JiroThe company’s second-quarter 2024 investor earnings call on Wednesday evening marked a pivotal moment for the company: It was its first conference call since co-founder Rich Barton announced he would be stepping down as CEO.
Within an hour of the call, Jiro Group The company announced that it has promoted COO Jeremy Waxman to CEO. Barton will remain on Zillow’s board of directors and has been named co-chairman of the board along with Zillow co-founder and current chairman Lloyd Frink.
“I have served as CEO or chairman since the day Lloyd and I provided seed funding for the company in 2004, and I will remain involved,” Barton told investors and analysts listening in on the conference call, “but my role will transition from day-to-day operational leadership to supporting and advising Jeremy Waxman and the management team.”
Waxman’s promotion was naturally a hot topic on the conference call, but executives reassured the audience that the change would not mean any major shifts in Zillow’s business plan or strategy.
Zillow largely structured the company around Waxman three years ago when he was promoted to COO, Barton said.
“He is supported by a great team and has positioned the company to successfully address several significant opportunities,” Barton said.
These opportunities include the continued rollout of Zillow’s “Housing Super App” and integrated experiences for consumers and agent partners across the country. Waxman will also be tasked with expanding the “breadth of the company’s market coverage” and “depth of transaction penetration in those markets” while also growing the rental and mortgage business.
Zillow’s executives believe that by focusing on these opportunities, which form part of Zillow’s core competencies, Five pillars of growthThe company continues to outperform the broader industry.
For the second quarter, Zillow reported sales increased 13% year over year to $572 million, beating the midpoint of its guidance range by $39 million. Home revenue increased 8% year over year to $409 million, but the majority of the overall home growth was driven by rental revenue up 29% year over year to $117 million and home sales up 42% year over year. Zillow Mortgage Revenue increased to $34 million.
Zillow’s mortgage division’s improved performance was driven by a 125% year-over-year increase in purchase loan originations, reaching $756 million in the second quarter of 2024.
“This success was achieved despite a continuing challenging mortgage rate environment, as evidenced by an estimated single-digit decline in industry-wide purchase loan issuance in the second quarter compared to the same period last year,” Waxman said.
Despite the revenue increase, Zillow reported a GAAP net loss of $17 million for the quarter, an improvement over the $35 million net loss reported in Q2’23.
Despite the loss, Waxman said Zillow’s success to date gives him confidence that the company is on track to meet its goal of double-digit revenue growth in 2024 and is headed toward “strong GAAP profitability over the long term.”
Burton echoed that sentiment, noting during the conference call that Zillow is on “solid footing.”
“I’m very excited,” Burton said. “There are a lot of bright spots in front of the company, a lot of opportunity. Maybe at some point the winds will shift and be behind us. Of course, that’s not necessary, but I’m sure it will happen at some point.”
To achieve its goals, Zillow executives said the company will continue to focus on five pillars of growth: viewings, financing, seller solutions, expanding its agent-partner network and service integration.
Zillow’s first four Enhanced MarketThe company said the app, which combines integrated services and fully encompasses Zillow’s “Housing Super App” vision, has increased revenue per transaction by more than 80% since the beginning of 2023.
“As we scale, we’ve seen repeated signs of success,” Waxman said. “We’ve seen increased revenue per gross transaction value in the 13 markets we launched in at the end of the first quarter, and we see opportunities to further increase conversions and revenue per gross transaction value as we launch the remaining expanded markets over the course of the year.”
Looking ahead, executives said Zillow will continue to focus on the technology it offers both real estate agents and consumers, and work to unify and streamline the home-buying experience.
“We believe the digital revolution floats all boats,” Barton said. “A more digital industry that uses our software is better for consumers and partners, and ultimately, better for Zillow Group.”
“We believe it is important to invest more in innovation to improve the customer experience, which has helped us build a strong brand position and attract and retain a large, engaged moving customer base,” Waxman added.
