1 00:00:02,520 --> 00:00:08,400 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's take a look 2 00:00:08,440 --> 00:00:10,680 Speaker 1: at another mover to the upside, and that is Zillow 3 00:00:10,720 --> 00:00:12,640 Speaker 1: up a couple of percentage points here in the after 4 00:00:12,680 --> 00:00:16,120 Speaker 1: hours trade after the real estate marketplace reported earnings beat 5 00:00:16,160 --> 00:00:19,560 Speaker 1: on several key metrics. Revenue six hundred and seventy six 6 00:00:19,600 --> 00:00:22,720 Speaker 1: million dollars in the most recent quarter here EPs at 7 00:00:22,760 --> 00:00:26,040 Speaker 1: forty four cents a share for the most recent quarter, 8 00:00:26,120 --> 00:00:28,680 Speaker 1: and guidance for the fourth quarter. This says that expect 9 00:00:28,680 --> 00:00:30,800 Speaker 1: revenue for the current quarter in a range of six 10 00:00:30,920 --> 00:00:33,839 Speaker 1: forty five to six fifty five million dollars, a low 11 00:00:33,920 --> 00:00:36,519 Speaker 1: end of that range just above the average of street estimates. 12 00:00:36,680 --> 00:00:39,199 Speaker 1: Jeremy Waxman joins us right now, please to say, the 13 00:00:39,240 --> 00:00:42,360 Speaker 1: CEO of Zilo Groups, talk a little bit more about 14 00:00:42,360 --> 00:00:46,080 Speaker 1: the performance and your core business did well, Jeremy, and 15 00:00:46,120 --> 00:00:48,159 Speaker 1: I am curious as to what drove that. Was there 16 00:00:48,680 --> 00:00:52,000 Speaker 1: sort of macroeconomic factors behind that marketing. 17 00:00:51,600 --> 00:00:55,600 Speaker 2: What Yeah, thanks for having me. Q three was a 18 00:00:55,640 --> 00:00:58,160 Speaker 2: great one for Zillo. As you said, revenue up sixteen 19 00:00:58,160 --> 00:01:01,360 Speaker 2: percent year every year and was really across the board. 20 00:01:01,720 --> 00:01:05,640 Speaker 2: Our for sale revenue, which is mortgages and agent revenue 21 00:01:06,160 --> 00:01:09,279 Speaker 2: up ten percent, and our rentals marketplace, our rentals revenue 22 00:01:09,360 --> 00:01:14,000 Speaker 2: up forty one percent. And what's driving that outperformance against 23 00:01:14,000 --> 00:01:17,600 Speaker 2: a housing market that's up mid single digits is this 24 00:01:17,760 --> 00:01:22,560 Speaker 2: integrated transaction strategy building software for buyer, seleisi and renters 25 00:01:22,560 --> 00:01:26,000 Speaker 2: to use Zillo more and connect with professionals and get 26 00:01:26,040 --> 00:01:28,800 Speaker 2: more transactions done with our software and our partners. That's 27 00:01:28,840 --> 00:01:31,720 Speaker 2: coming to life in more places. So that's what's driving 28 00:01:32,000 --> 00:01:34,280 Speaker 2: the revenue growth and for sale, that's what's driving the 29 00:01:34,280 --> 00:01:36,480 Speaker 2: revenue growth and rentals, and that's what's driving a great 30 00:01:36,520 --> 00:01:37,240 Speaker 2: Q three for US. 31 00:01:37,520 --> 00:01:39,399 Speaker 1: I am curious about the home loans business. I know 32 00:01:39,520 --> 00:01:41,559 Speaker 1: a small part of your business, there was some decent 33 00:01:41,600 --> 00:01:44,440 Speaker 1: growth there. What are your ambitions for that, Jeremy, Does 34 00:01:44,440 --> 00:01:46,759 Speaker 1: that need to be bigger or are you comfortable with where 35 00:01:46,800 --> 00:01:48,280 Speaker 1: it sits right now in your portfolio. 36 00:01:49,760 --> 00:01:51,760 Speaker 2: We expect that to be a bigger business for US 37 00:01:51,800 --> 00:01:55,200 Speaker 2: over time. Eighty percent of all buyers need a mortgage, 38 00:01:55,440 --> 00:01:58,400 Speaker 2: and those buyers are shopping on Zilo. They're using Zilo 39 00:01:58,520 --> 00:02:00,920 Speaker 2: to find their agent, to find the home with their dreams, 40 00:02:01,000 --> 00:02:03,120 Speaker 2: and they want a one stop shop. They want the 41 00:02:03,160 --> 00:02:06,840 Speaker 2: ability to transact all in one place in that Zilo app, 42 00:02:07,000 --> 00:02:09,519 Speaker 2: so being able to offer them Zilo home loans as 43 00:02:09,560 --> 00:02:12,440 Speaker 2: one of their choices of financing. It makes sense from 44 00:02:12,480 --> 00:02:15,560 Speaker 2: a consumer experience standpoint, and then it's a great business 45 00:02:15,560 --> 00:02:19,080 Speaker 2: because it's more efficient for them to use one platform 46 00:02:19,120 --> 00:02:21,720 Speaker 2: and get multiple services. So you're right, it is very 47 00:02:21,760 --> 00:02:25,359 Speaker 2: small today, it is growing nicely. It's growing double digits 48 00:02:25,400 --> 00:02:27,920 Speaker 2: and has all year. We would love to see that 49 00:02:27,960 --> 00:02:30,400 Speaker 2: business continue to grow over time. And as I said, 50 00:02:30,400 --> 00:02:33,480 Speaker 2: the strategy there is really offer that service to our 51 00:02:33,520 --> 00:02:36,360 Speaker 2: buyers inside a Zilo, offer it to our agents who 52 00:02:36,400 --> 00:02:39,240 Speaker 2: are working with those customers, and just become one of 53 00:02:39,280 --> 00:02:42,000 Speaker 2: their loan offerings for more of those transactions. 54 00:02:42,280 --> 00:02:44,720 Speaker 3: Jeremy, I'd love to get a little bit more detail 55 00:02:44,720 --> 00:02:47,760 Speaker 3: when it comes to the breakdown of buyers versus renters, 56 00:02:47,800 --> 00:02:50,760 Speaker 3: because with mortgage rates still at the levels that they are, 57 00:02:50,880 --> 00:02:52,839 Speaker 3: you know, one of the narratives out there is that 58 00:02:53,120 --> 00:02:55,120 Speaker 3: actually take a look at the monthly payment and for 59 00:02:55,200 --> 00:02:57,640 Speaker 3: a lot of folks it makes more sense to just 60 00:02:57,760 --> 00:03:01,200 Speaker 3: rent versus to buy something. And I'm w when you 61 00:03:01,240 --> 00:03:03,640 Speaker 3: take a look at the trends on Zillo, whether that's 62 00:03:03,680 --> 00:03:06,600 Speaker 3: still the case or are we starting to see that shift. 63 00:03:07,240 --> 00:03:10,560 Speaker 2: Yeah, Unfortunately, it is still a real affordability crisis in 64 00:03:10,600 --> 00:03:13,399 Speaker 2: the housing market, and one way to think about that 65 00:03:13,760 --> 00:03:16,920 Speaker 2: is just where are things versus pre pandemic. Home prices 66 00:03:16,960 --> 00:03:19,720 Speaker 2: are up nearly one hundred percent from pre pandemic levels, 67 00:03:19,919 --> 00:03:22,360 Speaker 2: So we talk a lot about mortgage rates and the 68 00:03:22,480 --> 00:03:24,720 Speaker 2: rise in mortgage rates from those lows, but it's really 69 00:03:24,800 --> 00:03:29,200 Speaker 2: home prices that are making things unaffordable rent affordability. Rent 70 00:03:29,240 --> 00:03:31,600 Speaker 2: prices have only gone up about thirty forty percent, so 71 00:03:31,639 --> 00:03:34,760 Speaker 2: it's still more challenging from pre pandemic, but it becomes 72 00:03:34,920 --> 00:03:38,360 Speaker 2: more affordable to rent versus buy in many markets, and 73 00:03:38,400 --> 00:03:41,200 Speaker 2: you're seeing many folks who are trying to be first 74 00:03:41,200 --> 00:03:43,880 Speaker 2: time home buyers that's just out of reach and they 75 00:03:43,880 --> 00:03:46,840 Speaker 2: are choosing to rent again. The good news for Zillo 76 00:03:47,040 --> 00:03:49,480 Speaker 2: is by offering both of those marketplaces, we can help 77 00:03:49,520 --> 00:03:50,400 Speaker 2: them with those needs. 78 00:03:50,440 --> 00:03:50,560 Speaker 1: Right. 79 00:03:50,640 --> 00:03:54,560 Speaker 2: You see our rentals business growing incredibly rapidly, right, and 80 00:03:54,720 --> 00:03:57,520 Speaker 2: that's now more than a quarter of our revenue. Those 81 00:03:57,680 --> 00:04:01,240 Speaker 2: renters are tomorrow's buyers. Yes, we're helping them find a 82 00:04:01,240 --> 00:04:03,680 Speaker 2: place to rent, but we're also helping them get ready 83 00:04:03,680 --> 00:04:06,560 Speaker 2: to buy. We are helping them report their rent to 84 00:04:06,600 --> 00:04:08,680 Speaker 2: the Credit bureers to start building their credit score to 85 00:04:08,720 --> 00:04:11,360 Speaker 2: get them ready for that home loan. We're helping them 86 00:04:11,400 --> 00:04:14,280 Speaker 2: with tools where they can understand what they could afford 87 00:04:14,320 --> 00:04:16,520 Speaker 2: when they go shop, because most of those folks, as 88 00:04:16,560 --> 00:04:18,800 Speaker 2: you point out, they are what we call dual tracking. 89 00:04:18,839 --> 00:04:21,440 Speaker 2: They are thinking about could I buy or should I 90 00:04:21,520 --> 00:04:24,200 Speaker 2: re rent? And having all those options in one place 91 00:04:24,279 --> 00:04:25,920 Speaker 2: is really what they need to make that decision. 92 00:04:26,360 --> 00:04:28,920 Speaker 3: I hear what you're saying, and you know in some 93 00:04:28,960 --> 00:04:30,880 Speaker 3: cases you're preaching to the choir as a renter who 94 00:04:30,880 --> 00:04:32,520 Speaker 3: would like to buy. But I want to talk a 95 00:04:32,560 --> 00:04:35,000 Speaker 3: little bit more about what the rentals market has meant 96 00:04:35,080 --> 00:04:37,120 Speaker 3: for you because a lot of folks think of Zillow 97 00:04:37,240 --> 00:04:41,080 Speaker 3: as a home buying app, a home buying website website, 98 00:04:41,080 --> 00:04:43,720 Speaker 3: but the rentals market has been a big driver of 99 00:04:43,760 --> 00:04:45,719 Speaker 3: your growth. I would love a little bit more detail 100 00:04:45,720 --> 00:04:48,560 Speaker 3: on that and where you see that evolving as it 101 00:04:48,600 --> 00:04:52,200 Speaker 3: comes to your business, the rental market versus the buying market. 102 00:04:53,279 --> 00:04:56,440 Speaker 2: Absolutely, rentals is a fast growing business for us, and 103 00:04:56,480 --> 00:04:59,280 Speaker 2: it's a really great experience for our consumers. You know, 104 00:04:59,320 --> 00:05:01,200 Speaker 2: our mission is to more and more people get home. 105 00:05:01,600 --> 00:05:03,400 Speaker 2: You can't do that if you're not helping renters get 106 00:05:03,400 --> 00:05:05,680 Speaker 2: home because there's so many more renters than buyers and 107 00:05:05,720 --> 00:05:09,880 Speaker 2: sellers every year. And what's great about our rentals business 108 00:05:10,400 --> 00:05:14,320 Speaker 2: is it's really solving the fundamental problem renter has. There 109 00:05:14,480 --> 00:05:17,120 Speaker 2: is no one database of all the rentals. You have 110 00:05:17,200 --> 00:05:20,680 Speaker 2: to scour everywhere online and off to find a place 111 00:05:20,800 --> 00:05:24,000 Speaker 2: on a very compressed timeframe. So we set out to 112 00:05:24,080 --> 00:05:26,719 Speaker 2: try and organize as much of the inventory as possible, 113 00:05:26,880 --> 00:05:28,920 Speaker 2: and we now have the most listings. We have two 114 00:05:28,920 --> 00:05:32,360 Speaker 2: and a half million rental listings on Zilo. Everything from 115 00:05:32,400 --> 00:05:35,240 Speaker 2: those big buildings to the single family homes that are 116 00:05:35,240 --> 00:05:38,440 Speaker 2: for rent in your neighborhood. That is what brings renters 117 00:05:38,440 --> 00:05:41,160 Speaker 2: to Zillo. You want to find a place, you want 118 00:05:41,200 --> 00:05:43,200 Speaker 2: to go where there are the most places to look for. 119 00:05:43,600 --> 00:05:46,000 Speaker 2: That's why we have the largest audience now. So Zilo 120 00:05:46,120 --> 00:05:50,280 Speaker 2: Rentals has thirty six million unique visitors per month coming 121 00:05:50,320 --> 00:05:54,159 Speaker 2: to Zilo. It's the largest audience. Those factors are now 122 00:05:54,240 --> 00:05:58,160 Speaker 2: why the revenue is growing. Advertisers, big property managers who 123 00:05:58,200 --> 00:06:00,960 Speaker 2: are looking to fill their vacancies. They want to tap 124 00:06:01,040 --> 00:06:03,640 Speaker 2: into that audience and so they're what's driving the revenue 125 00:06:03,640 --> 00:06:06,840 Speaker 2: growth up forty one percent in Q three. Multi family revenue. 126 00:06:06,839 --> 00:06:09,640 Speaker 2: Those advertisers are driv as sixty two percent year ofver 127 00:06:09,720 --> 00:06:10,520 Speaker 2: year revenue growth. 128 00:06:10,600 --> 00:06:13,680 Speaker 3: All right, Jeremy really appreciate you taking the time after earnings. 129 00:06:13,680 --> 00:06:16,359 Speaker 3: That is Jeremy Waxman. He is Zillo Group CEO.