Zillow Builds Momentum in Q2 Results as CEO Barton Passes the Baton to Wacksman

The leading U.S. real estate marketplace operator Zillow has revealed it grew revenues by 13% in the second quarter and claims that its business is outperforming the broader residential real estate market. Highlights of the company's report covering the three months ended 30th of June include:

• Total revenue of $572 million, up 13% year-on-year.
• Adjusted EBITDA of $134 million representing a 20% improvement.
• Net loss narrowed to $17 million in Q2 from $35 million in Q2 of 2023.

The other significant revelation to come from Zillow's report was that its co-founder Rich Barton has stepped down from his position as CEO to be replaced by Jeremy Wacksman who had previously been the company's Chief Operating Officer.

In his first comments as CEO, Wacksman sounded an upbeat note on revenue growth and nearing profitability.

“Zillow outperformed the residential real estate industry for the eighth consecutive quarter, delivering better-than-expected revenue across the business,”

“We’re executing well, continually shipping exceptional products and services in Zillow’s housing super app as we build the digital future of real estate. With an increasingly diversified and growing business, we are on our way to deliver strong GAAP profitability over time and meet our 2024 expectations to deliver double-digit revenue growth and modestly expand our Adjusted EBITDA margin. We are well positioned to capture more of our total addressable market and help more people get home.”

In a letter to shareholders, Zillow's management highlighted the performance of the Rentals and Mortgages segments. While Rentals racked up $117 in revenue representing a 29% year-on-year improvement, the Mortgages segment grew an impressive 42% generating $34 million.

In rentals, Zillow has joined forces with traditional rival Realtor.com in order to compete against CoStar-owned Apartments.com which claims market leadership. The partnership seems to be paying off, especially in the multifamily segment which saw revenue growth of 44% in Q2.

Zillow's Mortgages segment saw a 125% year-on-year increase in purchase loan origination volume to $756 million in Q2 and is reportedly achieving attach rates in the mid-teens in its so-called 'Enhanced Markets' where it tests new models.

Zillow's Residential segment—which houses its flagship Premier Agent product as well as ShowingTime+ and Follow Up Boss—still accounts for over 70% of company revenue. While the segment did not see the same dramatic growth as Rentals and Mortgages, it did grow 8% year-on-year with Zillow saying the business outperformed both the residential real estate industry's total transaction value and its own guidance.

Wacksman gets Zillow top job after 15 years as Barton steps aside

After fifteen years at the company, Jeremy Wacksman was announced as Zillow's new CEO in a release accompanying Zillow's quarterly results.

Wacksman joined Zillow from Microsoft and has held positions in the portal firm's product, marketing and operations departments. In an article posted on LinkedIn, former CEO Barton paid tribute to Wacksman and revealed that the company had been shaping his ascension for some time.

"We organized most of the company around Jeremy three years ago when we promoted him to chief operating officer (COO).  He has been supported by an exceptional team — amazing talent who have a clear strategy, high accountability, and high trust in one another.  Under Jeremy’s leadership, they have successfully positioned the company to go after, and execute well against, the multiple large, complex, interconnected opportunities ahead of us."

"His tenure as COO has been a time of particularly impressive innovation for Zillow.  Jeremy operationalized Zillow’s housing super app strategy while maintaining strong cost discipline, diversifying our revenue base and growing Rentals and Mortgages. He successfully championed the Follow Up Boss and ShowingTime acquisitions, helping us deliver on our goal to provide agent partners and the broader industry with the best software solutions to power their businesses.  He also organized, elevated, and recruited talent that makes up Zillow’s critical R&D, sales, and marketing operations."

"The Zillow business is in great shape financially, strategically, operationally, and organizationally, consistently outperforming the residential real estate industry.  We are executing well and methodically shipping great software and services in the Zillow housing super app that aim to digitize and integrate home buying, selling, financing, and renting, empowering consumers and partners alike."

"Jeremy is right and ready to be CEO of Zillow now, and I’m excited to support him as he leads us through our next chapter of building the digital future of real estate."

Wacksman has also been appointed to Zillow's Board of Directors with Barton staying on in an advisory capacity as co-executive chairman alongside fellow co-founder, Lloyd Frink.