Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's take a look
Speaker 1: at another mover to the upside, and that is Zillow
Speaker 1: up a couple of percentage points here in the after
Speaker 1: hours trade after the real estate marketplace reported earnings beat
Speaker 1: on several key metrics. Revenue six hundred and seventy six
Speaker 1: million dollars in the most recent quarter here EPs at
Speaker 1: forty four cents a share for the most recent quarter,
Speaker 1: and guidance for the fourth quarter. This says that expect
Speaker 1: revenue for the current quarter in a range of six
Speaker 1: forty five to six fifty five million dollars, a low
Speaker 1: end of that range just above the average of street estimates.
Speaker 1: Jeremy Waxman joins us right now, please to say, the
Speaker 1: CEO of Zilo Groups, talk a little bit more about
Speaker 1: the performance and your core business did well, Jeremy, and
Speaker 1: I am curious as to what drove that. Was there
Speaker 1: sort of macroeconomic factors behind that marketing.
Speaker 2: What Yeah, thanks for having me. Q three was a
Speaker 2: great one for Zillo. As you said, revenue up sixteen
Speaker 2: percent year every year and was really across the board.
Speaker 2: Our for sale revenue, which is mortgages and agent revenue
Speaker 2: up ten percent, and our rentals marketplace, our rentals revenue
Speaker 2: up forty one percent. And what's driving that outperformance against
Speaker 2: a housing market that's up mid single digits is this
Speaker 2: integrated transaction strategy building software for buyer, seleisi and renters
Speaker 2: to use Zillo more and connect with professionals and get
Speaker 2: more transactions done with our software and our partners. That's
Speaker 2: coming to life in more places. So that's what's driving
Speaker 2: the revenue growth and for sale, that's what's driving the
Speaker 2: revenue growth and rentals, and that's what's driving a great
Speaker 2: Q three for US.
Speaker 1: I am curious about the home loans business. I know
Speaker 1: a small part of your business, there was some decent
Speaker 1: growth there. What are your ambitions for that, Jeremy, Does
Speaker 1: that need to be bigger or are you comfortable with where
Speaker 1: it sits right now in your portfolio.
Speaker 2: We expect that to be a bigger business for US
Speaker 2: over time. Eighty percent of all buyers need a mortgage,
Speaker 2: and those buyers are shopping on Zilo. They're using Zilo
Speaker 2: to find their agent, to find the home with their dreams,
Speaker 2: and they want a one stop shop. They want the
Speaker 2: ability to transact all in one place in that Zilo app,
Speaker 2: so being able to offer them Zilo home loans as
Speaker 2: one of their choices of financing. It makes sense from
Speaker 2: a consumer experience standpoint, and then it's a great business
Speaker 2: because it's more efficient for them to use one platform
Speaker 2: and get multiple services. So you're right, it is very
Speaker 2: small today, it is growing nicely. It's growing double digits
Speaker 2: and has all year. We would love to see that
Speaker 2: business continue to grow over time. And as I said,
Speaker 2: the strategy there is really offer that service to our
Speaker 2: buyers inside a Zilo, offer it to our agents who
Speaker 2: are working with those customers, and just become one of
Speaker 2: their loan offerings for more of those transactions.
Speaker 3: Jeremy, I'd love to get a little bit more detail
Speaker 3: when it comes to the breakdown of buyers versus renters,
Speaker 3: because with mortgage rates still at the levels that they are,
Speaker 3: you know, one of the narratives out there is that
Speaker 3: actually take a look at the monthly payment and for
Speaker 3: a lot of folks it makes more sense to just
Speaker 3: rent versus to buy something. And I'm w when you
Speaker 3: take a look at the trends on Zillo, whether that's
Speaker 3: still the case or are we starting to see that shift.
Speaker 2: Yeah, Unfortunately, it is still a real affordability crisis in
Speaker 2: the housing market, and one way to think about that
Speaker 2: is just where are things versus pre pandemic. Home prices
Speaker 2: are up nearly one hundred percent from pre pandemic levels,
Speaker 2: So we talk a lot about mortgage rates and the
Speaker 2: rise in mortgage rates from those lows, but it's really
Speaker 2: home prices that are making things unaffordable rent affordability. Rent
Speaker 2: prices have only gone up about thirty forty percent, so
Speaker 2: it's still more challenging from pre pandemic, but it becomes
Speaker 2: more affordable to rent versus buy in many markets, and
Speaker 2: you're seeing many folks who are trying to be first
Speaker 2: time home buyers that's just out of reach and they
Speaker 2: are choosing to rent again. The good news for Zillo
Speaker 2: is by offering both of those marketplaces, we can help
Speaker 2: them with those needs.
Speaker 1: Right.
Speaker 2: You see our rentals business growing incredibly rapidly, right, and
Speaker 2: that's now more than a quarter of our revenue. Those
Speaker 2: renters are tomorrow's buyers. Yes, we're helping them find a
Speaker 2: place to rent, but we're also helping them get ready
Speaker 2: to buy. We are helping them report their rent to
Speaker 2: the Credit bureers to start building their credit score to
Speaker 2: get them ready for that home loan. We're helping them
Speaker 2: with tools where they can understand what they could afford
Speaker 2: when they go shop, because most of those folks, as
Speaker 2: you point out, they are what we call dual tracking.
Speaker 2: They are thinking about could I buy or should I
Speaker 2: re rent? And having all those options in one place
Speaker 2: is really what they need to make that decision.
Speaker 3: I hear what you're saying, and you know in some
Speaker 3: cases you're preaching to the choir as a renter who
Speaker 3: would like to buy. But I want to talk a
Speaker 3: little bit more about what the rentals market has meant
Speaker 3: for you because a lot of folks think of Zillow
Speaker 3: as a home buying app, a home buying website website,
Speaker 3: but the rentals market has been a big driver of
Speaker 3: your growth. I would love a little bit more detail
Speaker 3: on that and where you see that evolving as it
Speaker 3: comes to your business, the rental market versus the buying market.
Speaker 2: Absolutely, rentals is a fast growing business for us, and
Speaker 2: it's a really great experience for our consumers. You know,
Speaker 2: our mission is to more and more people get home.
Speaker 2: You can't do that if you're not helping renters get
Speaker 2: home because there's so many more renters than buyers and
Speaker 2: sellers every year. And what's great about our rentals business
Speaker 2: is it's really solving the fundamental problem renter has. There
Speaker 2: is no one database of all the rentals. You have
Speaker 2: to scour everywhere online and off to find a place
Speaker 2: on a very compressed timeframe. So we set out to
Speaker 2: try and organize as much of the inventory as possible,
Speaker 2: and we now have the most listings. We have two
Speaker 2: and a half million rental listings on Zilo. Everything from
Speaker 2: those big buildings to the single family homes that are
Speaker 2: for rent in your neighborhood. That is what brings renters
Speaker 2: to Zillo. You want to find a place, you want
Speaker 2: to go where there are the most places to look for.
Speaker 2: That's why we have the largest audience now. So Zilo
Speaker 2: Rentals has thirty six million unique visitors per month coming
Speaker 2: to Zilo. It's the largest audience. Those factors are now
Speaker 2: why the revenue is growing. Advertisers, big property managers who
Speaker 2: are looking to fill their vacancies. They want to tap
Speaker 2: into that audience and so they're what's driving the revenue
Speaker 2: growth up forty one percent in Q three. Multi family revenue.
Speaker 2: Those advertisers are driv as sixty two percent year ofver
Speaker 2: year revenue growth.
Speaker 3: All right, Jeremy really appreciate you taking the time after earnings.
Speaker 3: That is Jeremy Waxman. He is Zillo Group CEO.