Shares of Zillow Group Inc. (NASDAQ: Z) soared by nearly 26% on November 7, 2024, driven by the company's impressive third-quarter financial results that exceeded analysts' expectations across key business segments.
For the quarter ended September 30, 2024, Zillow reported a 17% year-over-year increase in total revenue to $581 million, surpassing the consensus estimate of $555 million. The company's residential segment, which includes home-buying and selling services, saw revenue rise by 12% to $405 million, fueled by improved conversion rates as more buyers and sellers transacted with Zillow's agent partners.
Notably, Zillow's mortgages segment experienced a remarkable 63% year-over-year revenue surge to $39 million, driven by an 80% increase in purchase loan origination volume. The company attributed this strong performance to its strategy of providing customers with an integrated financing experience through its Zillow Home Loans platform.
Zillow's rentals segment also contributed to the company's growth, with revenue increasing by 24% year-over-year to $123 million. This growth was primarily driven by a 38% surge in multifamily revenue, bolstered by an increase in the number of multifamily properties listed on Zillow's platforms.
During the earnings call, Zillow's management highlighted several growth drivers, including the rapidly expanding Zillow Showcase offering, which allows agents to elevate their brand presence on Zillow and provide an immersive virtual tour experience for home buyers. Showcase listings now account for nearly 1.5% of new for-sale listings nationwide, and Zillow aims to increase this share to 5% to 10% over the medium term.
