Market Data
Zillow Group Delivers Strong Q4 Performance Amid Housing Market Challenges
Zillow Group wrapped up 2024 on a high note, reporting a 17% year-over-year increase in revenue for the fourth quarter, reaching $554 million. This figure surpassed analyst estimates, showcasing the company’s ability to thrive in a housing market marked by limited supply and elevated mortgage rates above 7%. The company also posted non-GAAP earnings per share of $0.29, slightly exceeding expectations. While Zillow’s shares remained flat in after-hours trading following the announcement, the overall performance underscored the company’s resilience and strategic momentum heading into 2025.
A Record Year for Zillow: Revenue Growth and Strategic Expansion
For the full year, Zillow achieved $2.2 billion in revenue, marking a 15% increase compared to the previous year. Despite a net loss of $112 million—down from $158 million in 2023—CEO Jeremy Wacksman described 2024 as a "remarkable year." Wacksman emphasized that the company met its key objectives, including double-digit revenue growth, and expressed confidence in maintaining this momentum in 2025. Zillow’s stock has also reflected this optimism, rising by more than 50% over the past 12 months. The company’s focus on scaling its rentals business has been a central driver of this growth, with Zillow announcing a significant new partnership with Redfin, another Seattle-based real estate giant.
Zillow’s Rentals Business: A Billion-Dollar Opportunity
Zillow’s push into the rentals market gained further traction with the announcement of an exclusive deal with Redfin. Under this agreement, Zillow will become the sole provider of multifamily rental listings on Redfin and its subsidiaries, Rent.com and ApartmentGuide.com. The partnership aims to expand the reach of multifamily property advertisers on Zillow while providing Redfin with new revenue streams through lead generation. This deal follows a similar syndication agreement Zillow struck with Realtor.com last year for multifamily rental listings. In a letter to shareholders, Wacksman highlighted the immense potential of Zillow’s rentals business, describing it as a "billion-dollar-plus revenue opportunity" and estimating the total addressable market at $25 billion.
Driving Growth in Rentals: Q4 Performance and Market Insights
The rentals unit played a pivotal role in Zillow’s Q4 success, with revenue surging 25% to $116 million. This growth was largely fueled by a 41% year-over-year increase in multifamily revenue. Zillow’s focus on rentals comes as the company adapts to changes in the housing market landscape, including the aftermath of last year’s National Association of Realtors (NAR) settlement. This settlement altered commission negotiation policies between homebuyers, sellers, and agents, prompting Zillow to explore new avenues for growth. In an investor presentation, the company noted that the rentals marketplace remains highly fragmented, with triple the number of "renter movers" compared to "for-sale movers." This dynamic presents a significant opportunity for Zillow to consolidate its position in the rentals space.
Zillow’s Strategic Vision: Leveraging Partnerships and Market Insights
Zillow’s residential real estate division, which primarily serves real estate agents, remains the largest contributor to its revenue. However, the company is increasingly betting on its rentals business to drive future growth. The partnership with Redfin exemplifies Zillow’s strategic approach to expanding its reach and solidifying its position in the competitive real estate landscape. By aligning with other industry leaders, Zillow aims to capitalize on the fragmented rentals market while diversifying its revenue streams. Wacksman’s leadership has been instrumental in steering the company toward this vision, with a clear focus on innovation and scalability.
Leadership Transitions and Looking Ahead
Zillow’s leadership team has undergone recent changes, with Jeremy Wacksman taking over as CEO in August 2024, succeeding co-founder Rich Barton. Wacksman’s tenure has been marked by a renewed emphasis on strategic growth initiatives, particularly in the rentals sector. Meanwhile, former Zillow CEO Spencer Rascoff made headlines last week with his appointment as CEO of Match Group, signaling a new chapter in his career. As Zillow continues to navigate the evolving real estate market, the company’s ability to execute on its vision under Wacksman’s leadership will be critical in determining its long-term success. With a strong foundation in place and a clear roadmap for growth, Zillow is well-positioned to build on its recent achievements in 2025 and beyond.
