list of top-performing brokerage partners and the expansion of its artificial intelligence capabilities with AI mode.
Those moves are reflected in the Seattle-based residential portal’s Q1 earnings, with overall revenue growing 18 percent year over year to $708 million. On a segment-by-segment basis, mortgage grew the most during the first three months of the year, ballooning 56 percent year over year to $64 million as a lull in mortgage rates pushed the portal’s purchase loan origination volume up 96 percent to $1.5 billion.
Rentals revenue came in second, growing 42 percent annually to $183 million. For Sale (+12 percent) and Residential (+8 percent) both saw growth that outpaced the wider market (+2 percent), bringing those segments’ revenues to $514 million and $450 million, respectively.
Zillow maintained its profitability, with a net income of $46 million — an improvement from the same time last year when the company’s net income was $8 million.
The gamechanger? Zillow’s all-in approach to AI, with the company infusing the technology into every part of the transaction process, from AI mode helping homebuyers find listings with greater ease, to updates within FollowUp Boss, Zillow’s customer relationship management platform.
Jeremy Wacksman
“Zillow’s integrated platform is delivering meaningful value for buyers, sellers, renters and real estate professionals alike,” Zillow CEO Jeremy Wacksman said in a statement before Wednesday’s earnings call. “We’re embedding AI throughout the real estate experience in ways that make Zillow increasingly indispensable, and we’re innovating with speed and intention.”
“Zillow’s strong Q1 results reflect the consistency of our execution, the strength of our brand, our audience engagement, and the durability of our multi-year strategy,” he added.
The company’s shareholder letter included updates about AI mode, Zillow Preview and Zillow Pro, all of which have launched in recent months.
- AI mode, which allows homebuyers to find listings, ask affordability questions and explore other housing-related topics, is now live in 5 percent of Zillow markets. “Early signals are encouraging: Zillow users in AI mode are having deeper, more substantive conversations than they do in traditional search — and we are seeing more actionable engagement as a result,” the letter read.
- Pre-marketing solution Zillow Preview has grown from five to 60 brokerage partners since March. The portal also inked a deal with Realtor.com to display Zillow Preview listings on Realtor.com starting this summer.
- Zillow Pro is still in beta mode, with roughly 12,000 agents using the platform that bundles Follow Up Boss, My Agent and Agent Profiles into one, unified experience.
Jeremy Hofmann
In a pre-earnings interview, Chief Financial Officer Jeremy Hofmann said Zillow has been able to grow in an “effectively flat housing market” due to the company’s product development and audience engagement strategies, which have, especially this quarter, centered on AI and the value it offers to agents and consumers navigating an increasingly unpredictable market.
“The ethos of the company is to deliver a ton of value to consumers and deliver a ton of value to our real estate agent partners,” he said. “We launched preview, which is a huge win for real estate agents and brokerages. We extended that distribution with Realtor.com we started selling Zillow Pro into the market. We continue to add more and more features to make Follow-Up Boss even more interesting.”
“And our job is to make consumers as well-informed [as we can] so that they can move and for real estate agents that they are as efficient as possible and as technology forward as possible because that makes for a better consumer experience,” he added. “I think Q1 is just another acceleration of that, and the results show that.”
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