Zillow Group reported results for the second quarter of 2022 that, despite including an earnings decrease from the previous year, outstripped average Wall Street estimates.
The Seattle-based company posted a net income of $8 million or earnings per share of $0.47 for the second quarter, up three cents per share from last year and surpassing the average analyst estimate by 12 cents per share. EBITDA, or earnings before interest, taxes, depreciation, and amortization, was $164 million in the quarter, outpacing estimates of $152 million.
The company logged one billion dollars in sales in the second quarter, but revenue was down 23% from the second quarter of 2021.
Also down was premier agent revenue, which decreased 5% year-over-year to $333 million, as well as rental revenue, which dropped 3% year-over-year to $71 million.
On a recent earnings call, co-founder and CEO Rich Barton declared the company is “on firm ground” and “well-positioned for long-term growth” before joining a chorus of other industry leaders in attributing less than stellar financial results to the broader economic environment.
“[ The ] rapidly changing affordability picture has impacted home shoppers’ ability to find an affordable and an acceptable option, driving buyer sentiment to a 20-year low,” Barton said. “Reduced buyer demand has cooled the previously red-hot sellers’ market.”
After establishing this inauspicious backdrop, Barton delved into several of the company’s important recent developments.
Chiefly, he trumpeted an exclusive, multi-year partnership with Opendoor, which will provide Zillow customers the opportunity to receive a cash offer on their home. He listed several strategic benefits associated with the partnership, including the ability to service sellers across more than 50 markets and the ability to connect premier agents with interested sellers that are looking to sell their home in the traditional way. Last year Zillow scrapped its own iBuyer business and has continued to “wind down” their related inventory in the second quarter.
Barton also lauded Zillow’s mobile apps and websites for their contribution in driving growth. Visits across all platforms during the second quarter were 2.9 billion, marking a 5% year-over-year increase.
Looking forward, Barton predicted continued lower purchase demand will result in year-over-year revenue decline of 12% for the third quarter of 2022.
The Fortune 500 company’s share price was up 0.43%, as of Tuesday morning (press time), since releasing their earnings report on Thursday.
Brendan Rascius is RISMedia’s associate editor. Email him your story ideas to email@example.com.