Zillow’s first-quarter revenue rose 18% annually to $708 million as world leaders ramped up efforts on artificial intelligence.
Zillow’s first quarter made headlines, marked by the conclusion 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 were reflected in the Seattle-based housing portal’s first-quarter earnings, where overall revenue rose 18% year-over-year to $708 million. By segment, home loans grew the most in the first three months of the year, rising 56% year over year to $64 million as the portal’s purchase loan originations rose 96% to $1.5 billion as mortgage rates settled.
Rental revenue ranked second, increasing 42% annually to $183 million. Sales (+12%) and residential (+8%) both grew faster than the overall market (+2%), with revenues for these segments coming in at $514 million and $450 million, respectively.
Zillow remained profitable with net income of $46 million. This is an improvement from the same period last year, when net income was $8 million.
Game changer? Zillow’s all-in approach to AI. The company is injecting technology into every part of the transaction process, from an AI mode that makes it easier for homebuyers to find properties to updates within FollowUp Boss, Zillow’s customer relationship management platform.
Jeremy Waxman
“Zillow’s unified platform delivers meaningful value to buyers, sellers, renters and real estate professionals alike,” Zillow CEO Jeremy Waxman said in a statement before Wednesday’s earnings release. “We are innovating with speed and purpose, embedding AI across the real estate experience in ways that make Zillow increasingly essential.”
“Zillow’s strong first quarter results reflect the consistency of our execution, the strength of our brand, our engagement with our audience, and the sustainability of our multi-year strategy,” he added.
The company’s shareholder letter included updates on AI Mode, Zillow Preview, and Zillow Pro, which were launched in recent months.
AI mode, which helps home buyers find properties, ask questions about pricing, and explore other home-related topics, is currently deployed in 5% of Zillow markets. “Early signs are encouraging: Zillow users in AI mode are having deeper and more substantive conversations than in traditional search, resulting in more actionable engagement,” the letter reads. Premarketing solution Zillow Preview has grown from five to 60 brokerage partners since March. The portal also signed an agreement with Realtor.com to display Zillow Preview listings on Realtor.com starting this summer. Zillow Pro is still in beta mode, with about 12,000 agents using the platform, which bundles Follow Up Boss, My Agents, and Agent Profiles into one unified experience.
jeremy hoffman
In a pre-earnings interview, Chief Financial Officer Jeremy Hoffman said Zillow was able to grow in a “virtually flat housing market” thanks to the company’s product development and audience engagement strategies, particularly this quarter, which focused on AI and the value it provides to agents and consumers navigating an increasingly unpredictable market.
“Our philosophy is to deliver a ton of value to our consumers and a ton of value to our real estate agent partners,” he said. “We started previewing it and it’s a big win for real estate agents and brokers. We expanded its distribution on Realtor.com and started selling it to the Zillow Pro marketplace. We continue to add more and more features to make Follow Up Boss even more interesting.”
“And our job is to keep consumers well-informed.” [as we can] “They’re going to be mobile, and for real estate agents, being as efficient as possible and advancing technology as much as possible is going to improve the consumer experience. I think the first quarter is going to accelerate that even more, and the results show that,” he added.
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