ANALYZING ZILLOW'S Q2 REPORT: REVENUE GROWTH, LOSSES, AND MORE!

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Zillow's second-quarter earnings report showed mixed results, with revenue up slightly but net losses jumping.

The company pulled in $506 million in revenue between April and June, up from $504 million during the same time last year. However, Zillow also lost $35 million in the quarter, a reversal from the $8 million in profit it made during Q2 of 2022.

CEO Rich Barton said in the report that Zillow outperformed the broader industry for the fourth consecutive quarter, but that the housing market remains "frustratingly foggy." He expects home sales to gradually rise, eventually reaching around 6 million a year. Barton also said that Zillow is "quite excited by our relative performance" despite the current market conditions.

Well that's kind of interesting. Where else can you bring in over $500M in sales and still manage to lose $38M, and be excited about it?! If I ran my business like that, I'd be out of business, right?

Zillow's second quarter 2023 results were also weak compared to Q1. The company beat the first quarter's revenue haul of $469 million but underperformed compared to the $22 million it lost between January and March.
 

Key takeaways from the report:

What does this mean for consumers?
The report suggests that the housing market remains volatile, but that on the buying side, there is a lot less competition for homes. Zillow is still the strongest player in the industry, and is looking to dominate the landscape even more with what it is hoping will become the defacto RE industry superapp.

What does this mean for investors?
The one bright spot in the report was Zillow's rental division - up 28% year over year. Due to property shortages and rent increases, investors looking for income properties should be active and serious in this market - there are excellent opportunities out there.