Seattle-based real estate tech company Zillow continues to face a difficult housing market but saw improvements in parts of its business last quarter.
The company, which released its latest financial results May 3, said it generated $469 million in revenue in the three-month period ending March 31, down 13% from $536 million during the first quarter last year.
Zillow said in a news release that "weakness in the overall housing market" was a big reason for the revenue decline, but co-founder and CEO Rich Barton said the results still outperformed the top end of Zillow's outlook.
“We’re capturing more customer demand and connecting more of that demand to our strengthening partner network, and these numerous incremental improvements have added up to make a real impact on our business," Barton said in the release. "Our powerful brand and strong balance sheet put us on solid footing.”
Zillow generated $361 million in residential revenue during the first quarter, down 14% year over year. Its rentals revenue, however, jumped from $61 million in the first quarter of 2022 to $74 million in the first quarter of 2023. Zillow posted a net loss of $22 million during the first quarter of 2023.
Zillow's share price rose nearly 5% in after-hours trading and is up over 26% for the year to date, based on Wednesday's closing price of $41.47.
Zillow launched in 2006 and offers a home and rentals search tool. The company also provides mortgages and a platform for partner agents called Premier Agent. In November 2021, Zillow said it was shuttering Zillow Offers, its home-flipping business. The move took several quarters and resulted in a 25% reduction in headcount. Zillow laid off an additional 300 employees in October 2022.
In December, Zillow acquired VRX Media, a Milwaukee-based real estate marketing company that provides agents with professional real estate photos, virtual tours, drone photos and drone videos. The companies didn't disclose the financial terms of the deal, but the deal was meant to strengthen ShowingTime+, which allows agents to schedule and manage listings.
Zillow had 5,852 employees at the end of March, according to a filing with the Securities and Exchange Commission.
Residential real estate companies have been hit hard by higher interest rates and decreased home-buying demand. Seattle-based Zillow competitor Redfin has conducted three rounds of layoffs since June. Seattle-based real estate tech startup Flyhomes, meanwhile, conducted two rounds of layoffs in 2022.
