The Zillow Group (Zillow, Trulia, Street Easy and Real Estate.com) has had a lot going on in both Q4 2018 and so far into Q1 2019 including its own version of personnel musical chairs.
Stuart Rascoff, Rich Barton and Lloyd Fink, all original 2005 co-founders of this now more than 4,000 employee real estate juggernaut, are changing seats. Here’s the new personnel look:
- Barton is returning to the CEO chair from the chief executive seat.
- Rascoff, the overseer of the company’s IPO when the company went public and the acquisitions of some 15 businesses, is out as CEO and continuing on the board.
- Fink is moving into the chief executive chair vacated by Barton while remaining on the board.
- Zillow veteran Amy Bohutinsky resigned as COO and has joined the Zillow Group board.
- Allen Parker, a newly hired CFO, will be responsible for the company’s new acquisition, Mortgage Lenders of America.
According to Barton, “In the past year, the Zillow Group (with its reported 157M unique monthly users) has become a very different company…we’re giving today’s ‘uberized,’ on-demand consumers a full spectrum of options to buy, sell, borrow and rent on their terms.”
Zillow’s earnings report for 2018 showed a net loss of $97.7M in Q4 with a total loss of $120M for the entire year. Revenue in Q4 2018 rose +29% to $365.3M and its full year revenue gains rose +24% to a record $1.33B.
Its revenue projections for Q1 2019 are between $417M-$434M. No full year projections for 2019 were made available as were no expected profit/loss forecasts for Q1 2019 or the full year. General projections over the coming 5 years pointed to $20B with Zillow Offers overtaking the Premier Agent program as the primary revenue generator for the company.
Zillow’s Premier Agent program generated revenue of $221M in Q4 2018, up from $1995M in Q4 2017, a +11% increase. Its full year revenue generated $898M, up from $761.6M in 2017, a +18% increase. Barton indicated the Premier Agent program is shifting from a lead generation model to a live, on-demand connection with consumers in order “…to improve their experience and ultimately help our Premier Agents close more deals.”
“Enhancing” the Premier Agent program is the newly announced “Best of Zillow” Program. Designed to improve customer service based upon consumer feedback of Premier Agents, underperforming agents will be weeded out of the program.
Zillow’s home segment, Zillow Offers, generated revenue of $41.3M in Q4 2018 and $52.4M for the entire year. Barton announced that this home segment program now has in excess of $1B in borrowing capacity. Leadership within the company expects Zillow Offers to purchase 5,000 homes/month and to generate an annualized revenue of $20B with $100M- $115M of that amount to be generated in Q1 2019.
New expectations from the Zillow Group for 2019 include:
- In addition to operations in Phoenix, Las Vegas, Atlanta, Denver and Charlotte. Zillow Offers is expanding into Dallas, Raleigh, Houston and Riverside CA in 2019.
- Mortgage Lenders of America, acquired in 11/2018, is expected to originate 3,000 loans/month from 33% of Z-owned buyers
- Internet, Media and Tech segments including Premier Agent plus rentals, mortgages, new construction, display ads and dot-loop transaction management platform to generate $2B in annual revenue, double its revenue currently.
For more information on Zillow happenings, go to the following…
